Copyright 2013 by Morris Rosenthal
All Rights Reserved
Starting a PC Service Business
Business Infrastructure (Topics Covered)
Working Out of the House
Looking back over a lifetime of handing out unsolicited advice, I think that the worst steer I ever gave somebody was pushing a friend with whom I'd built a successful small computer company (over a million dollars a year in hardware sales) to move out of his house and into commercial space. I had three real motivations for doing this, two of which had nothing to do with conducting business. His house was on a nice, quiet, residential street, and although the neighbors weren't complaining (at least to me), I felt bad about the increasing truck traffic, especially when a common carrier (semi-trailer) delivered a large order, taking down a neighbor's low hanging tree branch. Second, it drove me nuts that he always parked near his front door, effectively blocking the driveway and forcing everybody else to park in front of the houses of his neighbors. Depending on what was going on, this could be a half-dozen or more cars, and some idiot would usually pull into the end of the driveway and block the sidewalk. If I had lived on the street, I would have complained to the city. Finally, I wor-ried about how it affected our credibility with customers. One day, a potential customer from a state agency came with a couple people to look us over, and from their body language, it was clear that we had just lost the business. I suppose I felt bad about the mountains of trash we put out on garbage day too.
Well, the hell with the occasional missed opportunity, and the truth is, we could have rented a conference room in one of the virtual office facilities that exist in every major city to give people just like us a prestigious address. The neighbors weren't complaining, so most of the problem was probably in my head. Working out of the home offers so many financial advantages and creature comforts that I consider it the first option for anybody who isn't opening a retail store. The primary financial advantage of working out of the home is that you're already paying for it, and some of that cost now becomes a tax deduction. Security is less of a worry since you sleep there. You have a full kitchen and bathrooms, not to mention an extra phone line (your house phone) at no extra cost. You don't have to worry about negotiating or understanding commercial rental agreements, which generally commit you to a minimum of a full year.
There are some downsides however. First there is the little matter of zoning. If you live in an area that is zoned residential, you are somewhat at the mercy of your neigh-bors. There are businesses that can be legally conducted in most residential neighborhoods, but the rules usually preclude employees, manufacturing, and anything else that might impact the quality of life in the area. From the standpoint of carrying out a computer business, lack of open space is one of the biggest drawbacks to working out of the home. Unless you are willing to trash all your furniture and convert the whole ground floor into a computer workshop, you'll always be tripping over boxes and searching for an open space just to set something down.
Power can be a problem also, if you're building and testing lots of computers. The standard 15 amp breakers in most homes will have you running extension cords all over the place to spread the load. Finally, of course, there is the credibility issue with people who want to see your manufacturing facility, but that does bring up a key business rule. It's not the quantity of customers that's important, it's how they fit into your business operations. If it costs you $20K a year in rent to add a single, large customer who is expected to bring you $20K a year in profit, you're working for free. The worst drawback of paying for commercial space is that it brings about accelerated attempts to raise revenue to justify the expense. This leads to making poor hires, selling at low margins, and gambling on businesses outside of your core competency.
The 161 page paperback book "Start Your Own Computer Business" is available through your favorite bookstore or you can order through Amazon.com for $14.95, or buy the instantly downloadable PDF version for $11.95.