Home business owners roll out of bed in the morning and head off for work--still wearing their pajamas. They work from their dining room tables, move inventory in their cupboards and arrange meetings in the lobbies of their local hotels. They set their own schedules, jog on the beach during their lunch breaks and some even give out their house keys to employees across the city.



This is what life is like for Andrew Aussie, co-founder of Honest Foods, a natural foods company; Stacey Roney, founder of Beauty on Call, a staffing agency for the beauty industry; and Meg McAllister and Darcie Rowan, co-founders of McAllister Communications, a PR firm. Using their homes as their corporate headquarters, these entrepreneurs, along with more and more others, are running successful businesses without have to walk out their front doors.

A February 2004 study by the Independent Insurance Agents & Brokers indicates that approximately one in 10 U.S. households operate some type of full- or part-time home based business. And these businesses are more than holding their own. A May 2006 study released by the SBA's Office of Advocacy reveals that America's home based sole proprietors generate $102 billion in annual revenue.

As it grows in popularity and profits, home based business is being perceived in a much more favorable and acceptable light. According to Beverley Williams, a home business advocate for the past two decades, running a business from home was once frowned upon or dismissed as a hobby for moms seeking extra money. Now, home based business is widely accepted and is attracting both men and women.

Aussie, Roney, McAllister and Rowan learned from experience, learn operating technique from those who have successful done what they're trying to do and have mastered the discipline. Here, these successful entrepreneurs open up about the ins and outs of running a business from home, including how to ward off loneliness, set up shop, deal with zoning laws and insurance issues, bring employees into the home and project a professional image.

How They Made the Transition

Deciding that the quality and taste of their product or service was more important than the luxury of their workspace, Aussie, 39, and Mark Oliver, 58, decided to launch Honest Foods in April 2006 from Aussie's Del Mar, California, home. This made it possible for him to invest the majority of their startup capital into two years of research and development.

This distinct work environment change, a major adjustment for Aussie, was much different from the highly social office environment to which he was accustomed.

For 11 years, Aussie had worked in sales and marketing for Kashi Co., where he managed a team of 12 people and was surrounded by 60 to 70 coworkers. During the transition, Aussie had to figure out how to stimulation social interaction from his home office.

He relies more than ever on phone and e-mail to stay connected with customers and industry mentors, regularly arranges in-person meetings with vendors and suppliers at his home or a local restaurant or coffeehouse, and has even thrown parties for his previous coworkers. "I thrive on camaraderie and social interaction, so it has been key to realize that it's now my responsibility to set that up," says Aussie. "I set up a lot of lunches and gatherings that maybe I wouldn't have set up before as a way to bring some more social interaction to my daily experience."

Coping with loneliness is one of the top challenges facing home based entrepreneurs, according to Williams and Paul Edwards, author of numerous books on the topic, and co-author of The Entrepreneurial Parent: How to Earn Your Living and Still Enjoy Your Family, Your Work and Your Life. Williams recommends seeking out the advice from the local chamber of commerce or other small-business groups. These can offer good support networks as well as serve as invaluable resources of information.

Aussie also has learned that when working from a virtual home office, over-communication is required to keep everyone on the same page. Information, which is so effortlessly transmitted in an office setting through impromptu meetings or nonverbal communication, isn't always transmitted as intended among Honest Foods' independent contractors who work almost exclusively from their homes. "It means following up in writing, following up with voice mail, sending another e-mail, sending out reminders, doing all those weekly meetings," says Aussie. "These may have seemed superfluous in the office setting but are absolutely critical in a home office."

Another transition you'll have to make is equipping your home office, rather than depending on your IT guy to make all the network office solutions. Scrimping and saving is good, but even a home office needs a minimum investment in terms of equipment. As tempting as it may be, Edwards believes you should resist the urge to go all-cellular or depending just on Skype and instead recommends equipping the home with at least one landline.

Aussie began his home office by recycling his father's office equipment and furnishing his office with hand-me-down furniture. Yet he made sure his copier was high speed, his phone had a speaker on it and his computer was top quality. Says Aussie, "People may underestimate the need to make that kind of investment in your home office."

Setting Up

Honest Foods is flourishing with year-end sales projected to reach $1 million and product already on the shelves of major natural food retailers, including Whole Foods Market and Wild Oats Markets. This success may be due in part to the physical setup of Aussie's office. He runs the business from a separate room in the house dedicated as his office space to keep his work life separate from his family life.

It may seem insignificant, but separating family life both spatially and time-wise is crucial, according to Edwards, who recommends using a screen or a divider if a separate room can't be spared.

Other key questions you should consider before choosing where to set up office: Does it interfere with the family foot traffic, and does it offer the solitude needed to work? A little planning beforehand could greatly increase the productivity of the business.

Aussie has learned he works best by shutting everything down and closing the door to his office at a set time each day. Work schedules will differ according to the preferences of the entrepreneur, but no matter what your preferences are, Edwards strongly recommends setting goals for each day, so the business continues to move forward despite the hundreds of daily distractions.