Do Home Based Businesses need a business license?

Licensing Requirements for Home Based Businesses

Starting a home-based business is a rewarding and flexible option for thousands of small business owners. However, starting up is not as simple as hanging an “Open for Business” sign on the front door. Understanding the required permits you’ll need to legally operate your business can save you from big head-aches (and big fines) down the road. Regulations vary based on industry and location, and while there is no one-size-fits-all permit checklist for home-based businesses, there are general guidelines home-based business owners should be aware of:

1. General Business Licenses
Most home-based businesses owners will be required to file an application for a general business permit from their city or county to legally operate in that area. County registrations may apply to you if your home-based business is outside the jurisdiction of a town/city.

2. Professional and Trade Licenses
Some industries may have to obtain professional/occupational licenses, such as a nursing certificate or a real estate license, at the state government level. You can contact your state’s business license office for a complete list of the occupations that require licensing in your area.

3. Home Occupation Permit
Many city and county zoning and planning agencies require all home-based businesses to get a Home Occupation Permit. If a permit is not required in your city, the zoning office should tell if your neighborhood is zoned for the business activity you plan to conduct from your home. If your area is not zoned for your type of business, you may need to file for an additional variance or conditional-use permit. Visit the Zoning Laws for Home Based Businesses page for more information about zoning laws for home-based businesses.

4. Sales Tax Permit

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Can you have a Business in your Home?

SBA – Home-Based Businesses

What do Apple Computer, Hershey’s, Mary Kay Cosmetics, and the Ford Motor Company have in common? These well-known corporations all started out as home-based businesses. In fact, more than half of all U.S. businesses are based out of an owner’s home.

Starting a home-based business has many rewards as well as challenges. This guide provides resources that will help you learn more about working out of your house, starting a home-based business and managing your business within the law.

Before You Begin

• Are you ready to start a business? In less than five minutes, the Small Business Start Up Assessment Tool will help you understand your readiness for starting a small business. Your responses will be scored automatically and an assessment profile will be provided after you click the Submit button. This is an automated self-assessment tool. SBA is not collecting information, tabulating or utilizing individual visitors’ results.

• Can you live and work in the same area? Find the answer by asking yourself the following questions: Where in the home will the business be located? What adjustments to living arrangements will be required? What will be the cost of changes? How will your family react? What will the neighbors think?

• Home-Based Business….Is it For Me? Is working from home right for you? Learn about several factors you should consider when starting a home-based business.

• Starting a Business in Your Home: Weighing the Pros and Cons. Have you thought about the characteristics and challenges that are most commonly involved in launching home-based businesses? View the pros and cons before you begin a home-based business.

Start a Home-Based Business

If you have decided you are ready to start a home-based business, then you might already have an idea and/or the products you want to market. If not, think about your background, what you are good at, and what experience you have. This exploration can get you on your way to coming up with a sound idea. For additional guidance on how to start your business, use the resources listed below.

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