Several years ago when I was working for HP, my manager was really promoting Home Offices to reduce our Sales Districts office costs which were eating a big hole in his P&L budget. At that time our HP Sales office was located in Mountain View in the heart of Silicon Valley where the Commercial Office expenses are very high. He was allowing us to expense furniture , Printer and PCs to set up Home Offices to reduce costs.
While HP was justified in promoting a home office, we would like to recommend that everyone explore the following 4 questions before investing in a Home Office.
1) Privacy: If you are going to be lucky enough to set up detached man-cave to call office, then you should seriously consider Privacy before you set up an office. For years I was using a detached Studio with a Bathroom, Shower and Kitchen as an office which was perfect. But now that my Home office has been moved to one of the bedrooms, Privacy is an issue since I am sharing the office with the Dog and the Cat along with constant barrage of requests for more grocery items!!
Without setting up clear signs for communication and access GREEN (Safe to Enter), Yellow (Enter with Caution), RED (Avoid at all costs), it will be a mad house as the recent chase of the family dog and the cat in the hall way while I was on an important Skype call.
2) Noise Reduction: If your office is inside the house within earshot of the rest of the family, you need to invest in some noise reduction technology to make sure your office is sound proof from the rest of the house. In fact, as I am writing this, my daughter is singing as loud as she can in the hall way on her way to her room! Simple sound proofing can be accomplished by replacing the hollow doors with solid-core doors and adding weather stripping to prevent noise leak. The other extreme is sound proofing walls which is simple during new construction but more complicated with a finished room.
3) Tax Deduction: The cost of Home Office set up and Sound Proofing could be tax deductible, but you should contact your CPA to make sure before you start your project. Just like any other home improvement projects the cost of these improvements have to be amortized which is one more reason to discuss any improvements for a home office with your CPA.
4) Resale Value: Does having a formal sound proof office add to the value of your home!? The answer depends on the type of property and the floor plan. If your office is the 2nd bed room in a 2 bedroom house, the odds of a buyer using it as an office is slim therefore it will have less value to a buyer of a 2 bedroom house. However, if your home has a 4 bedrooms in addition to a formal office, then having a home office offer much more utility hence more value. You can request a Home Value Request to get a much more accurate picture of your After Repair Value before you set up an office.
Bottom line is that before you spend the money to set up an office, be realistic about how productive you will be in an home office environment. Everyone’s experience will be different, but most of Entrepreneurs that I frequent prefer an office setting like Hacker Dojo to a home office.
Are you as productive in a Home Office than your Company office!? Let us know.