The pros and cons of working from home

For small businesses, there can be advantages to working from a home office: with the explosion in digital communications, the relative affordability of computers and other technology, and the increased availability of Wi-Fi networks, working from a home office is a very real option for many sole traders and small business operators.

A home office can be an opportunity to structure your business in a way that best suits you, but it’s not without drawbacks. Consider both sides of the equation before you make the move.

The advantages


Working from home provides the opportunity to be flexible. In fact, McCrindle Research found 45% of people said flexibility was the thing they most enjoyed about working from home.

If you prefer to burn the midnight oil, or work at 5am, no one will bat an eyelid. And for those with young children, working from home means you can coordinate your work schedule around school activities. But with flexibility comes the need for discipline, which is why working from home is well suited to people who are organised and self-motivated.

Cost savings

If you’re operating as a sole trader or a small partnership, it can be expensive to run an office, particularly if you meet most of your clients at their home or office. Working from home enables you to save money on rental costs and office utilities, while taking advantage of tax benefits for your home office. Your business can then grow in a sustainable way, until you’re ready to take on the overheads of a larger office space. Get advice from your accountant about home office claims. Also ask about potential savings on travel, food and work clothing.

Improved productivity

A Stanford University study found working from home increased productivity by 13% (PDF). People produced more work due to the quieter and more convenient environment. Many of those surveyed also cited fewer distractions, less coffee breaks and improved morale for the increase in output.

The disadvantages

Managing work/life balance

While the promise of freedom is high, people may assume you’re available at all times, and it can be challenging to set boundaries. 15% of those surveyed by McCrindle found it difficult to maintain a work/life balance. Others said they were easily distracted or often interrupted, or constantly tempted to do household tasks.

If you’re able to create an environment where you physically separate your work and home activities, it may be easier to achieve success.

Limited social interaction

If you thrive on being in the company of others, working from home may be challenging. More than half of those in the McCrindle survey said they crave social interaction and face-to face contact, something that’s often taken for granted when in an office environment.

The biggest negative for 22% of respondents was professional and social isolation. A home office simply isn’t designed for brainstorming sessions and professional networking.

Unexpected costs

Being home more often may come with additional costs. Electricity bills are likely to be higher, and you may discover that purchasing technology and office supplies adds up.

Another often hidden cost is your health and safety. If your home office hasn’t been ergonomically set up, you may find working from home is literally a pain in the neck.

The decision to work from home is both a professional and lifestyle choice. It can be a successful venture if you go into it understanding the pros and cons, and confident in your levels of drive and discipline. For more information about managing your business from home, contact us.