Starting a Home Business - Tax and Legal Issues
For many new businesses, having a business in your home seems to be a great money-saver and a convenience. Here are some things you need to consider if you want to set up a home-based business:
- Zoning
Check with your city or town to see what their zoning regulations and city ordinances are. You have a better chance of getting approval if you aren't going to have customers coming to your home, but a limited number of customers might be possible. It really depends on the individual city and their regulations. In some cases, the neighbors will have to approve the business.
- Lenders and Financing
You may be surprised to find that banks and other lenders are reluctant to lend money to home-based businesses. They may feel that you are not "serious" about your business. Preparing an excellent business plan and presenting the business as a long-term profitable endeavor will help you convince a bank to lend you money.
- Compliance Issues
Home-based businesses are not exempt from compliance issues. In particular, the provisions of the Americans with Disabilities Act (ADA) require you to make your business accessible to the public and include an appropriate number of parking spaces. If you have customers coming to your home and you are making substantial improvements to your home for your new business, you may find that these accommodations are too costly.
While having a home-based business is convenient and low-cost, you need to be sure you're complying with laws in the same way as larger businesses.
