Any advantage in moving to a office/warehouse?

There are a few advantages ....

The first is, your town may have zoning rules that preclude using your home as your business location.

Then, it's nice to be able to leave work at ... work. This is especially true once you grow a bit and have a few others working on your behalf.

A "real" office tends to make a positive impression on all you encounter. It's nice to have the room to set up a table just for reading prints, a bench for testing / repairing fixtures, etc. Most likely, you will want to park your truck inside at night.

The downside? Money. Make sure your rates are set to cover your operating costs. Utilities are going to be a shocker. You WILL want an alarm system.

On a side note, it sounds like you're about to make a big step .... why not stop by the chat room, and bounce your ideas off a few who've been there already?

Considering that it's that time of the year again...there's an advantage to not having to fiddle with that "home office" when calculating your taxes.
If the whole building is your place of business, life (and math) gets a whole lot easier.

One thing you can do to help the math on your home office is to separately meter the power. Places like Hialeah Meter will sell you a real utility meter, reconditioned and set at zero pretty cheap. I paid $16 for one when I set up my office. I needed more power anyway so I just ran a little sub panel through the meter. That way I had a real, verifiable number for what my office equipment and task lighting was using. The other thing is to avoid mixed use of the area. (spare bedroom etc). If you follow the rules and keep good records the IRS won't be able to screw with you.

Leasing would obviously add to overhead, but wouldn't you think that it could be made up in less gas and less trips to the supply house? We would actually be working in the area that we plan to lease. Picking up the van at the shop will give the guys time to stock the van each morning. Right now we have a storage unit to store material, no one has the time to go there and look to see if we have material that can be used. I go to the storage unit to drop off material and find 20 or 30 of everything, usually things we don't use that often! I think we would be bucks up if we all started at the shop in the morning and loaded the van with parts for the day, I think it will help with unecessary trips to the supply house and it will cut down on reduntancy of stock. What are your thoughts?

Having a 'real' office adds credibility to your operation. It's also a place to direct deliveries and applicants. Without an office, you risk appearing to be just another trunk slammer.

Many HOA's, and even some towns, have rules against parking commercial vehicles - even a simple pick-up truck - overnight in residential areas.

Many towns also have zoning laws that forbid operating a business out of your home. Here, we even had a book author get cited for violating the ordinance - and lose when he challenged it.

Finally, being able to pull your truck inside at night has several advantages. Not only is there the convenience of stocking / working on the truck indoors ... there is a real security bonus.

I built the house around the vans. Meaning I put in 9' foot high garage doors so I could pull 2 inside at night. I sleep better now. My office is at my house also.

Same for me...a 3 car garage with 9'doors & office in the house with 2 phone lines 2 desks, 2 PCs, etc. I can do a little paperwork at my convenience anytime. For residential service having trucks on the road shows you're in business more than a store IMO.

Dave

Just one intresting point, we just 2 of out local EC's retire, and talking to them the one thing they said was the best move they ever made was to buy a shop for the business, when they sold the business they had nice pay back on the investment, so now they can live out the retirement years less the worries of money.

One of the EC's bought a shop with 4 rental appartments, and the other EC bought 2 commercial office park buildings, they said it was easy to buy the commercial property with little money outlay, and the commercial buildings generated some fill in work at times.

We also have an EC that started buying small industrial buildings, today his company owns and operated over 20 major industrial parks

I finally built an electric shop for my business last December. I did it then because several positives lined up at the time.
2007 was a very high profit year for me and I could either give it to Uncle Sam or invest it in a building I needed.
My main supply house offered to set up to $30k of materials at my shop on consignment, meaning I only paid for what I drew from the on-site inventory at the end of the month.
Separate service/meter for my building as well as phone line, insurance and gas make it clearly deductible, no red flags.
I put in (2) 10 x 10 OH doors, one with a keypad entry so the supply house delivery guy can have access when I'm not there. Same for my UPS and Fedex guys. It has been great having all of the materials I need at my fingertips every day. Real handy during the ice storm here a few weeks ago. I was able to work all hours until the outages were over.
For 15 years I had an office in my garage and stored tools and some materials in my garage and in a barn. Not too handy. My building is 30x50x12 high. I have a 12x14 heated/cooled office and a 12x16 heated/cooled workshop inside the building. The rest is for the truck and cold storage of materials. It is about 100' from my house so it is close enough to be handy but far enough that my noise/activity doesn't bother the family.

I have a 2 car attached garage and a 3 car detached garage. I framed an 8x16 office in the detached garage and it was a lot better than trying to run the business out of the house. However, I don't have a bathroom in my office so when nature calls I must walk to the house.

