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The small business sector is a dynamic, innovative, and growing force that provides challenge, fulfillment, and financial security to millions of Canadians. Studies show that over 75% of these small businesses have under five employees, and various studies estimate that there are approximately 2.2 – 2.5 million Canadians working from home. This would include part-time or full-time self-employed people, as well as moonlighters.

Some of the trends which have encouraged the start-up of home businesses are:

Cocooning. Many people are preferring to centre their leisure time around the home. This lifestyle trend has been labelled “cocooning” and comes from the desire to eliminate a lot of outside stresses. This is reflected throughout the economy in an increase in the number and variety of goods and services available, such as home improvements, gardening equipment and supplies, delivery services, home electronics, home gymnasiums, and home entertainment.

Computerization. This trend has had a profound impact on home-based businesses. Equipment such as fax machines, photocopiers, personal computers, modems, and specialized software is not only smaller and more compact but affordably priced. Cellular phones, voice mail, memory pagers, and answering machines also make it possible to provide accessibility to the business world. A home office can have all the technical sophistication and professional image of a traditional business office outside the home.

Combining roles of career and raising a family. Many parents prefer to raise a family and operate a part-time or full-time business from home at the same time. There are many examples of both spouses operating businesses at home, either the same business or separate businesses.

Growth of the service industry. Many home businesses are ideally suited for this industry. They generally require less start-up capital, have lower ongoing operational expenses, and have minimal equipment cost.

But though there are many benefits, there are also risks and frustrations. Many people have an idealized picture of the rewards and pleasures of running their own business. It is important to objectively look at both sides of the issue of small business ownership in order to make a realistic decision.

Home-office benefits
Home-based business ownership offers some distinct advantages:

Start-up and operating costs are much lower, and therefore the business is easier to get established and less risky.
Commuting time and expense are reduced or eliminated
There are more opportunities for your business to grow because of fewer financial constraints. Therefore, you can expect to turn a profit sooner and increase your chances of success.
Such a business provides an atmosphere where commitment to a family and a career can be combined for the benefit of both.
Spouse and family members can be employed by the business.
There are tax write-offs that you can take for expenses you are already incurring relating to your home.

Home-office drawbacks
Operating your business from home has some disadvantages. However, many of these can be anticipated and thereby avoided.

There may be isolation from the companionship of and interaction with colleagues or fellow workers.
There is a risk of working too hard because of a lack of separation between the work and home environments.
Space may be cramped or inappropriate for an ideal working environment or for growth purposes. Your inventory storage and work area may spill over into your living space.
Personal or family lifestyle patterns or priorities may be disrupted or have to be set aside.
Distractions and disruptions due to the nearness of family or friends may interfere with concentration.
Tensions and frustrations may develop because of work blending into the family relationship.
It may be difficult to hire employees due to limited or inappropriate space.

Running a home-based business is not for everyone. What may be an advantage to one person may be a disadvantage to another. You will need to carefully assess your personal situation to decide whether the disadvantages are major or minor obstacles for you.

Copyright © 2021 , Douglas Gray, LL.B. All rights reserved. Any reproduction of the material contained in this website is strictly prohibited. E&OE (Errors and Omissions Excepted). Please refer to Copyright and Disclaimer at bottom of website page. Refer to Books section for related information.


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