Small is the new big

I've been working out of my home office since 1983, but had no idea I had so much company: The Rise of the 'Homepreneur' (Business Week) says that there are over six and a half million "homepreneurs" and that we are responsible for 10% of private sector employment.

Wow. When I tell people I work from a home office, the reaction is often a bit negative. "How long have you been doing that?", they'll ask, with a strong implication that I must just be "between" jobs. As I've said in other places, you could work for yourself for 50 years, but if you took a job at the Mall just before you died, your obituary will probably mention that: most people don't think of self employment, and especially self employment from a home office, as "real" employment.

When I first started this business, I did rent an office. It didn't take me long to realize that was a silly and unneeded expense. Yes, I had a few clients that had visited me there, but the bulk of my business was at clients offices or done remotely (dial up modems in those days). Many a day my office sat dark and unused - but the rent was still due at the end of the month. I was a "tenant at will", no lease, so after enlisting my father's help to build a workspace desk in my cellar, I moved "home" and stopped paying rent for space I wasn't using.

I actually wasn't paying rent. I had made a Faustian deal with the building owner: free consulting services in exchange for rent. His over-use of those privileges and his annoying business advice were also large factors in my moving to my home.

Admittedly there are times that a home office is inconvenient. Every now and then I get a client who needs or wants to visit. As my office isn't separated from my home, that means making everything presentable for guests - even if someone is supposedly just dropping something off, the beds must be made, there must be fresh towels in the guest bathroom and neither the dishwasher nor the laundry can be running when they arrive.

We also have to get dressed. We would have made the beds anyway, and as the guest bathroom isn't used al that much, the towels might pass, but ordinarily we might not dress until it's time to go get the mail. I'm also accustomed to showering and shaving when I feel like it: 7:00 AM, sure, but there's nothing wrong with 11:00 either. And shaving? Well, maybe, maybe not...

The link above points out that working at home makes financial sense:

Indeed, the most obvious financial benefit for home-based entrepreneurs is lower operating costs. A 2006 SBA study compared tax returns of sole proprietors who deducted home-office expenses with those who deducted commercial rent. That analysis found that home businesses, on average, had lower sales and net profits than companies in commercial spaces. But profitable home-based ventures retained a greater share of their total receipts as net income: 36%, vs. 21% for non-home-based businesses.

That's a fifteen percent difference - a good chunk of extra cash in your pocket. Remember, it's not just rent that you save. There are commuting costs, incidentals like coffee and furniture and often you are duplicating things you may already own at home. When I closed up my office, I ended up with having two of many things I really only needed one of. I could have avoided a fair amount of expense if I had never had that office.

I've often said that although our Congress critters fawn over the big companies who fill their campaign chests, small companies are much more important to our overall economy. I did not realize that the smallest of the small - people very much like me - are such a big part of that.