Running a Business from Home – Pros, Cons, and Alternatives

Starting a business is often driven by the desire to pursue personal business ideas and work independently. Many Poles are entrepreneurial, as evidenced by the number of new companies – in 2024, an average of 30,000 new businesses are registered in Poland every month. One of the main requirements when registering a business with the Central Registration and Information on Economic Activity (CEIDG) is specifying the company’s headquarters address. For many entrepreneurs, especially beginners or those working remotely, the first thought is often to use their home address. But is it really a good idea to use your home for business purposes? Let’s explore the pros and cons of this option and discover alternative possibilities!

Can You Run a Business from Your Home or Apartment?

As mentioned, starting a business requires prior registration with the CEIDG, which involves providing a business address. Running a business from your own home is legally possible and generally does not require informing the housing association.

However, the situation changes if the entrepreneur plans to open a business like a medical practice or a hair salon in their home, which would involve adapting part of the apartment for business purposes and changing the usage conditions of the property. In such cases, obtaining permission from the housing association and notifying the local authority about the change in usage is necessary.

Running a Business in a Rented Apartment

To register a business in an apartment, the entrepreneur must have legal rights to the property, such as ownership, co-ownership, or a rental agreement. If using a rented apartment as a business headquarters, the owner’s permission is required. Failing to obtain this consent could result in the business being removed from the CEIDG and create problems with VAT registration.

Drawbacks of Running a Business from Home

While running a business from home might seem like the simplest option, there are several disadvantages:

Higher Property Taxes 

Registering a business at home may lead to higher property taxes, especially if a room is designated for business use. However, this cost can be deducted as a business expense.

Tax Audits

If your home is listed as the business headquarters, tax authorities can conduct audits there, which may be stressful for both the business owner and household members.

Utility Billing Issues

When using part of a home for business, it can be difficult to differentiate between personal and business expenses for utilities, rent, or telecommunications.

Lack of Professional Meeting Space

Homes often lack the formal office space needed for productive work or client meetings, necessitating extra expenses for renting professional spaces.

Public Address Exposure

Registering a business at a home address makes it public, which may lead to privacy concerns and unwanted marketing materials. Additionally, some clients may view home-based businesses as less credible.

Advantages of Running a Business from Home

Despite these challenges, many still choose to run their business from home due to two key benefits:

No Rental Costs

Operating a business from home eliminates the need to pay for office space, which can be a major expense for new entrepreneurs.

Saving Time on Commuting

Running a business from home also saves time that would otherwise be spent commuting to a separate office.

Home-Based Business vs. Virtual Office Alternatives

An alternative to both expensive office rentals and the challenges of running a business from home is using a virtual office. This modern service allows business owners to have a professional business address without needing to physically work there. Virtual offices often provide services like mail handling, document scanning, and phone reception.

Lower Costs

Virtual offices are a financially advantageous solution, as costs can often be deducted as business expenses, reducing income tax liabilities.

Work-Life Balance

Using a virtual office allows entrepreneurs to maintain a healthier balance between personal and professional life by offering access to professional coworking spaces or conference rooms when needed.

Privacy Protection

A virtual office also protects the entrepreneur’s privacy by avoiding the need to publicize their home address.

Conclusion

Choosing between running a business from home or a virtual office depends on the specific needs of the business. A virtual office offers flexibility, a prestigious address, and professional services that may provide an edge in building a credible business image.

Ewa Rogoż

Ewa Rogoż is an experienced coworking pioneer in Wrocław and the founder of IdeaPlace – the first professional coworking space in Lower Silesia. Her dedication to business development and support for entrepreneurs led to the creation of an inspiring space in the heart of the city. Ewa not only creates coworking spaces for freelancers but also micro-offices for small teams, thereby supporting diverse business initiatives in the region.