Home Office or Commercial Space?

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You could rent a "virtual office" that provides a business address, a receptionist, and a space to hold conferences with employees or meet with clients (see BusinessWeek.com, Summer, 2005, "The Virtual Office Gets Real") and (see BusinessWeek.com, 5/30/06, "The Library: The Next Best Thing to an MBA").

Some of these situations allow you to rent space part-time or even by the day. Outsourcing some business functions, such as hiring a fulfillment house to process orders and ship products for you, can move enough of your company offsite to allow you to continue working from home. The same benefit could be realized by allowing your employees to work from their homes, or renting storage or warehouse space, Edwards notes.

Putting on Shoes

"Sometimes staying at home means making a hard decision. What is more important to you—a larger business or the particular work style that only a home office can provide? A surprising number of people opt to limit their businesses to those that can be contained within the walls of their houses. Some people we've met have scaled their businesses back in order to return to a home office after moving out of their houses," Edwards says.

Still unsure? Robert M. Donnelly, an entrepreneurial consultant and author, lists these factors for you to consider:

"The cons: Adjustment from an informal dress and work mode to a more professional setting. Moving—no matter how small, it's always painful. You'll need time to search for the right space and time to adjust to the office and added concerns about being able to afford it," he says.

"There will be distractions from your business while all of this is going on, because no matter how small a commercial space is, there is still a lot of time-consuming planning associated with making the transition."

Going VirtualBut don't forget the pros, he says. "There's a sense of business progress and professionalism that comes from a commercial office. That's image-building for your business, and it can be motivation to take your business to the next level. It's great to have a place where you can have meetings with customers other than the diner or Starbucks (SBUX)."

Before you make a final decision, consider talking to other small-business owners who have made similar transitions, Lasher says. "Find out what challenges they've experienced and what they would have done differently."

You might also consider taking the interim step of leasing a virtual office space before you take the bigger leap to a commercial office. "It may be more expensive in the short term, but it will give you an opportunity to see how you like it and more importantly, time to adjust without the full burden of jumping right into your own space," Donnelly says.

The questions posed by this reader brought up several important issues for entrepreneurs. A follow-up column running later this week will be devoted to planning and executing such a move.

Karen E. Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.