Why Working From Home Might Not Work for Startups

I admit to being generally pretty bullish about the advantages of working from home.

And if you had asked me until today whether I knew any reason why an entrepreneur with a business startup and working from home couldn’t succeed, I’d have said, in principle, no. Of course it would depend on a lot of circumstances, the nature of the business, equipment needs, staffing needs and so on. But in principle, no.

After all, Google started off in a garage. As did Hewlett-Packard.

So maybe, working from home-with-garage would qualify?

As I say, I would have thought so, but that was before I read entrepreneur Ben Barren’s post from yesterday BRW Fast Starters Issue: “Knowing what you now know, would you start a business

again?”

Among various statistics which he quotes from the Business Review Weekly special Fast Starters issue he is commenting on, this one jumped out for me in terms of working from home (note – these are for Australian companies):

– 89% of businesses lease offices ONLY 2% are

located AT HOME.

As Ben comments:

(yup… very scary findings for the home business, thats

a hard stat to beat) Thats why im restructuring my geo-logistics.

Although I haven’t yet seen the BRW article, I’m assuming the article does not provide statistics on whether in the pre-startup phase a lot of businesses haven’t been developed from a home office.

Or even from a garage.

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About Des Walsh

I show business owners and other professionals how to navigate the social media maze and use LinkedIn effectively. I'm an author, speaker, business coach, social media strategist and LinkedIn specialist. Connect with me on LinkedIn, Google Plus and Twitter. And to stay in the loop, get my weekly Social Business Bites.

Comments

  1. Anonymous says:

    Catherine

    Depends on the type of business. Kathie who has commented here can tell you of creative ways people use virtual assistant services to get a lot done without hiring extra inhouse staff. Global Surf Industries http://www.surfindustries.com/ operates internationally and has no “office” – everyone works from home, using a virtual private network to communicate and using Skype instead of the regular phone system. But if you hate working from home have you checked out possibilities for using some kind of serviced office setup until you are ready to establish your own premises?

  2. Anonymous says:

    Just responding to Catherine’s comment. I guess it depends on the type of business Catherine. I have a dedicated office at home and do have a ‘staff’ of over 230 people but they all work from their home offices too, around the world. I’ve been able to outsource which is a great way to operate, but I do recognise that not all businesses can operate the same way.

  3. Anonymous says:

    I had no idea that google started out in a garage. That makes me feel a bit better. I’ve been running my new business from home for several months now, and I’m hating it, but I needed to save on overheads. The problem is, unless you have a really big house, I don’t see how you can survive running from home for long. You wouldn’t really want your office staff working at your dining table would you?

  4. Anonymous says:

    Let’s say “not that kind of revenue -yet” 🙂

    I don’t think they would see us home based people as a significant part of the BRW market, Kathie. But it would be interesting to know if they actually have those stats. I’m not a subscriber, just buy occasional issues.

  5. Anonymous says:

    Well, that will let out a lot of homebased businesses because a lot that I know do not have that kind of revenue. So their survey was rather restrictive, wasn’t it? Thanks for checking Des.

  6. Anonymous says:

    Kathie

    I bought the issue today. On p 39, About the Survey

    Companies met the following criteria:

    * Must have commenced trading after June 30, 2002

    * Must have reported at least two fiscal years of revenue

    * Must have revenue of mort than $500,000 in 2005-06

    * Revenue for 2005-06 must have been higher than in 2004-05

    * Must have more than one customer

    (the bulk of revenue cannot have come from government grants or other start-up funding)

    * Must be Australian – not a subsidiary of a multinational

    * If not a public company, provided an entry form signed by an external auditor or accountant

  7. Anonymous says:

    I’m assuming they mean “of those surveyed”. Probably need to buy the BRW edition in question. I intend to do that next week, so if I get an insight into that I’ll share it, especially as the majority of people who read this blog are not in Australia.

  8. Anonymous says:

    It would be interesting to find out how they got their stats? No-one asked me. And do they know I run a home based business or are they working on the basis of my registered PO Box address? Just wondering….