I usually find working from home more productive if i go through the "getting ready" ritual. It still beats the commute.

Another thing I will add is if you work for yourself and and are just starting out put together a set of short term goals. It adds to the accomplishments once you've reached them. Rather than just completing some work put it on a list and watch the items get crossed off. Great for giving yourself an at-a-boy when no one else is there to give one.

I'm speaking as a person who has managed to switch from agency to freelancing over an year ago: my feeling is that I definitely enjoy my business, but still have a lot to learn.

Following the post structure point-by-point, here are some thoughts:

1. Financial Concerns
You'll have to deal with the whole chartered accountant thing (you know: IDs, taxation and fiscal placement, etc). This IS costly itself and can be a pain in the ass, at least here in Italy.
Don't look over this part, do allocate time and budget for adequate covering of this side if you're about to start a seo business in a virtual office (read: your home).

2. Opportunity Cost
Agree with everything but the pants part ;)

3. Less Meetings
You save (a lot of) time from here, but you waste (a small portion of) it in communication worries. With emails, phones and online conferences, everything requires additional time, that is saved everytime you speak to people personally.

4. Virtual Office Employees Can Work Longer Hours
True, many tend to workaholism... yet the time is the most important resource to manage wisely.

5. Employees Really Like It
I agree every single word! And could write sooo longer about it :)

Downsides?
Yes: in an office team, there are so many opportunities for ideas, corrections and insider news to spread. With distance, you just happen to lose all of that daily, leaving only a bit of it to go in personal meetings and/or online chats.
This is professional growth potential that is leaved on the table.
Distraction may be an issue, but I can call myself safe enough from them: only the phone and the doorbell can distract me phisically, but if you live with other people, you'll have to deal with them.

Hope this helps, please share your considerations.

P.s. Aaron,
I find your views on practical business aspect very interesting, and I'd love to read more from your blog ;)

Best,
Maurizio

As someone who recently switched from working at an ad agency with a tech division to owning my own company I have to say the advantages can be huge if you are able to start at home.

A few extra tips/items I've benefited from or struggled with:

-Working at home has allowed for write-offs (internet, phone, equipment, etc.). This is stuff that can add up fast and get you some some extra tax break cash on items you were paying anyway.

-Extra capital can be invested wisely - such as in an seobook membership instead of going to pay rent:).

-Time savings - of course this is huge, and mostly because of the quality of life increase. I can put in my 50-60 (if absolutely necessary) hours a week here without it really changing how much time I get to spend with family!

-Savings on gas, car insurance, repairs, etc. When life becomes home focused, you utilize the daily things less and often will find yourself saving some cash.

-My ability to work effectively and efficiently has greatly increased. Instead of being in meetings I didn't need to be in, being occupied and told information I didn't need, etc., I can strictly plan and control my schedule so that time is used efficiently. I can usually accomplish in 5 hours what would have taken me 8 hours in the office. This often equals more free-time/research time that makes for a more efficient employee.

-Social contact is minimal - this is the biggest downside I've come across so far. Some solutions include:
-Rent a very basic office space shared with other entrepreneurs - not only do you get to help each other but you get interaction and often very cheap (100/month or so) rent (at least where I'm from).
-Get connected at community colleges or universities. Often you can teach or take community classes that will get you involved with others starting businesses or who even may be in your specific field.
-Find time to get involved in community events you may have normally missed. I can now play in the pick-up basketball/soccer games at my gym that I normally had to miss because they took place in the middle of the day - great for bolstering interaction and getting good energy midday!

Finally, I've noticed I'm generally healthier overall as my own boss/a home employee. I can be more careful with my energy, rest when needed (often even if midday), eat healthier, exercise, spend more time with family, enjoy life more, etc. The overall health benefits can be huge.

I've worked from home for over 5 years now (website developer).

Positives :

- earnings have tripled to what I was on when I was an office worker.
- enjoy my work a lot more, no boss demanding I do THIS or THAT now when I'm not in the mood
- no regimented hours
- far more productive
- can implement ideas very quickly and can experiment much more
- can work ANYWHERE with an internet connection. Have worked all over the world with my Skype phone.
- no wasted time on a commute
- if I'm tired, I can rest. If I'm in the mood to work, I can work. It means when I work, I'm always in the mood to work.
- low costs
- time to exercise
- no office politics/competition

Negatives:-
- I can't think of a single one (personally). The social aspect is irrelevant to me. In fact, I prefer a quiet working environment for concentration. I don't want to hear gossip while I'm coding. I can still meet friends and have more time with the family.

This is just me though, if you're not feeling "into it" when working from home after a month or so, it's probably not for you.

A physical office space/location can also help potential employees feel like they're getting themselves into a quality organization. I think especially for the younger/hungry workers who want to learn and end up thriving off a little advice from the older, seasoned employees.

One thing I've found that you can do for the mailing address is simple, and sometimes less expensive than renting a forwarding address.

Get a PO box and make it look like a read address.

Each US Post Office has its own physical mailing address. Let's say that you research and find that the mailing address for the local Post Office is 1313 Mockingbird Lane. Let's say you get a PO Box at that office that is PO Box 1234.

You can (usually) set up your mailing address as:

1313 Mockingbird Lane, #1234
City, State ZIP

or sometimes it might even work as:

1310 Mockingbird Lane, Suite # 1234
City, State ZIP

Great comments all. Thanks very much for sharing :)

Looks like our experiences are common....

