A record number of new companies were registered during the pandemic, with the number of UK startups growing by 22% compared to pre-COVID figures. Digital technologies, virtual office services, and the rise of remote working mean it’s now easier than ever before to run your own business from the comfort of your home.
So if you’re thinking of running a business from home, here’s everything you need to know to get started.
What are the main advantages of running a business from home?
Running a home-based business can prove to be a cost-efficient solution for a range of business types, offering a host of attractive perks that allow you to:
- Save on the costs of renting and running an office
- Save time and money on travel and commutes
- Adopt a more flexible lifestyle
- Juggle work and domestic commitments more easily
- Be in complete control of your work environment
Are there any drawbacks to running a business from home?
Of course, running a business from home can also present some disadvantages too. These may include:
- Feeling more isolated. Depending on your business setup, you may find there are fewer social interactions and opportunities to meet with new contacts
- It may prove more difficult to separate work and home life
- There might be more distractions around you
- Your mortgage, insurance, and tax could be affected
- Your energy costs are likely to increase
But for the most part, a home-based business is a lucrative move for many and well-suited to most business models and sectors, provided you are aware of the logistics involved.
Who do I need permission from?
To run a business from your home, you may need to gain certain permissions depending on the nature of your business and your type of residence.
Can I run a business from a rented property?
If you’re in rented accommodation, you’ll need to notify your landlord and get written permission before you can start a business from home. Once you have this, you’ll need to review and update your tenancy agreement to reflect any changes.
Your landlord can’t unreasonably reject or delay granting permission for you to run a business from your rental. However, consent may be denied if your business is deemed to be commercial rather than residential, or if it could cause disturbances to the local neighbourhood.
If your company is online, it may be a good idea to register for a business address service to keep your home address private and give you a permanently fixed location, whilst enhancing your corporate image. We’ll explore this in more detail later.
Can I run a business from a property I own?
Residential mortgages don’t typically allow you to use your home to run a business, so you will need to contact your lender to get permission first.
Breaching the terms of your mortgage can have serious implications, so reviewing your agreement before starting a home-based business is a really important step.
Consider whether or not your business will disturb neighbours around you and look into any restrictive covenants for potential stipulations that may be relevant to your business plans.
Do I need planning permission?
You may need to approach your local planning authority, for example, if:
- You plan on making significant alterations to your house
- Your business will result in increased traffic or a noticeable amount of people visiting your home
- Your business involves activities that are unusual to the residential area
- Your business could cause disturbances to neighbours at unsociable hours, or result in other forms of nuisance such as noise or smells
Will I need to inform my local council?
If your business is likely to attract customers to your house, receive a high volume of deliveries, or if you want to advertise outside your home, you’ll need to contact your local council for permission first.
Depending on your specialism or business sector, you may also need to apply for a license through your council.
Some examples of businesses that require a license include:
- Loans and financial services
- Health & beauty
- Alcohol sales
- Dog breeding
Use GOV.UK’s License Finder tool to find out if your company requires a special license.
Will I have to pay more council tax?
Council tax is not paid on business properties; however, if you are planning on using a significant portion of your home to run your business, then you may be subject to business rates in addition to your council tax. See below for more on this.
Will I have to pay business rates?
Most home-based businesses will be exempt from business rates provided you only use a small part of your property to run your company, such as your bedroom as an office or selling goods via post.
However, if your home is part business, part domestic, or customers visit your property as part of your service, then you might be expected to pay business rates. Contact the Valuation Office Agency to find out if you should be paying business rates. Or for those in Scotland, get in touch with your local assessor.
What insurance do I need?
Depending on your business setup, it’s likely that your home or contents insurance won’t cover every aspect of your business at home – for example, if you’re storing a large amount of stock or have customers visiting your property.
It’s a good idea to take a look at the most common types of business insurance to check if you need cover.
For example, if you have members of the public entering your home, you’ll need public liability insurance. Or if you have employees working on your premises, you’ll be required to have employers’ liability insurance.
Can I run a business from my garage or shed?
Converting your garage or outdoor shed for business is a popular way to gain extra space outside of your home and away from distractions. It’s perfectly legal to run a business from your garage or shed; however, if you’re planning on making major renovations or expanding, then you will be required to get planning permission and may have to apply for a license from your local council, as mentioned above.
Can I run a business from my kitchen?
The pandemic saw food businesses from home soar. With the catering industry accounting for more than £1billion of the UK market, creating a food business from your kitchen could be a highly remunerative move.
When setting up a food business from home, logistics can be a little more complex than compared to other home-based businesses.
You’ll need to register with your local authority at least 28 days prior to trading and ensure careful compliance with health & safety guidelines and food hygiene standards.
