Home-based businesses have edge due to commuting ‘drain’

Home-based businesses are at an advantage to other firms due to the “drain” of commuting to a workplace, according to a new study.

Kevin Johnson, director of Melbourne-based Geografia economic consultants, has analysed recent census data to determine which workers commute the furthest.

He found tradespeople and retail workers commute the furthest while workers in the knowledge economy – including those in finance, IT and higher education – commute the least.

According to Johnson, artists are more likely than any other workers to favour at-home employment at 23.3%.

Johnson says for many sectors, the daily commute can compromise the success of a business, particularly start-ups.

”We spend enormous amounts of time, energy and resources commuting from where we live to where we work. That commuting time is simply a drain,” Johnson says.

“I don’t think there are any advantages to commuting at all unless you like the time in the car alone. But if you’re a small business, time is money.”

Johnson says working from home is a viable option for any business where the primary tool is a computer.

“You are a little more isolated professionally, but that’s increasingly less the case as internet access gets better,” he says.

“The advantage of working from home is that it’s very cheap. You’re more assured of not going out of business because you don’t really have to fork out a long lease and you can learn what you really need to run your business before you make the financial commitment to set up an office somewhere.”

“Also, you can work whenever you like. When you’re starting a business, you might be putting in 80 hour weeks to get your business going.”

Johnson says despite the advantages associated with working from home, start-ups should expand their business venue in line with the expansion of their operations.

“I remember a market research guy who started his business out of his home. He said when they reached about 12 people sitting around his lounge room, it was time to get an office,” Johnson says.

“From my own experience, I don’t think you’d want more than two or three people [when operating a home-based business].”

“If you’re really not in a financial position to be able to take a lease on an office space by then, you’re probably doing something wrong.”