Home Business

Pros and Cons of Operating a Home-Based Business

Running a business at home sounds great, doesn't it? Still, there's a downside to the upside. We examine the pros and cons of operating a home-based business.

What could be better than operating a business from the comfort of your own home?

Pros and Cons of Operating a Home-Based Business

For many people, a home-based business seems like it would be an easy way to make a living. But when you separate the fantasy from the reality, you discover that home-based business ownership may not be all that it's cracked up to be.

Home-based business ventures definitely have benefits, especially for self-motivated entrepreneurs who are skilled at adapting themselves to non-traditional work environments. But entrepreneurs who aren't prepared for the challenges of a home-based business find themselves quickly overwhelmed. Although a home-based business approach has potential for most business owners, you'll need to carefully weigh the benefits and drawbacks before you make any firm commitments.


  • Lower startup costs. Home-based small businesses have substantially fewer startup costs than businesses that are located in retail or commercial space. No lease means you can shift resources to marketing and capital equipment, and deduct part of your housing costs as a business expense.
  • Flexible schedule. Home-based entrepreneurs typically enjoy the benefits of a flexible schedule. You will work the same number of hours (or more) when your business is located at home, you'll just have more control over when you work them.
  • Mobility. Another advantage of home-based business models is that they are highly mobile. If your spouse needs to relocate, it can be much easier to pack up your company and move on to a new location.
  • No commute! It sounds insignificant, but the elimination of commuting time increases the amount of time you can dedicate to your business. Over the course of a year, the time you save can really add up.


  • Decreased accessibility. Home-based businesses are generally less accessible to customers and vendors. Although it's possible to invite clients into your home, most home-based owners try to avoid it.
  • Interferences. Interferences happen all the time in home-based businesses. Kids, neighbors, pets – the list of distractions you can expect to face goes on and on.
  • Nonprofessional image. Businesses that are located in homes tend to be viewed as less professional than traditional business models. That is changing as more people embrace a telecommuting lifestyle, but be prepared to compensate for lingering misperceptions.

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