Home offices are certainly nothing new. I have had one on and off for most of my career. But with the boom in business formation, more and more new entrepreneurs are following this age old bootstrapper?s tradition of starting their business out of their home. According to the Wall Street Journal's on-line StartupJournal.com, "The number of full-time home-based businesses has risen 3.1% during the past five years to 9.9 million in 2004."
It can be the only way that many new businesses can save enough on the costs of start-up to make it during those dicey early months of operation. It takes many forms: the garage, the kitchen table, the basement, the bedroom, the dining room table, or some combination of these.
Even from the beginning it can create some real boundary issues. At this very moment I am violating one of the rules of our household. I have tried to agree to keep my working at home to my home office over the years. It forces me to set up some boundaries between work and home, even though some days they are the same place. But with the wonder of wireless, I sit here in my living room with the Golf Channel on in the background writing about the challenges of working at home.
As a business grows, it can very quickly take over one's home. I met yesterday with a couple of music industry entrepreneurs who just graduated from Belmont. While they have found that running their start-up out of their homes has saved money at a time when they had very little, it is getting very old very quickly. Josh, who does audio production for a new venture called Submerge Media, told me that his part of the business has now taken over two rooms in his home. Others talk about how uncomfortable it can be as they hire employees and they have to "report to work" around their dining room table. Privacy is certainly a casualty of this type of business arrangement, especially for the entrepreneur's family.
Eventually many of these businesses will "leave home". But, the transition can be difficult. The entrepreneur goes from no rent, to having to pay a fairly large chunk of money each month even for a small amount of office space. The commute time increases from the few seconds it takes to walk up stairs, to however long it takes to get to affordable and convenient space for the business. Certainly the up-side is that the garage is no longer full of inventory, the basement full of machinery, or the kitchen full of computers.
There are stepping stones for many businesses. Incubators are always on option, especially for high potential ventures. More and more entrepreneurs find transitionary space with businesses set up to offer just that, such as HQ Business Centers or countless local office cooperatives. Other entrepreneurs take advantage of excess space that other businesses have through sub-leasing some of their space. As we expanded our health care business we often had to take more space than we needed at the moment and used sub-leasing as a temporary solution for our unused offices. Entrepreneurs coming out of university settings are finding that many schools, like we do here at Belmont, have created business hatcheries for aspiring entrepreneurs.
Although some businesses stay home-based businesses for years and years, many out grow their welcome. As Josh said about their growing pains at Submerge Media, "It gets a little weird meeting with clients in my bedroom!"
