Working From Home and Home-based Businesses, What You Need To Know

Working from Home vs Home-based Business

Is working from home and running a home-based business the same thing? Actually they are not the same as there are some very distinct differences between working from home and running a home-based business.

Working from home is when your employer may have your work from your home for a period of time. This is similar but not the same as telecommuting or remote working. On the other hand, a home-based business is where you are an entrepreneur. You own, run, and operate your business using your home as your base for your business operations.

Working from home and having a home-based business may seem very similar, but they are actually very different with some very important differences.

Working From Home

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.

A BUs On A Dusty Road

When you are working from home, many times your employer will provide you with the equipment you need to complete your work from home such as a computer or maybe even a 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 where you can 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. 

Telecommute and Remote Work Differences

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

  • Telecommuters – Telecommuters or telecommute 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 a location the company specifically 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 known as 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 and computer and communications systems are usually in places such as a group chat, 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 are allowing 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.

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

Home Base Business

A home-based business is when you are an entrepreneur or the owner of the company or business. Even with very small home-based businesses, where only you are working the business, you are still considered to be an entrepreneur.

Here is our definition of a home-base 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.

A Bus ON A Dusty Road

There are also several kinds of home-based businesses like a home-based full-time business, home-based part-time or supplemental home-based business, or someone whose home is wherever they work such as a travel blogger – we call this kind of work a remote home-based business.  

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

Home- base full-time business 

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

For example, some bloggers are earning a full-time income through their blogs. But developing a blog usually takes many years of consistently putting out excellent content with writing. For any kind of a home-based full-time business, the full-time income will not come right away 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 income enough business capital to support yourself while you are trying to earn a full-time income off your home-based business.  Do not expect to start your business and to automatically earn enough income to support yourself and your family.  Building any kind of business, especially a full-time profit-generating business takes time and there will be some 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 find yourself working 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 in your home that you can effectively work from.   If you do not have a proper desk or working space, it will be difficult – especially if you are sharing your working space with your family.

Home-base 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 starting up a business?  There will be some start-up costs you need to look at to see if your finances can really support you 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 set-up may work well for you and your family.  If you have a family you will need to consider this when starting a home-based business. You will need to pick a business niche that will fit into you and your family’s home lifestyle.

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

Remote Home-based Business

There are people who 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 of the people who work remotely like this are bloggers or social influencers where they earn their income through their online work, so they are able to work from any location, any time zone, or any 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 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 that you have to do all your work from home or in your home. If you find it works better for you, then you can do your work in a cafe or coffee shop for a certain number of hours each day. For some people they find working outside the home works better for them and they are able to get more work completed this way.

A home-based business, if you handled correctly, 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 major considerations will need to be if your living situation, including your family and personal life will be able to support a home-based business both financially and with other aspects.

Related Questions

How Do I Start A Home-based Art Business?

If you are considering starting a home-based art business, then you should first try to understand what your goals are in starting your business. You need to also be sure that you have a place in your home where you can operate your business from and especially to produce the required artwork. But, all of this will not matter if you are not producing high-quality artwork on a consistent basis.

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 who is 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

Hi, I live in Hanoi, Vietnam but spend time traveling the region. I love to share with you things I see and learn through my travels.

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