Starting a home business comes with both benefits and pitfalls. Before launching a home-based business, consider how these factors will affect your business plans and your home life.
When you choose to start a home business, you’ll enjoy several distinct advantages, such as the following:
Starting a small business isn’t always something you can do from home. There are several obstacles you may run into, such as the following:
You’ll also have to consider zoning laws. While the specific laws vary from area to area, most properties zoned as residences prohibit you from changing your home’s appearance to suit your business, which means you can't post signs outside. You also won’t be allowed to store hazardous materials.
If you’re a member of a homeowner’s association, you should also go over the HOA’s rules to make sure your business won’t violate them.
Just like any other business, your home business will require a license and proper registration. Registering your business as a formal entity like an LLC is often a wise choice. This will protect your personal assets in case the business fails.
Alternatively, you could start a home-based franchise. Before you do that, however, conduct a thorough investigation. Many work-from-home franchises that seem good on the surface are nothing more than scams.
Also, bear in mind that federal programs do not give financing for home businesses, so you’ll have to take another route to secure funding. You could seek out investors, or try to get a loan through a local bank or credit union. A thorough business plan will help you impress lenders and get the startup money you need.
In short, home businesses often come with both benefits and drawbacks, so weigh all the factors carefully before you give the green light to your new business.