Working from Home vs Home-based Business

Small Business Vs. Working From Home Differences Explained

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Are you considering starting a small business or planning to work from home? Are you overwhelmed at getting started and unsure where to begin? Working from home as an entrepreneur or freelancer isn’t always easy, but it doesn’t have to be daunting. With the right mindset and know-how, anyone can harness their potential and succeed in creating a successful business; understanding the differences between a Small Business and. Working From Home Is helpful.

Working from home is when your employer may have you work from home for a time. This is similar but not the same as telecommuting or remote working. On the other hand, a small business is where you are an entrepreneur. You own, run, and operate your business, and many people will use their homes as your base for business operations. Working from home and having a small home-based business may seem very similar, but they are very different, with some significant differences.

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Deciphering the Distinctions: Small Business Ownership vs. Working from Home

Venturing into the realm of small business ownership or opting to work from home can be an exhilarating yet challenging decision. If you’re at the crossroads of making this choice, understanding the nuances and differences between the two can be pivotal.

While both paths offer the allure of autonomy, they come with distinct dynamics and requirements. Working from home typically involves performing job duties for an employer remotely, differing from telecommuting or remote working in certain aspects.

On the flip side, running a small business entails entrepreneurship, where you are at the helm, managing and operating your venture, often using your home as a base. Although working from home and managing a home-based small business may appear similar, they diverge significantly regarding responsibility, autonomy, and operational scope.

Read on as we aim to unravel these differences, providing clarity for those standing at this professional crossroads.

Working From Home Explained

Working from home is not the same as running a home-based business.   We define working from home as: 

Working for an employer who has you work from home for either a short period of time or an extended period of time.  Normally this is not permanent but for a specific period of time or project.  As the employee you are paid as if you are working in the office. You are also expected to perform your work duties as if you are still working at the office.

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When you work from home, your employer often provides you with the equipment you need to complete your work from home, such as a computer or telephone system.  Depending on your agreement and contract with your employer,  the equipment they provide is usually still owned by your employer. 

Your employee usually expects you to have a proper place in your home to conduct your work as if you were still at the office.  Many employers will have you sign in and out on a computer system when you are working,  just like you would punch a time clock at an office. 

Telecommuting and Remote Work Is Not the Same As Working From Home

Many times, telecommuting and remote working can get confused with working from home. They are very similar, but there are also some unique differences.

  • Telecommuters – Telecommuting or telecommuting is not the same as working from home. A telecommuter usually maintains a traditional office and may work from an alternative work site or location. This is not always from their home but could be where the company needs them to work. They may telecommute for work 1 to 3 days a week and then go into the office the other days of the week.  A telecommuter can also be called a telework, home-sourced, or work-at-home employee.
  • Remote working – Remote working is where the company will allow a specific team or group of people to work from home.  For this to be successful, computer and communications systems are usually in places such as group chats, regular online meetings, and other kinds of workflow. Remote employees may work full-time or a few days a week from home.

Many times a company may allow its employees to have a flexible work schedule. A flexible work schedule is if an employee needs to take a longer lunch or take a child to see the doctor, the employee can make up the hours they missed at another time.  

Most companies that allow their employees to work from home, telecommute, or work remotely will have very strict guidelines in place. The employee usually cannot be the main caregiver for a child or elderly parent and would need to have a suitable location at home where they can work uninterrupted.

You are employed by a company when you work from home, telecommute, and remote work. And so you are getting your salary or commission payments directly from the company you work for.

A Small Business or Home-Base Business Explained

A small or home-based business is when you are an entrepreneur, company, or business owner. Even with tiny home-based businesses, where only you work the business, you are still considered an entrepreneur.

Here is our definition of a home-based business. 

A home-based business is a business that you own. Your work is done primarily from your home.  Your home-based business can be a full-time business, a part-time business, or a business you are doing as a supplemental income for your family. In a home-based business you may do part or most of your work at other locations, but your main center of operations, ie your accounting, and other aspects of your business are located in your home.

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There are also several small or home-based businesses like a home-based full-time business, home-based part-time, or supplemental home-based businesses. Small businesses can or cannot be located out of the home, but many small businesses are.

Here is some information on each of these different kinds of small home-based businesses:

Small Business and Home- base full-time business 

A small home-based full-time business is a business where you earn a full-time income from your home-based business.  For any home-based business, this will be the most difficult kind of business to develop and will probably take many years.

