Follow zoning rules

  • Learn whether your jurisdiction allows home businesses
  • Comply with restrictions
  • Be a good neighbor
  • Check with your insurance agent

A man and a woman looking at blueprints for an office building.You may have a wonderful idea for starting a business in your home. First, however, check with the local zoning board or building use agency. Your business needs to comply with local regulations, or you could face financial penalties.  Local agencies could even close your business.

  • Learn whether your local government permits home businesses in residential areas. Search your city’s or county’s online sites for the appropriate agency’s regulations.   Some local governments provide this information on the Web.  Or, look in your telephone directory’s “blue pages,” or government section, for the appropriate agency. Check headings such as “buildings,” “permits,” or “zoning.”

  • Even if the local authority permits home-based businesses, expect a variety of restrictions.  For example, some local governments restrict the percentage of your residence you can use for business, the number of nonresidential employees per household, and the size and type of outside signs.  Some forbid retail outlets in private homes, require owners to provide off-street parking, and require that personal services – such as beauty treatments – be offered only by appointment. These requirements can change depending on the size of the property and whether it’s located in an urban or rural zone.

  • Be a good neighbor. If nearby residents file complaints, the regulators might fine or close your business. For instance, avoid choosing a business that draws numerous unfamiliar visitors to your home because they might make your neighbors uneasy. Try to schedule one visit at a time and ask your callers not to block your neighbors’ driveways when parking.

  • Noisy or odorous enterprises – for example, woodworking or candy making – trigger many complaints.  Be sensitive to the neighbors by putting soundproofing in your garage, or not working at night, for example.

Be sure to check with your insurance agent. Standard homeowner’s insurance policies are not designed for home-based businesses and provide very limited coverage for business property. For example, the standard homeowner’s policy excludes all coverage on a detached garage used in whole or in part for business activities.