Home Business

Having Employees in a Home Business

Having employees working in your home-based business opens up a host of concerns. Will you provide health insurance for your employees? How will you withhold income tax? Is your home-based business subject to OSHA standards? Try not to get overwhelmed. By doing your research ahead of time, you will clear many of the hurdles that trip up other small business owners. You will be ready to face any situation that may arise and you can make your home-based business a success.

Every small business has the same goal: Growth. However, growth also brings with it some additional challenges, including an increased workload and the need to hire employees just to keep up.

Hiring staff can be difficult under the best circumstances, but how do you do it when your business is based out of your home?

Admittedly, bringing employees into a home-based business is difficult, but it can be done. The trick is to understand the challenges you face, and to devise strategies that you and your employees can live with. Although the challenges may vary from home business to home business, here are some of the big ones you can expect to encounter.

Legal Restrictions

It's possible that you may be legally prohibited from bringing employees into your home at all. Most municipalities place special restrictions on home-based businesses in an effort to maintain the residential character of the neighborhood. Zoning codes specifically dictate the number of employees a home-based business may have. In some cases, zoning codes even limit employees to residents and immediate family members. Check with your town's zoning department to find out if any of these restrictions apply to your business.

Space Limitations

If it's legal to bring employees into your home, the next thing to consider is whether or not your house is big enough for you and your new employees. Where will the new recruits work? Is there room for another desk in the home office or will you need to commandeer another room for the business? Don't assume these questions will answer themselves. You need to have a plan specifying where you will locate additional staff before they show up for work.

Boundary Issues

In addition to space limitations, you will also need to think about boundary issues. When you were the home business' only employee it was easy to distinguish between personal and business areas of the house, and if you occasionally crossed the boundary lines it was no big deal. But how will you enforce those boundaries with your employees? For example, where will the employees eat lunch - in the kitchen or somewhere else? Before you add employees, be sure to have a conversation with other members of the family about what is (and isn't) acceptable employee behavior in the home.

HR Management

Hiring employees necessitates additional human resource responsibilities for business owners such as payroll and withholdings. If you've never done this before you should think about outsourcing human resource tasks to a payroll service. Not only will it save you time, but it will also save you the hassle of trying to find space to store HR forms and records.

Employee Retention

It's a fact that employees are less comfortable working in the owner's home than they are working in a traditional office location. If you want to retain your employees for the long haul, start making plans to move the business out of the home and communicate your intentions to your employees. If your staff views working out of your home as a temporary situation they will be more likely to try and make it work until the business can afford to relocate.

Share this article

Additional Resources for Entrepreneurs

Lists of Venture Capital and Private Equity Firms

Franchise Opportunities


Business Glossary


Conversation Board

We greatly appreciate any advice you can provide on this topic. Please contribute your insights on this topic so others can benefit.

Leave a Reply

Questions, Comments, Tips, and Advice

Email will not be posted or shared
Code Image - Please contact webmaster if you have problems seeing this image code

Problem Viewing Image? Load New Code