This article is a reprint of Wise Bread's contribution to OPEN Forum from American Express -- where small business owners can get advice from experts and share tips with each other.
For many business owners, starting the company from a home office is the easiest — if not the only — option. Assuming you already have a place to live, choosing to use a few square feet in your home as an office is rarely a problem. But you should check your local zoning laws before you decide that your spare bedroom is the only home your business will ever need.
Depending on where you live, the city or the county may set zoning laws. Where I live, the town is small enough that it doesn’t have much in the way of zoning laws, but the county I live in has zoning regulations so precise that I know if I can run a Christmas tree sale from my front yard (I can, but only if the proceeds go to a non-profit). Some zoning laws are written to prohibit all businesses from operating in a residential area, but it's more common that zoning prohibits certain aspects of running a business. It's also worthwhile to check the other legally binding agreements that impact your home. For example, a lease can add more limitations, as can a home owner's association.
Customers and Employees
One of the biggest concerns you may face stems from where you ask your customers and employees to meet with you. After all, you and your neighbors probably moved in with the expectation that they'd be living in a primarily residential area and zoning laws are written to make sure those expectations are met.
In order to avoid potential issues with your neighbors, consider these factors:
Many home-based businesses that are able to operate primarily online avoid the problem altogether by arranging client meetings offsite, at local coffee shops, or office centers, or coworking spaces.
Noise and Noxious Chemicals
You may also need to look at if what you’re selling may bother your neighbors. Dangerous chemicals and anything else that may put the people around you at risk are obviously off the table. So are less dangerous but more noxious items, like fertilizer. But there are other processes and products that may lead you into conflict with the zoning regulations, whether or not you're keeping everything entirely indoors and out of view.
The Appearance of Your Home
Many communities also regulate the appearance of residential structures. Certain neighborhoods, such as those that have been listed on historical registers, can have very strict regulations.
The Legal Consequences
If you and your business consistently run afoul of the local zoning regulations, expect to pay fines, or worse. While many businesses can operate out of a home without a problem, there can be issues: a friend of mine who ran her accounting business from her business wound up facing a fine from her city’s zoning agency right after she finished up tax season. One of her neighbors had complained about the number of visitors coming and going to her home office as clients dropped off and picked up tax materials.
If your local zoning regulations are unreasonably restrictive — for instance, only permitting home-based businesses that are essentially one person sitting quietly with a computer — don't be afraid to try and get them changed. The process may be as simple as applying for a change of zoning.
As your business grows — and that's probably your goal — make moving out into proper offices a priority. You can't simply keep taking over rooms in your house or your apartment for your expanding business. If more than half of your home is actually used for your business, you will almost certainly be running up against zoning regulations. Worse, you'll be holding back the growth of your business.
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