Do You Need a Home Office or Separate Office for your Small Business?

How to Set up an Office

Your office environment can make a big impact on the success of your business. Conventional wisdom says that you need to rent a traditional office space when starting out. But recently, starting a business from home has become more of a possibility.

How to Set Up an Office: Home or Away?

For solopreneurs or those who are able to work remotely, setting up a home office can be an affordable alternative. And there are plenty of tech tools that you can use to stay in contact with your team, clients and customers. But having a separate office outside your home also has its merits.

Each entrepreneur and each business is different. So you need to carefully consider your specific needs and the pros and cons of each option before making the leap. Here’s what you should know about choosing between a home office and a separate office space.

Pros of a Home Office

Home offices are affordable and convenient, which can be especially beneficial for new businesses and solopreneurs. You can avoid paying rent, covering utilities and stocking your office with furniture, equipment and supplies. In fact, you might be able to get by with just a laptop and an internet connection, which many people already have. This can allow you to save up to make your business more financially viable in the future, at which point you can reserve a dedicated office space. Or you could simply choose to run a lean business without a lot of expenses long-term.

Additionally, working from home allows you to avoid long commutes and lets you easily get back to work at any time of day. Whenever you’re at home, you have the ability to access your office to write down a new idea or take a quick conference call.

However, even if you have a team, you have the option of working remotely from home and reaping those benefits. There are tons of communication and collaboration platforms available today that can help you communicate with team members and clients from your home office. You can use Slack to stay in touch with everyone, Skype to voice or video chat with people and Trello to manage specific projects.

Cons of a Home Office

However, home offices aren’t practical for every type of business. They don’t give you a convenient place to take in-person meetings or deal with customers. And some types of businesses require equipment or warehouse space that you simply cannot fit in most homes.

Even if you’re a solopreneur or a business owner who could theoretically manage things remotely, home office work might not be for you. Having your work so easily accessible can make it difficult to balance work and home life. You might face too many distractions and see your work suffer. Or you might find yourself working constantly and see your home life suffer. Additionally, it’s not the best solution for extroverts who like interacting with people on a daily basis, though you might be able to combat this by going to a coffee shop or coworking space a few days per week.

Pros of a Separate Office

Some businesses, particularly customer facing businesses like retail stores or repair shops, absolutely must have a dedicated space. Not only do you need the space for practical reasons, but having a separate office also appears more professional to customers or clients and gives your business some extra credibility.

However, even some businesses that don’t get regular visits from customers can benefit from a separate office. If you have a team or are thinking of hiring, having a space where you can all work together can be beneficial for collaboration. It may also help you keep employees on track and hold people accountable for their work.

For solopreneurs, a separate office might be right for you if you have productivity issues when working from home. You’ll likely deal with fewer distractions in a separate location. And it can also help you keep a regular work schedule, rather than constantly overlapping your work and home life.

Cons of a Separate Office

The main downside of renting a dedicated office space is the cost. Not only do you need to rent the space, but you also need to pay for utilities, furniture and equipment. If you have a team, all those costs get even higher.

More established businesses can usually afford this expense. And many find that the benefits are well worth the cost. However, newer businesses might find it to be out of reach, or might simply prefer to save the money early on until renting a dedicated space becomes absolutely necessary.



Annie Pilon Annie Pilon is a Senior Staff Writer for Small Business Trends, covering entrepreneur profiles, interviews, feature stories, community news and in-depth, expert-based guides. When she’s not writing she can be found exploring all that her home state of Michigan has to offer.

5 Reactions
  1. Good points on both sides. If you need space to host in-person client meetings, look for office buildings that allow you to rent conference rooms. If it costs your $25 to rent a conference room and you need it a couple times/week then you only need to spend $200 on that.

  2. Each of the sides have their own benefits and drawbacks but i personally think this decision totally belongs on owner’s thought process towards the business and also the community and locality and location… article is quite helpful ..please keep sharing.. 🙂

  3. It depends on how you work. You will need separate spaces if you find that it interferes with your relaxation.

  4. It depends on how you work. You will need separate spaces if you find that it interferes with your relaxation.

  5. I agree with what you said that having a separate office is beneficial for companies that have a team that needs to work together. Having an office space would help you keep track of your employees and hold them accountable for their work. My dad plans to start his own firm soon, so I’ll suggest he rents an office space than have a home office. Thank you.