Pros and cons of starting a home-based business

PaySpace Magazine Global decided to discover whether starting a home-based business is really such a good idea

home business pros cons

Pros and cons of starting a home-based business. Source:

We’ve all got used to the work-from-home model throughout the last year. Yet, working 9 to 5 got no more exciting even if the settings changed. Would anyone risk starting a business in these uncertain times amidst the umpteenth wave of the pandemic? Plenty of people have and continue to do so.

Those who lost their work in early 2020 had time to take their hobbies to a more professional level. Besides, free courses helped to learn and acquire some new skills. Hence, many of those left outside in the wake of massive job cuts made lemonade out of those lemons 2020 gave them. In particular, home-based microentrepreneurs have emerged as a more popular business trend.

To begin with, let’s clarify the notion itself. Home-based business (HBB) is a type of small business run from home without any external offices. As a rule, it has no employees outside of the given household. Except for the founder, family members may also participate in the business activities. Thus, in some cases, HBB can be classified as a family business.

It’s hard to correctly estimate the number of existing HBBs in any given country since many of them bring little profit and aren’t properly registered. However, it’s clearly a popular business type. At least in the US, the share of home-based businesses among all SMEs has remained relatively constant during 2007-2017, at about 50% of all firms. In 2020, the number of small businesses in the US reached 31.7 million, making up nearly all (99.9%) US businesses. About 80% of small businesses are operated and owned by a single person, with the majority of them based at the owner’s home.

Why is HBB so popular?

It has numerous advantages:

  • Minimal investment is needed. You save costs on office maintenance, salaries, commuting, and even smart clothes.
  • Not needing to commute is a great time-saver.
  • You can combine some job-related operations with daily household chores. This way, you’ll free up your evenings for family, friends, and hobbies.
  • You can create a healthier work-family balance, working side by side with your partner and children.
  • There’s less routine if you wish and much more freedom. You can do whatever brings you joy during short breaks (exercise, dance, play with kids, paint, etc). In an ordinary office, the break is usually limited to a cup of coffee, a cigarette, or a short walk. The choice of clothing is also up to you. There’s no dress code.
  • Comfortable working environment. Your home may be much cozier than any office. If you have a private house, you have the privilege of working outside, in the back garden, by the pool, you name it. You can even work in bed, or while taking a bath (depending on the operation type).
  • There are some tax benefits for home-based business owners. If you use part of your home for business, you may be able to deduct expenses for the business use of your home. Check the local legislative resources to find out more.

Of course, it’s not all rainbows and unicorns when you start a business from home.

On the downside:

  • You may get too distracted. Household chores may bother you while working as you can’t ignore what needs to be done when it’s right in front of you. Your family may require your attention when you need to concentrate on the job. Lockdowns especially contribute to that.
  • The absence of office-like space may decrease your productivity if you lack self-control and motivation.
  • There are less communication and buzz, so you might get lonely or bored.
  • Some problems with customers can occur. Not all the clients will take you seriously, as the office or physical retail location seems more solid.
  • Zoning laws may limit some of your business activities.
  • There’s a lack of physical display, so you’ll need to pay twice as much attention to social media marketing to extend your customer base.
  • You’ll either need to get SMM skills yourself or hire a professional.
  • You sacrifice your private space and security when you decide to grow your business and hire additional personnel without changing the home-office model.
  • The boundaries between your professional and private lives blur and you can’t “leave the work problems at work” since your office is actually right next to you. Neither can you stay away from family conflicts being in the same house.


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