The Hidden Costs of Running a Home Based Business

For much of human history, running a business out of your home was the norm.

However, this was the case largely because most people’s homes were on their farms, or their houses served as the base of their cottage industry activities.

Industrialization changed this, though, and now most of us have to travel to somewhere far from our homes to get to our place of work. In fact, the average person spends a little less than half an hour each day just traveling to work.

Understandably, many people are getting sick of having to do this, making working from home a highly-desired arrangement. It allows you to travel, or spend more time with your family, and also pay more attention to your other hobbies and interests.

However, like most things, there are some downsides to running ahome based business. One of the most significant is that you will beresponsible for the costs of running your business. Okay, you probably already knew this, which is why you have spreadsheets and other accounting programs working behind the scenes. But there are other costs involved that you mightnot be considering, and it’s important you don’t forget.

Here are some of the most common.


If you’re selling products, then you need somewhere to store them in between the time you order them from your supplier and pass them onto your customer. In the beginning, this could be your home, but as your business grows, this may cease being practical.

The most logical next step would be to look for somewhere you could store your inventory, but this is going to open you up to a whole new set of costs, such as rent, insurance, shipping, staff, etc. Luckily, though, there are solutions.

For example, Fulfillment By Amazon (FBA) is agreat service for home-based businesses. You get to list your products onAmazon, which gives you access to huge markets, but then you also get to use the logistical superpowers of the eCommerce giant. This will help you manage the costs of ordering and storing inventory much more effectively, keeping your costs down and your customers happy.

Your Office

Another expense that most people don’t consider when launching their home-based business is the office they will need to set up. You can’t run a company from your couch or your kitchen table. You need a real office with a desk, a computer, a nice chair, and, most importantly, a door.

But if you don’t already have this space in your home, then you may need to undergo some costly construction, or at the very least spend some money on office furniture.

To avoid these costs, think first if there is a way to build an office without calling a contractor. Could you clean out a room and turn it into an office? Or put a temporary wall up in a room so as to demarcate your workspace? It’s also a smart idea to look for used or refurbished office equipment and furniture, as this will help you save money.


Running your business from your home means using the service you’ve had installed in your home, the most important of which is the internet. Right now, your internet connection may be fine, but when running a business from home, you’ll be using it all the time. This could mess with your bandwidthand give you cause to upgrade your connection speed.

Another thing to consider is that you may need to spend more on heating and air conditioning. Most people turn these way down or off when they leave the house, but since you’ll be there all the time, you can’t let the temperature fluctuate too much, and this is going to come with an extra expense.

Spend some time figuring out how much you pay in utilities on average, and then do a comparison after a few months of running your business from your home. This will tell you if the time spent working at home is costing you more money than you thought.

Your Well-Being

The last hidden cost to keep in mind has nothing to do with money at all. Running a business from home is going to dramatically change your routine. The boundaries between work and home will blur, and this can easily turn into a situation where you feel like you’re always working. This is then compounded by the fact that you often feel like you’re only earning money when you’re working, which pushes you to feel as though you should always be engaged with the business.

The best thing you can do to make sure running a home-based business doesn’t ruin your well-being is to set up a routine. If you need to work eight hours a day, then set up a schedule and keep to it. This way, when you stop for the day, it will be easier for you to turn your brain off and be present for the other things you’re doing in your life outside of running your business.

Constantly Manage Costs

When you become a business owner, you need to develop a sixth sense for identifying excessive costs. But when you start running a business from home, then you need to make sure you never turn this sense off. This willhelp you develop a more critical eye towards your business, which will helpmake continuous improvement a core element of all that you do.   

About the Author: Kevin runs Broadband Search, a digital service designed to help people find the best value internet service provider in their area. He has launched and ran many businesses in his career and most of them have been home-based. He knows it’s a convenient way to work but also knows like any element of your business, you need to keep on top of costs

3 thoughts on “The Hidden Costs of Running a Home Based Business”

  1. Hey Sylviane,

    I really love your article. You shared amazing about Home Based Business Thanks for sharing this information. Keep sharing with us.

  2. Many home based business owners fail to take off big time because they already have a very constrained Finance and when things go wrong cling to the notion that things will gradually improve and when they don’t then the home business owner does not know what to do and in desperation hi take poor decisions that hurts his business.

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