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Home-Based Business: Overview
For many people, starting a business based in the home is the ideal small business startup opportunity, and thanks to modern technology it has never been easier for home-based businesses to stay in touch with customers, consultants, and anyone else crucial to day-to-day operations and business success.
Home-based businesses offer certain freedoms and economic benefits to the small business owner, but there are a number of legal issues that should be kept in mind before starting a business from your home.
Property Use and Zoning
Although some city or county zoning laws specifically prohibit operation of a business from a home or residence, many localities do allow their citizens to operate businesses out of their homes, with certain limitations (such as signage and number of employees). In some cities or counties you may be in violation of local zoning laws if the extent of your home-based business operations is such that the "primary use" of your home can no longer be considered "residential." Before starting a home-based business, be sure to contact your city or county's planning or zoning department/commission to make sure you are in compliance with all local zoning laws.
Learn more: Zoning Rules for Home-Based Businesses.
If you live in an apartment, condominium, or co-operative housing, your opportunity to operate a business out of your home may be more limited. Leases, condominium use restrictions, and other private housing agreements may explicitly prohibit you from running any kind of business in your home. Before starting a home-based business, speak with your landlord, condominium association, or other private housing authority to learn whether you may operate a business based in your home.
Home-Based Business Insurance
Contrary to popular belief, homeowners' insurance policies do not generally cover home-based business losses. Some commonly needed types of insurance coverage for home-based businesses include:
- Business property
- Professional liability
- Personal and advertising injury
- Loss of business data
- Crime and theft
- Disability
Learn more: .
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