Aaron you're describing my life! I've bootstrapped Full Monty Marketing from pennies to the dimes its making now lol.

SEO for yourself has advantages and disadvantages. As you mentioned, my morning commute is down the hall, saving me time and allowing me to work longer hours without feeling trapped in a cubicle. However, on the same token I live in San Diego and its difficult to ignore the beach, town, dog, wife's scheduled plans, etc. Since those things do tend to conflict my work schedule, I can toss them in and work till 4am if I need to. Analytics refreshes at midnight, and I will be damned if I miss my clients traffic reports.

Now the social interaction is an interesting point. Yes, there is no witty office banter, however there is also no office drama and my boss doesn't care that I show up for work 30 minutes late. Of course, my schedule can be freed up at any time to do whatever needs to be done, so why couldn't that time be used for meeting up with a friend for lunch? Sounds social enough to me.

Physical offices are nice to have for meetings. There are numerous agencies that rent office space on a per meeting basis if you want to look like a big shot. I prefer to let people know that Full Monty is a boutique firm, dedicated to its clients - but that's my thing.

If you're looking to work from home, the local UPS store will set you up with a mailbox which you can title like:

XYZ Marketing
1234 Myer Place
Suite 112
Anytown AK 0000000

Take care Aaron, I read this ish daily!

One thing I'm glad to be away from office life is the human relationship stress, the politics, the pecking orders, the passive aggression. If you work in an office where everyone gets on fine, you're lucky. In my experience envy, hate, boredom etc lead to conflicts, normally delivered in a passive aggressive manner (so everything LOOKS OK to the outsider, but it's far from OK to the people involved). I've worked in some great offices, but also many ones that just suffered from this type of behaviour.

And did you notice? I didn't even mention actual work stress. That's just people stress. My work is quite technical and the last thing I need is this kind of drama.

I started my seo firm from home january this year and after a few months I started renting an office. So I can describe the consequences it had on me.

Working at home:
- I wasn't able to distinguish work from non-work very well. During working hours it's easy to check private mail, make a sandwich or turn on the dishwasher. After working hours it's difficult to keep your mind of work.
- Not many daily social contacts

Now I have my own office where we work with 4 guys and during working hours it's way easier to keep the goal in mind. After work it's way easier to simply enjoy the off-work hours. Also since I'm in a building with more companies there is lots of social contact.

However it comes at a price... a monthly payment.

In my opinion if you take your business serious, it's better to not work from home.
But thats just what works for me.

I worked for several years from home and enjoyed it quite a bit. However, I did find it unsettling when I found myself in my bathrobe at 2:00 pm. As enjoyable as that sounds, after the 10th time, you feel like a slouch.

I started to set up breakfast meetings as a way to get my day going early and it worked well.

So ... that's something to consider -- if you're working from home, you might try to set up breakfast meetings to get your day off to a roaring start.

-- Jamie Turner

There are some excellent comments to an already great post.

One trick I found has worked really well for me is to keep my morning routine as if I worked outside the home. I'm able to achieve this by getting ready and driving my kids to school. They get to school on time and I walk in the door to my office before the start of the traditional work day.

Summer's throw a bit of a wrench into this well oiled plan, but now that school is back in it will work like a charm.

Thanks again for an excellent post and comments.

Peter

Please explain the value of putting on pants on the way to work.. :)

There are pros and cons from the home to office environment but we've seen MUCH more business since moving into our office. Clients fly in to meet with us and they want to get to know our staff. I think this only makes sense when your trying to close fairly large deals...

We're gonna hire a virtual office from REGUS company. I believe this is the best option for SEO business. With virtual office, you both have a strong company stand and flexible work.
SEOBORG

I recently got an office space after about 8 years of working from home. I never really wanted to pay for space.

However, I got creative and negotiated a trade with the owner of the building. I think it helped that we both were into windsurfing, but hey – being sociable & nice can pay off.

So far so good :)

I've been working from home for the past two years and I won't change it unless it is really needed. I've been working for an Online Marketing Agency based in the UK even though I live in Spain.

In two years we never had any problems and all the meetings are done via Skype and as mentioned in the post, these meetings are objective and no time is wasted.

I do miss a bit of the social interaction but for that I have the gym and the weekends. :)

I've worked from home for 13 years now. The first couple felt really strange. Then, you get used to it and you find that you spread your work to all kinds of hours. THis is great because presumably, this is when you want to do it.

You can do TONS of work with a laptop, in the living room, watching a day full of football.It's great! Can't go back now.

Rob for Atlanta Real Estate

Working from home has been fantastic for me on almost every front. There are only a couple of challenges:

1. You have to be the self-motivated personality, and even then, you have to actively do things to minimize distraction
2. You have to take ownership of your continuing education. I totally agree with Petro who said

"in an office team, there are so many opportunities for ideas, corrections and insider news to spread. With distance, you just happen to lose all of that daily, leaving only a bit of it to go in personal meetings and/or online chats.
This is professional growth potential that is leaved on the table."

3. One of the biggest concerns I had that has turned out to be a non-issue is that my customers would be wary of someone who works from home. I totally agree with what was said: "I've also found that big clients don't go to small suppliers anyway. They demand you to come to them!"