You know the creation myth: a small business starts in a garage and soon it’s time to move into a series of bigger and bigger offices. The garage on the house pictured above is perhaps the best known in this genre: it’s where Apple started (at least, according to the creation myth).

Sure, there are companies that never move into conventional work space. Recently, we took an inside look at what it’s like to work at a company, Automattic, with over 250 employees who all work from home. For small businesses and the self-employed, it’s not unusual to work outside of a conventional business setting; perhaps in a home-office, your version of Steve Jobs’ garage or even (our personal favorite) a public library. It’s not unusual at all: More than 3 million workers now opt to telecommute instead of cramming themselves into cubicles.

Some small business owners and workers embrace the concept of the no-office business. It works for them. And for some, it’s even a motivating factor for becoming an independent contractor or starting ones own business. Yet, for most small businesses that grow beyond a few employees, there comes a time when you start asking yourself, “Isn’t it time for an office?”

Here are a few ways to know when it might be time to move out of the garage and into a more traditional business setting, be it an office, factory or other form of conventional commercial space:

Business becomes too much like home

Children screaming, dogs barking, errant undergarments: You get the picture. There’s a point where working from home can become too much like living at home. And that can hamper productivity. When your business starts being affected by your family, or vice versa, it’s time to start considering running it elsewhere. Offices can help maintain work/life boundaries.

A space to meet with clients, customers

Holding meetings at coffee shops or restaurants can only last so long. (And they can bite into the profit potential of small business restaurant owners, also.) There’s a point at which, in most fields, you need to be able to say, “We need to meet where we can whiteboard a few issues.” At some point, a company must demonstrate to its customers or clients that they’re dealing with a company, not an individual pretending to be a team.

You need more employees

One of the reasons a company hires another company to provide it services, rather than hire an individual freelancer or another employee, is the need to know there are redundancies and complementary skills necessary  to fulfill a need. Teams of people have work flow processes that add more efficiency to a service, as well. While you can cobble together a network of free lancers, the team necessary to manage and support such a team will require the growth of a management staff. At the point where your business is requiring you to spend time thinking about the staff you need to fulfill the actual orders coming in, you’ll know it’s time to strongly consider a traditional business setting.

HP Garage

Photos: HP Garage & Historic Marker, where Hewlett Packard — and Silicon Valley — was started in 1939. Photo by BrokenSphere. Licensed under CC BY-SA 3.0 via Wikimedia Commons.

Zoning or codes issues

We hear often of businesses that start out doing something easily operated out of a garage, home kitchen or basement. Maker businesses like woodworking, or perhaps an eBay-enabled concept provide launchpads that soon become multi-employee operations. At some point in this evolution, the business owner discovers that city laws exist to separate commercial operations from residential communities. The bigger you grow, the more difficult it will be to conceal your off-the-grid operation, especially when the UPS or catering trucks show up several times a day.

To establish efficient processes and workflows

There are exceptions to every rule: Automattic seems to have mastered the distributed workforce. And we are aware of companies that are efficiently run by 4-5 staffers in offices (or one, in a restored barn) that is adjacent to the owner’s home. But offices have a way of making a staff think they are part of something permanent, efficient and possessing a personality that can be seen and felt in their shared space. Humans are tribal, by nature. While working along is fine for some, the day comes for most growing small businesses when it’s easy to know that it’s time for an office.

To create a company culture

An office space can serve as part of a company’s brand and story. The company that created and hosts SmallBusiness.com was started in a building that had previously been a car wash. Today, it is in a downtown office that is open and filled with light and designed to encourage interaction among employees and clients we serve, be they in the office or virtual. It projects to those who come into our space that we are the type of business that can help them meet the marketing needs they may have…and enjoy the process. .

(Illustration by SmallBusiness.com from Google Maps Street View image.)