Thinking of opening a home-based business?

As many people near retirement age, they start contemplating working from home for the first time – either through flexible work options with their employer, or to operate their own business, If you’d like to run a business from your home, there are a number of things to consider from both the personal and business side before you launch:

  1. Are you more introverted or extroverted?

If you’re more of an extrovert, you are energized and thrive off being around other people. Even if you are working directly with clients, many home-based business owners spend the majority of their time alone. Extroverts who work alone can feel lonely or isolated. If you think this applies to you and your business idea, you will need to plan for time to be with others. Arranging regular outings with friends, colleagues and business associates, will help to keep your energy levels high.

  1. What is your level of self-motivation?

Operating a business is never easy, but it can be more difficult when you are doing it by yourself. Depending on what type of work you did before, you may need to figure out how you will keep yourself motivated and productive day in and day out, when you’re only accountable to yourself, and deadlines are often self-imposed. Using a business plan to guide your efforts and schedule your weekly activities will help you make progress on your goals and stay motivated. Having a mentor or an accountability partner can also be useful.

Whether you’re living out a life-long dream, or looking for a way to continue to contribute, starting your own home-based business is a great way for Boomers to continue earning an income, do something they love and attain more freedom and work/life balance.

  1. How disciplined/organized are you?

While you may not have any noisy colleagues or staff to interrupt you, a home-based work environment is full of its own type of distractions. You may need to learn to manage your time, and monitor how much of it is spent cyber-surfing, checking your social media accounts, visiting the fridge/pantry, throwing in a load of wash, taking the dog for a walk, running an errand, chatting with a family member or neighbour, etc. Alternatively, you may need to learn when to stop working and ‘close up shop’ for the day so that you can maintain a healthy work/life balance.

Consider using apps such as StayFocused or RescueTime, which boosts productivity by limiting how much time you spend on the internet or use a time-tracking app like Toggl. (See question about boundaries for more tips.)

Setting up business systems that will manage processes like marketing, client acquisition, intake, product inventory, accounting, etc. will help you use your time more efficiently. Create templates for frequent activities to save even more time.

A home-based business, doesn’t restrict you to conducting business from your home. One of the great things about technology is you can do business from anywhere – a coffee shop, a park, in a hotel, while you’re travelling, etc. This gift of freedom allows you to mix business with pleasure, but it can also knock you off track. A little self-discipline goes a long way in managing your time and making progress towards your business goals.

  1. Are you tech savvy? What skills do you need to acquire?

To be successful in a home-based business you’ll want to be proficient in basic technology tools such as email, instant messaging, video conferencing or virtual meeting software, websites, social media pages, etc. They let you market to and communicate easily with your clients. If you don’t already know how to use these tools, you may want to invest some time learning them before you launch your business. Most tools offer training as part of your license/account.

It’s important to have a designated space that you use only for work. The kitchen table likely won’t cut it for a variety of reasons.

  1. Is it legal?

Before you make any decisions about setting up a home-based business, check with your municipality’s zoning laws or strata bylaws to see if there are any restrictions on your home or neighbourhood. If you intend to have clients coming to your home and use neighbourhood parking, it may be an issue.

  1. Do you need additional insurance for your home-based business?

It’s a good idea to check your homeowner’s or tenant’s insurance policy to see if your business will be covered. According to the Insurance Bureau of Canada (IBC), if your insurance company is not aware that you run a business from your home, you may not be insured. A recent IBC study indicated 39 per cent of Canadians who operate a home-based business do not have insurance coverage that specifically addresses the special needs of a business.

For example, if you sell products and store your inventory in your home, your policy may not cover any loss due to fire, theft, damage, etc. Or, if a client or delivery person is injured on your premises, your home policy may not be adequate. If you only have occasional business visitors to your residence, an adjustment to your homeowner’s policy may work rather than a business policy. Best to discuss your individual needs with your insurance broker for your own peace of mind.

  1. How can you create boundaries between work and home, when your home is your workplace?

It’s important to have a designated space that you use only for work. The kitchen table likely won’t cut it for a variety of reasons. If you plan to spend hours on a computer, invest in chairs/desks that allow you to adjust for ergonomics. Even if you don’t have the luxury of a separate home office where you can close the door, you can still define your work space. Creating a physical separation helps you to make the psychological separation between work and home. When you are in that space, you are at work, when you step out of that area, you are at home. It creates a clear boundary for you and members of your family.

Make sure family members understand when they can and can’t interrupt you. You may want to post a schedule that lists your availability each week if you have a child, spouse, parent or roommate at home, e.g. I post a ‘coaching session in progress’ sign on my office door so I am not disturbed.

Scheduling both personal and business activities in your calendar will help you to stay on task and aligned with your business goals, while still making time for your life outside of work. Some experts suggest creating your own mantra to create the appropriate mindset: e.g. saying ‘It’s time to work’ when you begin your work day. And when it’s time to quit, saying, ‘It’s time to go home’ to reset your mind towards that area of your life.

Scheduling both personal and business activities in your calendar will help you to stay on task and aligned with your business goals, while still making time for your life outside of work.

  1. How does running a home-based business affect your taxes?

Depending on what type of work you do, you might be able to deduct home office and home-business expenses on your taxes.

Canada Revenue Agency allows you to deduct expenses for the business use of a work space in your home, as long as you meet one of the following conditions:

  • it is your principal place of business; or
  • you use the space only to earn your business income, and you use it on a regular and ongoing basis to meet your clients, customers, or patients.

You can deduct part of your maintenance costs such as heat, home insurance, electricity, and cleaning materials. You can also deduct part of your property taxes, mortgage interest, and capital cost allowance (CCA). For more information, see Income Tax Folio S4-F2-C2, Business Use of Home Expenses.

One of the biggest changes you may face is paying your own income taxes, rather than having them deducted by your employer. You need to factor in the annual or quarterly income tax and GST/PST payables that you are required to pay into your business planning.  You may wish to consult a tax professional to help you figure all of this out and ensure you are in compliance and getting all of the deductions allowed.

Whether you’re living out a life-long dream, or looking for a way to continue to contribute, starting your own home-based business is a great way for Boomers to continue earning an income, do something they love and attain more freedom and work/life balance. Understanding these basics and planning how you will manage your time and efforts before you launch your business, will help you get off to a quick start.


To learn more about how you can plan for and live your ideal retirement, contact me at: info@youridealretirement.ca for a complimentary consultation. 

Your Ideal Retirement Coaching offers a variety of coaching programs and workshops for individuals, couples and groups to help you assess your readiness to retire and how you can create a smooth transition from the workforce or enhance your current retirement lifestyle.

 

 

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