09/18/2012 06:10 pm ET Updated Nov 18, 2012

Is Working From Home the Best Choice for Your Small Business?

Keeping costs to a minimum is critical when starting a small business. Working in a home-based business can be an effective approach to limiting overhead when you need to save capital for other areas of your business. In many cases, the millions of small businesses launching today are getting down to business from their basements, garages or kitchen tables. By starting at home, you can get your company off the ground while saving money for when you can afford to hire help and moving into professional office space. But, is working from home the best choice for your small business?

If you have a personality that needs people to chat with, you may need to look into a small business incubator space look for a space with the National Business Incubation Association or a virtual office space with a firm such as Regus.

The isolation of being at home can really be tough. It's hard to turn it off, too. Many small business owners are workaholics unintentionally, and working from home really facilitates being that way. Sometimes when you are a home-based business, the people closest to you might not take your work seriously. When I started my first business, my mom would call in the middle of the day to chat. That is a perfect example of how those close to you can distract you. In business, your time is money. Be firm with friends and family about your work hours and when then can call you. If you do take a personal call, keep it to 10 minutes. I have a few tips for evaluating whether you are ready to work from home.

Ask yourself these questions before deciding set-up shop in your house:

  • Are you self-disciplined enough to stay focused on your work?
  • Are you good at setting a schedule?
  • Are you good at communicating when there is limited visual feedback?
  • Can you fight the temptation to call a friend or run errands?
  • Do you need to talk to someone as part of your work process?
  • Will you be able to separate work life and home life?
  • Will you still be able to afford childcare help?

Now, if you are still thinking that becoming a home-based business is for you, here are a few tips to help you manage.

Get out of the home office at least twice a week. Go to networking functions, schedule client appointments, and try to find yourself a place to work outside of your home with your laptop. Bookstores or libraries are good options. Coffee shops and bakery stores such as Starbucks or Panera Bread even offer free WiFi. They are all great places to hang out and get work done.

Build a check-in list. Get yourself a group of other small business owners to help stay motivated. It's good to have regular conversations with people who know what it's like to be a start-up business and working from home. Build your network of other business owners, and when you get the urge to turn on the TV, spend two hours on Facebook looking for old boyfriends or worse, take a nap, dial-up sometime who can help you get back on task.

Talk up your new business. Make sure everyone knows you are in business and what you do. If you talk up your business everywhere you go, you'll be amazed how you will attract customers to you. It's also always good to practice your elevator pitch. It will keep your confidence up. Sometimes when you don't see other people often, your presentation skills can get rusty. Try talking about your business at your local hair salon, business association, supermarket, even at your child's after-school activities -- and certainly at your old job. Especially promote your business to those closest to you. Your brother might know someone who can give you a contract.

Develop strategic alliances. Find other small businesses you can partner with to pursue larger opportunities. It's a great way to help each other grow in business. Develop joint promotions, trade tips and resources. Work out a formal referral fee agreement, so there's no misunderstanding about compensation for leads. Look at joining a sales networking group such as NAWBO, LeTip, or BNI.

While you're working at home, you should set up routines to come in contact with people as much as possible -- just as if you had a neighborhood storefront or an office on a corporate campus. Stay the course and you'll grow your business to the point where you can get back into a corporate setting, if you decided that you need to do so.

Can you offer tips for launching a successful business in the home?

This was originally published under the title: "Are You Ready to Work From Home?" at

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Melinda F. Emerson, known to many as SmallBizLady is America's #1 small business expert. As a seasoned entrepreneur, professional speaker, and small business coach, she develops audio, video and written content to fulfill her mission to end small business failure. As CEO of Quintessence Multimedia, Melinda educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing. She writes a weekly column for the New York Times You're the Boss Blog. She hosts #SmallBizChat Wednesdays on Twitter 8-9pm ET for emerging entrepreneurs. She also publishes a resource blog Melinda is also bestselling author of Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works.