When you decide to launch a home-based business, you sometimes find the business concept quickly outgrows the home. You’re then faced with the decision of renting office space or a storefront, or of relocating to a bigger home. There are many advantages to moving up to a larger residence, including the tax benefits of home office deductions. Before making any changes, practicing due diligence is key, and you’ll need to do a bit of research in advance of making a decision to figure out what’s right for your family, and your business. Here, Home Jane Realty shares some helpful tips to guide you toward making the best choice for your situation.
What Do You Need?
It can be hard to anticipate how quickly a home-based venture will grow, so if you haven’t already written a business, marketing, and operating plan, it’s time to get started. This will help you anticipate growth and expenditures. It’s also wise to start a limited liability company. This will protect you against some forms of liability, make it easier to file your taxes, and give you greater flexibility.
You can do the legwork yourself, hire a pricey attorney, or better yet, use an online formation company to do the work on your behalf. The laws around LLC formation vary from one state to another, so learn about yours in advance. Be sure to also familiarize yourself with preparing an operating agreement, which, according to ZenBusiness, California legally requires of any LLC.
Part of formalizing your business also includes obtaining necessary permits and licenses, as well as establishing your business name. Now is also the time to craft an effective logo, which you can actually tackle yourself with a free online logo maker tool. The one offered by Adobe Spark, for example, provides all the necessary design features to create a customized logo that matches your aesthetic — for free.
Search The Market
According to Bob Villa, in addition to considering your family’s needs – access to good schools, amenities, and a safe environment – you’re also wise to think about business needs when looking at new homes. How much space do you need to dedicate to the business? Will a large bedroom do the trick, or do you need convertible in-law quarters or a detached casita? If you see customers or clients on-site, would an exterior private entrance to your office space be helpful? How about homeowner associations? Some prohibit use of the home for business, or limit parking. You’ll need to check community rules and regulations in advance, but when you work with a real estate expert they can walk you through a lot of the red tape.
Start by getting a feel for the overall state of the housing market. Then, do an online search of properties in desirable neighborhoods to get an idea of what houses of varying size cost, as well as help you determine what your current home is valued at. Crunch some numbers with your real estate agent to help. You need to know what you qualify for before you start shopping. Keep in mind, according to the U.S. Internal Revenue Service, you may qualify for sizable deductions for a home office, so in the long run, buying a larger house is often more cost-effective than remaining in a smaller, less expensive house and renting outside office space. A mortgage lender can help you sort out the finances so you can make an informed decision.
Selling and Buying
If you need to sell your home before buying a new one, you’ll need to consider the logistics of how you’ll operate your business during the process. Moving can be stressful and disorganized, so having a plan in place is important. If it’s a slow market, consider selling your existing home first, storing your belongings, moving into a short-term rental, and then looking for the perfect new home to buy. This approach ensures you, and your business, aren’t left in limbo if the timing of selling and buying doesn’t align.
Making The Move
Keeping your business operational during the move is critical. Make a portable office that consists of key files, laptop, chargers and any other essential items you need to avoid a disruption in your work. Research local movers, and hire top-rated movers to handle the heavy lifting for you so that you can handle any business-related matters that come up while you’re moving and getting settled in your new place. You might also rent temporary space or even work in a library or coffee shop for a short period during the move. Once you find a new home, establishing your office should be a priority to ensure limited downtime. If it’s possible to work ahead on projects and orders to buy some flexibility during the move, all the better.
Launching a business and moving residences are both big life events, and when they happen simultaneously, it can feel a bit chaotic and stressful. Plan as much as you can in advance, take a deep breath, utilize professionals in the arena, and recognize the disruption will be short-term.