Moving back in with your parents may feel like taking a step backwards, but for some entrepreneurs, it's a great way to get ahead.

A significant number of small business owners are cutting back on costs by living at home during the early days of their startups, and many seem happy to do it. While the need to minimize expenses in a post-recession environment should come as no surprise, entrepreneurs are riding a broader trend. 

More people in the U.S. are living with their parents today compared to before the economic crisis, particularly those in their 20s and 30s, according to the Pew Research Center. The percentage of Americans between the ages of 25 and 34 who live in multi-generational households rose from 18 percent in 2006 to 24 percent in 2012, Pew reports.

Sophia Bera, 30, quit her job at a Minneapolis-based financial advisory firm last year to go into business as an independent financial advisor, focusing on clients in their 20s and 30s. After she started her company, Gen Y Planning, Bera and her husband moved in with her husband's parents. They rented one floor of her in-laws' house for $700 a month, which helped Bera reach profitability in just six months.

"I realized you can create a lot of client relationships over the phone and by email, and you can sustain that," she says.

After a short stint with the in-laws, Bera negotiated an even lower cost solution by moving in with her parents, this time, rent-free. 

The benefits of living at home go far beyond the financials, however. Bera receives encouragement and support for her business from her parents, particularly her father. "He always wants to try to refer me clients, which is very sweet, but I'm like, 'Just have them go to my website and sign up for a scheduled call online and we'll see if it's a good fit, dad.'"

The most significant challenge for Bera is finding a workspace every day in a small house. To ensure that she can take calls with clients, she goes over her schedule for the next day every night with her parents.

"I'll say, 'I have a shift in the morning that I need to be online for to chat with people from 8:00 to 11:00, so I'll be in the living room.'" 

When scheduling conflicts arise, Bera can sometimes take her work outside.

"I try to do some walking meetings," she says. "I'll put my earbuds in and just grab my phone and do a walking meeting if I don't need to be in front of my computer."

While moving back in with one's parents might sound like an undesirable living situation, Bera is quick to point out that startup founders are likely to use it as only a short-term solution.

"True entrepreneurs are really in it for the long haul, and so [they'll say] 'How do I keep my expenses low in the beginning so that I can build a business that is sustainable and supports the lifestyle that I want to live?' That was really my goal," she says.

Parental perks

Toronto-based Kena Paranjape, 38, moved back in with her parents last year after co-founding Brika, an e-commerce artisan business akin to Etsy, in late 2012. Brika uses a 50-50 revenue share with its artisans and is on track to reach more than $1 million in sales in 2014. 

Paranjape, who left a six-figure salary in retail merchandising before launching the business with friend Jen Lee Koss, says one of the challenges that come with living at home is having to keep her mother informed of her constantly changing schedule.

"She likes to know what's happening and what's going on, and as an entrepreneur your life is like the opposite of that," she says. "That was the biggest conflict. Now, when I'm running around from one thing to the next, I remember to send her a text message [saying] I won't be home for dinner, and I remember to do it not at 6:30 p.m."

For Paranjape, knowing what the points of contention are for her parents, and addressing them, goes a long way.

"Once you iron out the kinks of your parents realizing you've actually grown up from the time that you first left home, you get to have an adult relationship [with them] and it can actually be a really supportive, great thing," she says. "That's not to say I'm not ready to move out at a moment's notice."

One of the biggest perks of living with parents include coming home to a house that is maintained and a hot meal at the end of the day, Paranjape says. "As an entrepreneur you need to be so singularly focused on what you're doing and [living at home] really allows you to do that." 

Perhaps unsurprisingly, the benefits of living with one's parents don't always come across as a worthwhile trade off when Paranjape explains her living situation to friends or new acquaintances. 

"There are people who say, 'Oh I can't believe you're doing that,'" she says. "When you're an entrepreneur, you have to not listen to those people. I don't care about keeping up with the Joneses. I care about doing what I want to do." 

A guest in your own house

Yuri Cataldo, 34, moved back in with his parents in Mishawaka, Indiana in 2010 after going through a divorce and losing his job in film and theater production in New York.

He credits his parents not only for supporting him through a rough patch in his life, but also for encouraging him to start his bottled water company IndigoH20, which sells purified alkaline mineral water in blue glass bottles.

For Cataldo, living at home is especially convenient, as his business sources the water from a glacier-fed aquifer that runs under his parents' land. 

"Everything about my business is basically self-contained on my parents' property," he says. "It's not like I'm turning on the water in my house and giving it to somebody, but that's what the running joke is."

Cataldo sells primarily online, but also in Whole Foods stores in Indiana, and says that none of his company's success would have been possible were he not able to live at home. "I definitely wouldn't have been able to even start the idea without having lived with my parents."

Still, moving back home has also presented Cataldo with a unique set of challenges for running his business, such as having to work in a noisy house that his parents are renovating.

"My dad's got an air compressor running and I'm trying to read emails," he says. "Even though my parents are very loving, I still feel like a guest because it's not my house. I can't say, 'No guys, I need you to be quiet right now.'"

Perhaps the most unique challenge Cataldo has faced since moving home is getting locked out of his house late at night after his parents fall asleep.

"I definitely have on multiple occasions," he says, adding that it's really only minor issues that he has to complain about. "I get to complain that it's not so quiet in the house because the bigger things are already taken care of," he says.

Though the concept of business owners living with their parents might sound counterintuitive, Cataldo says he's not surprised that entrepreneurs are living at home to help save money.

"I've personally known a lot of people who've had to move back in with their parents for financial reasons," he says. "My goal is to move out by the summer of 2015."

While the percentage of the population living in multi-generational households remains a minority, slow economic growth combined with high unemployment could lead to a continuation of the trend.

Who's to say the founder of the next massively disruptive tech startup won't incubate his or her company while living with parents? 

"It definitely depends on your family, but my family is so supportive," says Paranjape. "They believe in what I'm doing and they believe I'm going to make it a success, so that's a great thing."

Published on: Aug 27, 2014