 International Data Corporation (IDC), a market research firm based in Framingham, Mass., predicts that the number of households with some form of home-office activity is now approaching 37 million and will come close to 39 million in just two years.
The fact is, more and more people are choosing to work from home, due to downsizing, entrepreneurial pursuits, or the desire to stay home with children. Also, more employers are recognizing the need for flexible work schedules and are allowing more employees to work from home several days a week -- further perpetuating the need for a home office.
The Internet and other technologies are also making it easier to have an office virtually anywhere. Now, working on a beach in Hawaii is the same, technologically speaking anyway, as working from an office in Austin. With advances in connectivity, wireless Internet and palm-size computers, just about any place can be an office. The use of technology in the home isn't much different. In fact, IDC expects that, by 2003, more than 90% of home-office households with computers will have Internet access, and they will spend more than $6.6 billion to get connected.
Sounds great, doesn't it? But if you're interested in setting up a home office, consider these tips to ensure the space works for you -- and your family.
Your work, your life
It's important to ensure home life and work life are kept separate, though overlap will invariably occur. To help in this pursuit, designate a specific place for your office -- preferably a separate room with only office-related furnishings. Not only will these surroundings put you right into "work mode" when you open the door, the folks at the IRS require it if you plan to take a home-office deduction on your tax return.
Most people working out of their homes find it helpful to have the work area somewhat isolated from the personal areas of the home. Whether you will find this true for you will depend on what type of product or service your business provides, how you work best, and why you're working from home in the first place.
Beware of cabin fever
Adapting to working from home can be challenging for those who enjoy the camaraderie generally found in a traditional office. Home-office workers tend to be more isolated and that's not always a good thing. Stay involved in professional organizations, get out for lunch with former co-workers, and generally stay above the radar. You'll feel more connected and won't drive yourself crazy talking to the cat. |
Designing your home office
When you design your home office, you should consider your work style and the equipment you'll need. Do you like to spread out while you work, papers askew, or do you prefer a dedicated area of a desk? Your style will determine the furniture you invest in, as well as helping you determine what will make you most productive. Fortunately, as the number of home-office workers increases, furniture manufacturers have introduced a wide array of furniture to meet various work styles. For example, if you have a bad back, you might consider a stand-up desk with a barstool. In terms of equipment, will you need a headset for spending time on the phone, a copy machine, a place to store inventory, or lots of file space? Will an employer pay for the office setup, or will you? Also consider where electrical outlets and phone jacks are positioned. Will you have a dial-up Internet connection, cable modem, DSL, or ISDN line? Knowing the answers to these questions before you start will help you plan an office that works for you and keeps you productive.
Tax deductions and the home office
Contrary to popular belief, the Internal Revenue Service is your friend. And the IRS will be even more of a friend if you follow its easy guidelines regarding home offices. Not only is a percentage of your mortgage deductible based on the square footage of your home office, but most utilities are deductible as well. The exception is phone bills -- except for long-distance calls made for business and special services such as a second phone or fax line.
There are many other guidelines to keep in mind, but luckily the IRS has a well-designed Web site that's easy to navigate, unlike most of the tax forms. Log on at www.irs.gov and request one of the free publications about home-office deductions. There is all kinds of information that will put you steps ahead by the time April 15 rolls around again, and may even save you some money.
Follow these tips, consider your business needs and space available, and soon you'll be on your way to home-office success.
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