Now I want a shop. I am tired of storing tools and materials in MY garage.

I just finished an industrial condo bldg. about 10 minutes from my house. The units measure 18x52 with an overhead door and single entry door. The units are roughed for bathrooms. The owner is selling them for 96K. I am considering purchasing one of them.

Now, 2 minutes from my house is another property that has around 1600 square feet. Again with an overhead door and an office and bathroom already built. But the owner is asking 145K. Another unit in the same building sold for 135K and it was an end unit that faced the street. I offered 120K and they countered with 137K. I said no thanks. It's still for sale. I would prefer to have the second property but it's around 42K more.

One thing to remember, if using you home as a office, you are depreciating your house.
When I first started I lived with my girlfriend (now wife) who owned a home. I rented a room for an office. Also payed some of utility bills. When we sold the house, we had to pay taxes on the years of me doing this. Big surprise. You depreciate your house when you use it for work/office and show IRS. I currently work out of my new house. Erected a building in the back for the shop. But I do not show Gov. any payment towards office or building for business. It depreciates the property. In my case it is worth it for me to just pay bills as homeowner.
I would suggest talking to your accountant!

Yes when you file for home office expenses, horns blow, lights blink, and every has a big laugh at lunch that day, as they flag your return, and put you on the watch list, aleays seek a professional CPA before going the home office or shop route,

That recaptured depreciation deal bites you when you do creative things like paying yourself rent (that you don't claim as income). If you just deduct a verifiable amount of the taxes, utilities and maintenance it is not depreciation and will not really bring undue scrutiny.

Greg,

I like that, "when you do creative things"

IRS in not lookingf for the church lady and her small office, they are looking for the creative people and the those churning big bucks, out of a home office

I would love to be able to do exactly that.... purchase my own building for my office and warehouse. But I live in Honolulu. So in order to buy a property that is zoned for business I just got to figure out how to cough up the one million needed for the down payment....

My wife owned a flower store many years ago before she decided "girl jobs suck". We "did creative things" with our taxes and when she sold the business for what we paid for it Uncle Sam came back at us and "recaptured" about $20,000 in depreciation. That is something to think about if you are depreciating a building that will eventually sell for a profit (or, like in our case, sell at exact cost).
When I asked the accountant, he said he expected us to lose money on the deal.

I'd be interested in hearing more about this set up.

Anyone bought or leased a commercial unit and built a small living space for themselves in it? (Zoning in my area allows an accessory dwelling unit.)

I'm just not sure if I can make the amount of space I can get (say 1000-1400sqft at $1/sqft/month) pay for itself. I'm just a one-man shop.

I've just been put in an interesting situation. My long-term business partner has announced his desire to retire this year. Until now, he has handled the 'business' side of things. So, I have to get the license in my name, take over the bookkeeping, chase after work, etc.

Work out of my home? Not likely. There just isn't the room. Plus, as I've discussed in my earlier replies, there are solid reasons to have work in a separate location.

We've been using a 10x20 storage locker as our workshop. I am considering renting a second one, and making it into an office. Here's how that idea looks so far:
- Cost of converting a locker into a decent office would be about $1200. This would be mainly to insulate, light, and make a proper "man door" in the front. All such would be reversible, and most materials recoverable, should I decide to move out.
- Operating costs would be $65/ mo for the space, $30/mo for the electric, and $40-90 for phone and cable access. All completely deductible as business expenses.
- The space is almost exactly the bare minimum in which you can place a desk, computer, file cabinet, and drawing table.

A visit to a local surplus yard found a pretty decent, complete, basic Steelcase desk for $50. A 'water cooler' base (takes those 5 gal jugs, has hot and cold taps) was $25. A vertical blueprint cabinet was $120. Other items likely to turn up there would include the coat rack, the storage cabinet, the microwave / coffee cart, a lateral file, a 'merchandiser' mini-fridge, the 'hutch' or 'riser' over the desk, and necessary chairs.
This leaves - as far as furnishings go - the drafting table and the computer desk. I can - and have - built a computer station for about $100; a web search shows several basic drafting tables for under #200 - accessories included. I'll probably also have to make some sort of "drop slot" for folks to leave things like keys and papers.

What do you do when you have to go to the bathroom?

Make sure there is a gas station near by. Make sure it sells doughnuts (good ones), since you there anyways.

I thought you knew ... construction types don't need toilets! Ask any GC ....

I guess that's what the bottom drawer of the file cabinet's for.

I figured you just had a portolet in the driveway

...or 5 gallon bucket for a chair. It save space and increases productivity. It a win win.