Working from home tips for small business owners

In 2020, the number of people working mainly from home in the UK hit around 5.6 million. That number represents a whopping 17.4% of all UK workers. 

Of course, the pandemic had a huge impact on these figures. But it’s also true that working from home, even running a small business, is significantly easier than it used to be, thanks to all the new tech that’s available. 

If you’re considering running a small business from home, or you’ve already begun, there are a few simple things you can do to help improve your financial management and day-to-day operations:

• Claim home running costs as business expenses.
• Claim home office setup costs.
• Budget for utility costs. 
• Try to stick to working hours.
• Schedule around childcare. 
• Start meal prepping. 
• Use accounting software.

Our first working from home tip is to claim costs where you can. Even though you’re running your small business from home, there are still loads of home running costs that you can claim as business expenses.

You can claim on expenses like these:

• Heating
• Electricity
• Council Tax
• Mortgage interest or rent
• Internet and telephone use

You can only claim the extra amount you spend, so you need to figure out how much that is. You can figure it out by dividing the total amount you spend divided by the number of rooms you use for business and the amount of time you work there. 

For example, let’s say you have five rooms in your house and you use one of them as a home office. 

If you spend £500 a year on electricity, then you’re spending £100 per room, so your home office electricity costs are £100 per year. 

Next, divide that number by the number of days you spend using that room. For example, if you only work one day per week from home, you’d divide it by seven to give you £14.29. If you work there five days a week, multiply it by 0.71 (5/7) to give you £71.45. 

Alternatively, you can use the simplified expenses method to claim a flat rate on your home running costs. You may not be able to claim as much back, but it will save you some time. 

The amount you can claim still depends on the amount of time you use your home for business, like this:

• 25 to 50 hours per month: £10
• 51 to 100 hours per month: £18
• 101 or more hours per month: £26

When setting up your home office, you can claim a number of the costs as business expenses, as long as they are exclusively for business purposes.

For example, you can claim on any home office equipment you might need, such as:

• A computer 
• A work phone
• An office chair
• A desk
• Stationery

If you have something you use for both business and personal use, you can’t claim the initial purchase, but you may be able to claim back a proportion of the running costs. 

Although you can claim back some home running costs, you may still find that you’re spending a lot more on utilities simply by being at home all day. For example, maybe you like a little background music while you work, or you leave lights on after leaving a room.

These little costs can quickly add up throughout the year, so try to develop some good habits for energy conservation: 

• Turn lights off when you leave a room. 
• Invest in energy-saving bulbs. 
• Don’t leave the TV on. 
• Keep doors closed to preserve heat. 
• If you’re cold, try extra layers before you turn the heating on. 

These are just a few simple home working budget ideas. For a more detailed look at small business budgets, try our other article, “How to budget for starting a business.”

One of the hardest things about working from home is how work and home life can blur together. After all, there’s no office to leave, so many people find it difficult to switch off. 

Of course, as a business owner, there will always be some crossover between work and home life, but letting it go on for too long can quickly lead to burnout. 

The best way to prevent this is with office hours. Try your best to get everything finished within a typical working day, and relay that to your clients to stop them from contacting you after hours. 

But it’s not just for the sake of your sanity. Regular working hours will also help you work out what your time is worth, helping you better understand your hourly or weekly rates. If you need some help staying on track, try setting working hours on your Google Calendar.

Running a business from home can be a blessing if you’ve got kids. You can fit your work schedule around their needs, allowing you to spend more time with your children while saving on childminder and babysitter costs. 

The key to making it work is sticking to a strict schedule. You need to accept that most late afternoons and early evenings are non-working hours, so you’ll have to make up that time elsewhere. 

When working from home, you’ll probably see an immediate difference in the amount of money you spend on food and drink throughout the week. 

That said, if you don’t properly plan out your meals beforehand, you might find yourself snacking on convenient unhealthy options throughout the day. It won’t be good for your budget or your body in the long run. 

If meal prepping is new to you, it’s a great way to save money and time throughout the working day. Try making extra portions at dinner time that you can have for lunch the next day, or make sure there’s always ingredients for quick, substantial meals at lunchtime. 

When running a small business from home, you should look out for any software or apps that can improve your business operations. That’s why thousands of business owners use the Countingup app to make their financial admin easier. 

Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. With features like automatic expense categorisation, invoicing on the go, receipt capture tools, tax estimates, and cash flow insights, you can confidently keep on top of your business finances wherever you are. 

You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. Seamless, simple, and straightforward! 

Start your three-month free trial today. 
Find out more here.