June 1, 2005 in Business

Stay-at-home businesses find new ways to adapt

Joyce Rosenberg Associated Press
Associated Press photo

Jeff Zbar, a writer in Coral Springs, Fla., has worked out of his home office for the past 16 years.
(Full-size photo)

NEW YORK — Many people who start home-based companies find after a few years that it’s time to move out — the business has grown too big for the house.

Yet many others are still operating out of their homes years later, finding ways to adapt as the business expands. For some entrepreneurs, it means buying or even building a new house that will accommodate the enterprise.

Robin Zucker started her public relations firm in her studio apartment in Manhattan’s Greenwich Village 25 years ago, and as the business grew, it did indeed take over. Zucker recalled having piles of work-related papers on her bed as she slept.

Twelve years ago, Zucker bought a two-bedroom apartment on the Upper East Side of Manhattan, with one of the bedrooms turned into an office to hold three people, including desks, filing cabinets and computers.

When Zucker has a big project, she expands temporarily into the living room; she recently had six people working there on a folding table.

Having the business in her apartment gives Zucker flexibility to work whenever she wants, a plus that appeals to many home-based entrepreneurs. But it also means she has to set some limits.

“We go away on most weekends — that way I can’t work,” she said of herself and her husband.

The primary reason why many new entrepreneurs work out of their homes is to save on overhead. There’s no office rent or utility bill to pay, so revenue can be used to keep expanding the business. A home-based business is also appealing to parents of school-age children.

Often, though, compromises or adjustments must be made.

Jeff Zbar, a writer in Coral Springs, Fla., has a business easily run out of his home. As he and his wife have moved from one house to another as their family grew, he always used one of the bedrooms as his office.

But, Zbar noted, some work cannot be done at home.

“By (zoning) code I cannot have client visits and I could not have nonresident employees,” said Zbar. When he needs to meet with a client or other business associate, it’s usually at a diner or the client’s office.

Zbar noted another option for the home-based entrepreneur whose house can’t accommodate all their activities — renting space by the hour or day from companies that provide support services to small businesses. Another alternative is the office of a friend, or perhaps your lawyer or accountant who’s willing to lend out an empty conference room.

A big benefit of a home-based company is the income tax deduction available to people who dedicate a room or larger part of the house to a business. An owner can deduct a percentage of mortgage, utilities and other expenses attributable to the home office.

Many owners follow a typical route of starting a company at home and moving to an office a few years later. But late last year, Angela Bendorf Jamison turned her marketing communications firm back into a home-based concern.

Jamison, owner of Communicopia in Wake Forest, N.C., moved the company from her home to an office in 2001 after taking on an employee. The worker stayed about two years and left, and by then the economy had taken a downturn.

“I still had my same clients, but they really weren’t doing quite as much with me, and I was as nervous as anyone else about what was going to happen,” Jamison said.

She decided to move the company back home after her office building was sold. In the meantime, Jamison and her husband had built a new house.

“I set it up so it would be conducive to having an office,” she said.

Jamison finds another plus of running the business at home: The time she could be spending commuting is used for work.

Wally Blume took the idea of including a home office in building plans even further — most of the bottom floor of his house is where he and his wife June operate Denali Flavors, a company with about $70 million in sales at the retail level.

The Blumes first began running a business in the late 1980s, when “we started in the basement with a card table and folding chair,” working as food brokers, Wally Blume said.

By the mid-1990s, they were in the flavors business, developing flavors — including the best selling ice cream Moose Tracks — and licensing them to dairies.

The business got too big for the Blume home, so in 1998, the couple built a house on a lake near Grand Rapids, Mich., designing it to hold the business as well as their family. It has office space, a conference room, mail room and kitchen for the eight people who work there.

And if the company gets even bigger? Blume is aware of — but not contemplating — the possibility that someday they might need commercial space.

“We are about at maximum,” Blume said. “I’m not absolutely opposed to moving to another location — but I just don’t see the need to do that.”

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