Small businesses increasingly run from home, says report

The living room is the most popular spot in the house to work, while 13 per cent work from a garden office or garage

More than eight out of 10 of the UK’s smallest businesses - those with under 10 employees - now use their home as a workplace, according to research from Lloyds Bank Insurance.

Its Big Issues for Small Businesses report reveals that just over half of all microbusinesses are started from home.

More than three quarters of these homeworkers have made significant changes to their property to make it 'work ready' - the average cost of adapting homes for working life is £1,392, with the most popular change being a room-to-office conversion (carried out by 42 per cent).

The living room is the most popular spot in the house to work (41 per cent), closely followed by the dining room and kitchen, with 13 per cent working from a garden office or garage.

Damien McGarrigle, head of Business Insurance at Lloyds Bank Insurance, said: "With the help of technology, the way we live and work is evolving with more and more people choosing to combine home and work where possible."

Being able to work from home is the main driver for almost half of those who have taken this work path, while three quarters say they simply enjoy working from home and feel it provides greater flexibility. Two thirds also argue that it makes better financial sense, while 57 per cent say it actually improves productivity.

Indeed, the main drawback according to more than a third of those questioned is working more than they would like and a similar figure admit they miss the sociable atmosphere of a traditional office. Around 36 per cent also say that their homes are messier since they started working from home.

Other worries include somebody in the family deleting/losing a document (17 per cent), while 10 per cent admit damaging a work device by spilling a drink on it.

"When starting a business many people find that their home is a great place to use as it keeps their costs down," said David Martin, Director of SME Insurance at Allianz Insurance. "There are a range of issues a business owner should consider including health and safety assessments and the right insurance for their needs."

His top four tips are:

1. To comply with the Health and Safety Act, carry out a simple risk assessment including tasks  such as testing electrical items and childproofing office space

2. If you store business stock at home or buy equipment for your business, it is classed as a business asset and needs to be insured for damage and theft

3. If you have business visitors, consider public liability insurance to protect you from loss or damage for claims made by visitors to your home in connection with the business. 

4. All employers who have more than five employees must have liability insurance or face fines of up to £2,500 for each day they don’t have it - employee family members are still employees.

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