Business operations

Pros and cons of running a business from home

Home is where the heart is, but should it be where you work? This guide explores the advantages and disadvantages of running a business from home.

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In this article

Making the choice

If you haven’t worked from home before, it may take some getting used to. There are many benefits. But there are also some drawbacks and it may not be for everyone. Before setting up a home business, take some time to weigh up the pros and cons.


There’s no doubt that working from home can make some things easier. Here we cover the benefits, which also depend on your unique personality, your home set-up, and your type of business. 

No commuting and having more freedom 

You’ll likely still need to visit customers or suppliers. But by not travelling to work each day, you could save on time and transport costs. 

Depending on the needs of your customers, you can wear what you like and work when (and how) you like.  

With instant access to your home office there’s no worries about leaving something at work.

Fewer distractions 

Being away from office chatter, you can create a quiet environment that lets you focus on what needs to get done. Of course, this depends on your home life being free from distractions.

Cheaper costs

You can save on (or even eliminate) certain costs such as rent, which can be a significant expense for most start-up businesses.

You can also share some of the costs of running your home, such as rates and electricity expenses. For more information on claiming business expenses for your home office, talk to your accountant or visit the Inland Revenue website. 

Less risk

Setting up a home business can also be a low cost (and lower risk) way of trialling your business concept. If the business grows, you may need to find larger premises. For example, a home-based catering business may need to move into a commercial kitchen. But at least you haven’t made a huge investment upfront.


Intertwining your work life with your personal life can be a challenge for many. Here are some things to consider.

Switching off

Your office is always with you, so it can be difficult to get out of work mode. That can lead to burnout if you can’t find a way to manage the constant blurring together of your work and home life.

Space to work

Another thing to consider is if you have a suitable workspace in your home, and that it's adequate for your needs. Not everyone can dedicate a room to business or have a separate entrance.

Staying on track

It can be hard to maintain focus, motivation, and a disciplined work routine. There’s always the temptation to do household chores when you should be focusing on your business.

If your home life naturally has a lot of distractions, it can be hard to get work done.


Those ‘water cooler’ conversations can be a valuable part of building relationships at work. When you’re at home, it’s common to feel out of the loop without people to chat to and bounce ideas off.

Professionalism and access to expertise

If you run a business out of your home and clients need to visit, does your environment give off a professional vibe? People who visit will expect it to look and operate like a real business with a dedicated workspace.

If you come from a corporate environment, you may be used to having specialists at your fingertips, for example an IT helpdesk, or in-house HR and legal experts. When you’re working from home, you have to be much more of a jack-of-all-trades.

While there are ways to successfully manage many of these issues, it pays to be aware of them before taking the plunge.

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