Starting a Home Based Business

business plan

Currently, more than half of all small businesses in the United States are home based.1 Factors such as little to no overhead, flexible hours and the internet have contributed to the growing population of home based businesses. In fact, home based businesses signify 52% of all small firms and contribute 10% of the total receipts of the economy.2 However, despite all of the flexibility that home based businesses offer, there are still licensing requirements to be aware of at most local level jurisdictions.

Many local jurisdictions at both the city and county level have home based business licensing requirements. In addition to the requirement for licensure, there are limitations that home based businesses must abide by. One common example is that the person applying for the home based business license must be the owner of the home or property, or he or she must have written permission from the landlord of the property in order to apply for the license. Additionally, in most jurisdictions the outward appearance of the home or property should remain residential in nature with little to no signs that a business is located there. The trend appears to be that although home based businesses are permitted in many local jurisdictions with proper licensure, the licensees cannot dedicate more than a small portion of the home or property to the business – the residential nature of the property should greatly outweigh the business aspect of the property.

One example of a local jurisdiction that permits but restricts home based businesses is Charleston, South Carolina. Charleston allows most home based businesses to be licensed but does not permit home based business licensure of motor vehicle repair shops, tattoo shops, bed and breakfasts, kennels, physicians, or any occupation with business vehicles stored or parked at the residence among other restrictions. Additionally, the business area of the home or property is limited to no more than 33% of the existing residence and no more than 650 square feet of an enclosed accessory building.

Despite the restrictions some jurisdictions place on home based businesses, the internet has paved the way for thousands of people to be their own boss and pursue their own business ideas by creating a home based business. But it’s important to start your new home based business legally with all of the proper licenses and permits required at the city, county and possibly even state level. One unobvious yet considerable trigger for a home based business license is persons that operate from home occasionally using sites such as eBay or Amazon to sell products. In many instances, if you are selling enough to be considered “generating a profit” then you may be operating a business and doing so illegally.3  LicenseLogix will get your business properly licensed and keep you in compliance.  We are licensing experts in all industries and our streamlined process removes the headache of dealing with government authorities so that you can concentrate on the core elements of your business.  Request a FREE consultation.






Article by Kelly DiBattista - Research Analyst at LicenseLogix