If you are starting a
home-based business, you must consider any licenses and permits that are
required prior to starting your new venture.
The types of licenses and permits you will need depend upon the nature
of your chosen field or industry. You
may even have to obtain more than one permit or license to carry out your
planned business activities at home. Here
are some key licensing and permitting issues to address before establishing
your home-based business:
- Review your local zoning laws. Your interest in your new home-based business may not match up with
existing local zoning mandates. Most
localities enforce zoning laws that regulate what kind of activities can be
carried out in different sections of a town, city, or county. Research local zoning laws to see if you can
operate your planned business from your home and in your neighborhood. With a home-based business, your neighborhood
may be restricted solely to residential purposes or may not allow your type of home-based
business. For example, you may not be
able to operate a café in your home kitchen or fix cars out of your home garage. There may be other areas designated under
local zoning laws for these purposes that may be located outside of your
neighborhood. If local zoning laws do
not permit your type of home-based business, contact your local zoning
commission or board to determine if you might be able to obtain a zoning variance
or waiver that will allow you to legally operate your new home-centered
venture. Contact your local zoning board
or commission for more information about applicable zoning laws.
- Check your HOA, deed, or lease
restrictions. Aside from local zoning laws, your neighbors
may be worried that your home-based business may create added traffic and
noise, parking problems, unsightly signage, and distracting lighting that will
impair their ability to enjoy their own homes.
In many neighborhoods, your condo, co-operative, or homeowners’
association may have instituted additional deed covenants that limit or
prohibit home-based businesses.
Similarly, if you are renting property, your lease may include
restrictions on home-based businesses to protect the interests of other
tenants. Even if these limitations are
in place, explore whether or not you may apply for permission to run your
home-based business from your neighborhood association or rental agency.
- Seek proper permits for your commercial
sign. A commercial sign may help to direct your
customers or market your home-based business to the public. Prior to spending any money
on a sign, determine what permits and rules apply to commercial signs in your
neighborhood. In many communities, you
may need to apply for and obtain an applicable permit before posting a
commercial sign. This permit may also spell
out further limitations, such as the sign’s size, placement, wording, materials,
and lighting on your property. Get in
touch with your local zoning board or commission for rules and restrictions on
- Obtain a general business license. Regardless of the type of home-based business, most cities and
counties will require new businesses to obtain some form of general business
license. If you plan to sell goods or services from your home, this general
business license may be referred to as a reseller’s or tax certificate. This general business license permits an
entrepreneur to legally undertake commercial activities within the boundaries
of an existing town, city, or county. Seek
out your tax collector’s office for more information about business licenses
and tax certificates.
- Apply for relevant professional or
industry licenses. Some industries or professions will
require specific licenses to operate particular home-based businesses. You may need to demonstrate that you have
achieved certain educational degrees, training certificates or work credentials
in order to qualify for such licenses. These
additional licenses may be mandated to help protect the public from shoddy,
dangerous, or unprofessional conduct. For
example, if you plan to operate a day care center from your home, you will
likely have to be licensed before opening to ensure full compliance with
government regulations and industry standards. In addition, if your business may impact the natural
environment, you may need to obtain other permits to ensure compliance with
applicable environmental laws and regulations.
Depending upon your field, check out your state’s licensing agency or
industry organization for more details.
If you are interested in starting a home-based
business, visit the U.S. Small Business Administration’s site for
its assessment tools on whether a home business may be appropriate for you.