Home-based businesses

If your business allows, you may be able to work out of your home as so many people are doing today. A home-based business has many advantages. It is less expensive than a storefront, you can choose your own hours, it cuts out the commute, allows you to work around family needs, and you don't have to dress up. There are also some tax advantages.

On the other hand, these same advantages can become problems. You need a lot of self-discipline to work steady hours when the yardwork beckons. Family needs can impinge upon work and it may be hard to feel professional in your pajamas! Working at home can make some people feel isolated and unmotivated. A home environment may also interfere with your professional image.

After weighing the pros and cons you may choose to go ahead with a home business. Consider your own personality and needs and try to come up with a system that works for you. For example, you may need to get dressed up as if you were going out to work or give yourself rigid office hours in order to keep on track. Efficient time management is vital.

Before hanging out your shingle, make sure that a home business is permitted at your location. Some housing associations, lease agreements, or zoning restrictions may prohibit this option or have rules about signs, sales, deliveries, or other practices. Depending on the type of business, state or federal law may also limit what you can do in your home.

Starting a home business is very much like any other small business. You need to develop your business plan and carefully lay the groundwork. You also need to market your business, have a good recordkeeping system, and pay taxes.

However, there are a few considerations unique to home businesses. You may need to get a home occupation permit as well as the usual licenses and permits. Be sure to speak to your insurance agent about the new use of your home and make sure you have adequate coverage. You may need to establish an exclusive room or area of the house for your business. For tax purposes, if you claim your home office as a business expense, that part of your home must be used "exclusively and on a regular basis." It might be worth remodeling to provide a separate entrance if you plan to receive clients. (Check your local ordinances to ensure that you are permitted to have clients come to your home office.)

Other sites of interest:

FREE and low-cost assistance for small businesses is available from your local Small Business Development Center.

This document was prepared by the San Joaquin Delta College Small Business Development Center. Send comments to: Gillian Murphy

Acknowledgements, disclaimers, etc.

Written and designed by Laurie Litman of InfoWright
Created: June 5, 1996
Revised: Wednesday, January 3, 2001