Although not essential, it’s highly recommended to pursue a formal food hygiene qualification to support the highest level of food health and safety knowledge. The Chartered Institute of Environmental Health offers guidance on the different types of accredited food hygiene certificates available.
As well as maintaining a high standard of food safety, you’ll also need to ensure that your kitchen is fully compliant with the required regulations.
Some other key factors to be aware of when setting up a business in your kitchen include:
From the tops of your ceilings to your worktop surfaces and floors, you’ll need to be able to easily clean and disinfect all areas of your kitchen, to avoid any risk of contamination.
Additionally, all equipment will need to be in good working order and there must be adequate space on your worktops.
Separate storage and refrigeration
All food produce you prepare for your business needs to be stored and refrigerated separately from your personal supplies. This is the same when it comes to utensils. You’ll need to have dedicated work utensils for business use and keep personal ones stored separately.
In line with cleanliness and hygiene standards, it’s important to avoid any waste build-up in food preparation areas and keep rubbish in a clean bin.
Children and pets
Keeping family and work separate can be a tricky part of running a business from your kitchen, but is vital in order to comply with good food hygiene. You’ll need to limit and restrict access for family and pets during food preparation and ensure that eating areas are kept well away from food production areas.
Plants and decorations
Plants and decorative items will also need to be kept out of the way during any food production, to avoid cross-contamination and to ensure ease of cleaning at all times.
More guidelines and useful information can be found on GOV.UK.
What else should I consider when running a business from home?
The environment you work in plays a huge role in your productivity.
The home can be full of day-to-day distractions, whether it’s children, pets or household chores, so it’s a wise idea to set up a designated workspace that’s comfortable and fully equipped for your daily business needs.
Keeping this space separate from the rest of your home will better define the boundaries of work-life balance and encourage your optimal focus.
The right tools
Besides having your own designated workspace, you’ll also need to ensure your home is fully equipped with the tools and equipment necessary to facilitate the smooth running of your day-to-day operations.
At a basic level, this will include comfortable office furniture, an IT setup fit enough to meet the demands of your business, a reliable internet connection, and if you’re selling goods, the necessary space to store stock.
Having all the best tools at your disposal will not only increase your productivity, but will also enable you to liaise and communicate more effectively with customers, clients, and colleagues.
Protecting the privacy of your home with an address service
When running a business from home, most business owners prefer to keep their residential address off the public register and company stationery. Instead, they opt to use a company address service.
Using an address service carries a number of important benefits:
- It protects you from unsolicited mail and unwanted visitors
- It makes you less vulnerable to company fraud and ID theft
- It boosts your credibility as an established business
In the UK, there are a number of business structures available to the prospective business owner. As a company formation agent, we specialise in the incorporation of limited companies.
We offer a range of address services that allow you to use our prestigious Covent Garden address in London as your registered office, service address, and business address. This shields your home from the public domain and enhancing your corporate image to customers and contacts by having your business associated with a world-renowned location.
If your business is already up and running as an Ltd, explore the links below to find out more about the address services best suited to you:
- Our Registered Office Address Service
- Our Service Address (also suitable for the shareholder address)
- Our Business Address Service
Or take a look at our Privacy Package, a company formation package specifically designed to provide confidentiality, ideal if you’re not yet up and running.
Boosting your corporate image with a call answering service
As mentioned above, using an address service is one way to prevent your home business from looking ‘amateur’ or small and improve your legitimacy as an established company.
But there are even more ways to achieve this and take your corporate image to the next level.
A business telephone service like our Call Answering Service is a highly effective and affordable way of having your business calls answered promptly and professionally, leaving you to focus on the core activities involved with running your business, knowing that your callers are always in safe hands.
This is an especially beneficial option for solo tradespeople or small teams working from home, as it saves you the expense and time involved with hiring and training a full-time receptionist. It also has the power to make your business look bigger and more professional.
How does it work?
You’ll be assigned two dedicated receptionists to handle your calls during normal working hours (8:30am – 5:30pm, Monday – Friday). Your receptionists will answer each of your calls in your company name, as if based within your business, and follow tailored instructions provided by you, ensuring every opportunity is captured.
Your receptionist can either transfer and announce a call to you, or take a message on your behalf and forward it to you via email or SMS within ten minutes of receiving the call.
There’s no setup fee, and the service also includes your own business telephone number.
Business telephone number
We’ll provide you with your own unique 020 London or regional telephone number as part of our call answering service, or as a service on its own.
You can use this number as your new business number on your company stationery, website, and advertising. We will forward all calls to your mobile or landline handset for you to answer.
No matter what your business plan or vision is, there’s never been a better time to begin your venture from home. If you’d like more advice or need assistance with forming your new company, contact our team today or leave a question below in our comments section and we’ll come back to you.