License to Ill

Just about all businesses, home-based or not, are subject to licensing and permit laws, which also vary tremendously by location. Permits and licenses are often required for taxation as well as data collection purposes. If you sell taxable physical products, you will need a permit to charge sales tax. If you keep an inventory of goods, your locality may charge an inventory tax. If you are running an in-home service business, such as a hair salon or a plumbing business, you will need the professional licenses required by those industries. And if your business involves federally regulated products like alcohol or firearms, you will need the appropriate legal paperwork for those items as well.

If you are running an illegal business like a numbers racket or pharmaceuticals of questionable origin, sorry, we can offer you no advice, but the zoning board may be the least of your worries.

If you are a telecommuter working for a parent company located elsewhere, or are a basic information worker like a writer, designer, or public relations agent, whose main avenue of commerce is the Internet, there are fewer restrictions and less paperwork is required. Again, we can only speak in very broad general terms here, but a good place to start is the SBAs “Permit Me” online tool that lets you enter your ZIP code and business type and determine what permits and licenses are required.

Once you have determined that it is legal to operate your business from your home, and you have all your paperwork in order, it’s time to actually go ahead and set up the office—which we will cover in future posts.

Sometimes it may be possible to work at home but have the actual business at another address. There are some office buildings that rent space by the hour or the day. Seeing clients? Use that kind of facility, and you might be able to use that address as your official business address, avoiding all kinds of issues down the road. (We’ll look at this option in a future post.)