In general, it is absolutely legal to run a business out of your home. Furthermore, when starting certain types of businesses, I highly recommend it!
There are some examples of great companies like Apple, Hewlett-Packard, and Facebook that were initially started out of the home (or, even more illustrative, the garage).
Sometimes, it IS illegal to have a home office:
- You rent, and your landlord prohibits it
- You own a condo, and your homeowners association prohibits it
In these cases, be sure to check the by-laws and agreements that you signed. Sometimes, only specific kinds of businesses are prohibited: Your homeowners association may not want you running a manure refinement business out of your condo, for example…
For the rest of you, starting your business in your home may be a great idea. Here are some big advantages:
- No additional rent/mortgage expense
- Some of your existing rent expense can be deducted on your taxes
- No commute
In some cases, it may not be a good idea:
- Your business has a lot of inventory – where will you store it?
- It requires a lot of physical equipment
- It is intrusive to your home in another way (like the manure example)
- You need to segregate work and home to work effectively
With today’s technology, though, there has not been a better time to start a business from the home. Here are some you could get started on today:
- Consulting firm
- Blog/content monetizing
- Amazon/drop-ship business
I quit my job to help you quit yours. The first step in doing that is to create a second stream of income, and—in my opinion—the best way to do that is to build a business.
Running your business out of your home, at least at the beginning, is a great way to minimize your expenses until you prove your business concept and want to invest more.
Your business can start with literally nothing more than your computer, phone, and a website. You probably already have the first two, so we’re talking $10 per month. If I was starting all over again, I would have made that investment from my “day-job” income much earlier.
I teach people how to create businesses that allow them to lead lives of more freedom, impact, and fun. Check out how to do that here!