For example, some bloggers earn a full-time income through their blogs. However, developing a blog usually takes many years of consistently putting out excellent content with writing. For any home-based full-time business, the full-time income will not come immediately and will take time with a lot of hard work and effort.

Here are some things to consider when looking to start a home-based full-time business:

  • Business Capital – Have enough business capital to support yourself while trying to earn a full-time income from your home-based business.  Do not expect to start your business and automatically earn enough income to support yourself and your family.  Building any business, especially a full-time profit-generating business, takes time, and there will be additional expenses for your home budget. For example, your electricity or water bill could increase. You may need a better telephone or internet service or more stable electricity if that is a problem. All of this can be an additional expense.
  • Discipline and Hard Work – To start a full-time home-based business will take a lot of discipline and hard work.  You may work long hours, even on the weekend, or late into many evenings.  Be prepared for this, as this will happen. 
  • Proper Place to Work –  To work from home, you need to have a place where you can effectively work.   Having a proper desk or working space will be challenging, especially if you share your space with your family.

A small business can be out of your home, or it can be from another location. To run a small business, you will need to have the same attributes as a small home-based business. To consider the added income, you will need to be able to support an office outside of your home.

Small Home-based business part-time and supplemental income. 

Like a full-time home-based business, a part-time home-based business is very similar, but since this is a part-time business, you are usually not depending on the business as the support for you and your family. A supplemental home-based business is a business that you may start to help supplement your family’s income.

As with any kind of business, here are a few things you should also consider when starting up a part-time or supplemental home-based business.

  • Finances – Can your or your family’s finances support you in starting up a business?  There will be some start-up costs you need to look at to see if your finances can support you in starting a business.    
  • Proper Place and Tools to Work With – Do you have a place you can work from in your home?  Do you have the tools you need to start up your home-based business? If you have children at school, you may find that you can work during the day when they are gone to school. This kind of setup may work well for you and your family.  If you have a family, you must consider this when starting a home-based business. You must pick a business niche that fits your and your family’s home lifestyle.

Running a small business that is also not located in your home, then you will also need to have these attributes in place.

The goal of any business is to earn income.  So, whatever business niche you choose, you should look carefully at your income goals and ensure you can earn some income from your business.

What is a Remote Home-based Business?

A work home-based business is very similar to a small business or a completely home-based business period. Still, a few differences exist between a remote home-based business and the other types of businesses.

Some people run successful online businesses, and their home is a remote location, so we called this kind of home-based business a remote home-based business. Many people who work remotely like this are bloggers or social influencers who earn their income through their online work, so they can work from any location, time zone, or place they choose.  

Working remotely like this and earning a good income that supports you and your travel usually takes many years of hard work and very specific technical computer skills and knowledge.

We still consider this mainly a home-based business as this kind of business is usually run by just one person or a couple, and even though their home is remote, they have many of the similar aspects of a regular home-based business.

A home-based business does not mean you must work from home or home. If you find it works better, you can work in a cafe or coffee shop for several hours each day. Some people find working outside the home works better for them, and they can complete more work this way.

If handled correctly, a small or home-based business can be a great way to earn a full-time, part-time, or supplemental income.

But with any business venture, there are many factors that you must consider when you are looking to start up a home-based business.  But one of your primary considerations will be if your living situation, including your family and personal life, can support a home-based business financially and with other aspects.

At A Bus On A Dusty Road, we talk about travel, life, and ex-pat living. We are all about “Living Life As A Global Citizen.” We explore social, cultural, and economic issues and travel.

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How Do I Start A Home-based Art Business?

If you are considering starting a home-based art business, you should first try to understand your goals in starting your business. It would be best if you also were sure that you have a place in your home to operate your business and mainly to produce the required artwork. But, all of this will not matter if you are not producing high-quality artwork consistently.

You can find out more about how to start up a home-based art business by reading the blog Planning to Start A Home-based Art Business, What To Consider by clicking here.

Do I Need To Have a Website?

We recommend that anyone looking to have a business also consider having a website, especially if you need it to help you get more business. There may be some businesses where you do not need to have a website, but we find that a website can help you look professional. Also, a good website can give you credibility.

For some ideas on why having a website is good, you can read the blog 11 Reasons Every Artist Should Have a Website by clicking here.

Anita L Hummel
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