Guidelines to Ensure your Home Business is Completely Legal
Ah, so you have done it and finally thrown open your doors to the general public! You are running your home business, and you are ready to take the economy by storm, and make money hand over fist. You have brilliant ideas when it comes to marketing and product placement, and you are not afraid to wait in lobbies and waiting rooms of businesses to see your product or service properly advertised. Of course, there are those times when you wake up in a call sweat and you wonder if there was a reason the homeowners’ association president was glaring at you the other day. Are you, perhaps, breaking some kind of law? Well, you could be.
Here are some guidelines to ensure that your home business is completely legal:
Did you know that some businesses require licensure from the state, city or county within which they are located? It is important that you find out if your particular home business needs to have a business license. For example, if you are planning to run a daycare out of your home, you will most likely need a daycare license, which will require a home inspection to ensure that your premises are suitable for that kind of business.
Do you have adequate insurance? Most homeowner policies will not cover business losses. For example, if you are running a nail salon out of your home and one of your clients get nicked on let big toe, then goes on to develop an infection, and finally requires hospitalization, you will be very likely to get the hospital bill, and it won’t be cheap. As a matter of fact, it might even raise your homeowner insurance because they may allege that you keep flammable materials on your property! So make sure you have the proper insurance for your business, clients, customers, and also supplies.
Do you require bonding? You often see the ads for notary publics and also maid services that ensure that the person coming to your home is bonded. This simply means that in case of a business mistake, or if you break something while in the home of someone else, you will be able to replace the item without seeing money come out of your own pocket.
Did you know that in your jurisdiction there might be some kinds of home businesses that are forbidden? Check with your city, but almost everywhere medical clinics, auto repair shops, and massage therapy business are not permitted to be run out of a home. Did you check with the Internal Revenue Service? Be sure to do so before claiming part of your home as a business exemption. The IRS has very strict rules about what constitutes a deductible home office and what does not.
Check with your homeowners’ association. Many of them forbid home businesses with the exception of child-daycare centers. They may fine you heavily, and also see you closed down in no time if you violate the terms of the bylaws. Also be sure to check with the homeowners’ association or neighborhood association when it comes to signage. You may also need to check with the city to see what size and kind of sign you are permitted to put up to alert potential customers and clients to the location of your home business.
Be prepared for visits from the health inspector. Depending on the kind of business you are running, you may suddenly find the health inspector on your doorstep. Similarly, if you work with financial records, you may suddenly find yourself audited to ensure that your records are meeting state requirements.
As you can see, there are quite a few rules and regulations with respect to home-based businesses. Do not despair and get frustrated but instead get informed. Knowledge is power and it will help you to not only open your business, but stay in business when others around you may be folding. If you are unsure what it takes to get started, go ahead and network; speak to other business owners about their first experiences with setting up a business, where to go for licenses, how much it costs, and what to expect. Usually they will be happy to give you the information you need.