The essentials for setting up your home office

Many small businesses don’t require commercial premises to set up shop. Almost one million small businesses operate out of residential premises. But setting up a home office is more than just sitting on your couch with your laptop.

Here are some tips to help you get your home office set up correctly to maximise your productivity and ensure your office is compliant with the government regulations in your state.

Could you small business work from home?

What type of small business are you running? Are you a freelancing creative, operating as a sole trader? Perhaps you’re running a boutique tax agency instead. If your business doesn’t require a commercial property, such as a small grocery store, you can look at setting up shop at home.

Setting up a home-based small business is a simple way for new small businesses to save money. You won’t be paying a lease on top of your normal rent or mortgage repayments, which is one of the largest costs for many small businesses.

Does your business require you to meet face-to-face with clients? This is the main reason you might need to get a commercial property. But you can still work from home. Just ensure to set up your home office in a space you’re comfortable showing clients.

How to set up your home office

To maximise your productivity, you to need to set up an office space, away from other people and other distractions. There are many ways you can look at converting some space into a nice looking office area at home. Here are some tips to transform your home into a professional office space.

1. Identify the office space.
Where exactly are you going to set up shop – lounge, garage, spare room?
For example, you might choose to refurbish your garage and turn it into an office space, so you don’t need to walk your clients through the rest of your home.
2. Make a list of the must-haves to run your business.
Do you need a laptop, work phone, Wi-Fi, an art space, camera?
3. Fill the space with the necessities.
We aren’t just talking about items like a laptop and phone. What about an ergonomic chair? A desk? A shelf to hold your books? Make a list of the necessities.
4. Separate the professional from the personal.
Now that we are getting things underway, you want to make sure your personal life doesn’t spill into your professional one. Look at setting up a separate business banking account for any in-goings or out-goings. Once you have your banking under control, make sure your work space follows the same structure.
Keeping your work space fresh and only work-related will allow you to concentrate on the tasks at hand and stop you from getting distracted. Move any televisions or children’s toys to keep you from distractions. Can you arrange your desk in a way that completely separates yourself from the rest of the house? If you have clients or visitors, where will they sit? And will the rest of the house be visible to them?
5. Organise your processes and procedures for your home office.
Having a plan and procedures in place will help make your time more effective with the important things. Have a book or notepad for all your logins and passwords. Set up a system for paying things like invoices. How will you manage your client information? There are many free online systems and tools available to help small businesses.
6. Establish office hours.
It sounds simple, but establishing a daily routine will help keep yourself accountable. Write up a schedule for your day, what time will you start and finish? What time will you take lunch?

Other questions you may want to ask yourself:

• What will you be doing in the space?
• What type of work needs to be done?
• Will clients be visiting me?
• Will there need to be space for collaborative work?
• What type of materials may need to be stored or used?
• Will I be making conference calls?
• Will I be making video calls?

Once you’ve set everything up, it’s time to work out how a home office will impact your finances.

How home offices impact your taxes

Setting up a home office can also impact your taxes. You might be able to claim a number of deductions if they relate directly to your business. These can alter depending on your business structure and home office, but may include:

• Occupancy expenses – a portion of your mortgage interest, rent, council rates, land taxes or house insurance premiums
• Utilities – Heating, cooling and lighting
• Office supplies – paper, pens, ink, staples and anything else required to do your business
• Office equipment – computers, printers, servers or copiers
• Internet and phone expenses
• Travel expenses
• Auto expenses
• Advertising and marketing costs
• Education, technical or professional qualification costs
• Insurance premiums
• Website costs
• Tax accountant fees
• Subscription costs
• Parking fees

To make it easier at tax time, keep a record of when you use different devices for work and for personal use and a record for how much time you spend in your home office for work related purposes.

Insurance for your home office

Don’t forget to look into how having a home office will impact your insurance requirements. Different types of business have different insurance requirements. You might need to get:

•    Public liability insurance.
•    Asset protection.
•    Professional indemnity insurance.

Your business-related insurance premiums are tax deductible.

Getting your home office sorted is just one of many things new small business owners need to do. Find out what’s next with the InfoChoice small business checklist.

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