Is Your Home-Based Business Legal?

The bus screeched to a halt. My friend and I, young high school students at the time, were on our way home from the first day of a new school year and had just arrived at our stop.

At that time there was no direct bus route from our school to our neighborhood. The only alternative was to take three buses whose overall route mimicked a three-sided square. Needless to say, having arrived at our final destination, we were in a giddy mood and ready to get off the bus.

So we leapt from our seats and ran towards the front exit and onto the steps, only to be met with a closed door. “Huh?” I mumbled as I knocked on the door so the driver would open it for us. But we surely were not ready for his response. And I remember it to this day, some forty years later.

In a Darth Vader-like guttural voice, emotionless, and way too drawn out, came just two words: “Zooooone Faaaaare.” And that’s when time froze. Because, unfortunately, neither my friend nor I had saved enough money that day to cover this up-till-then unknown fee.

While this long ago incident may not have much to do with legally operating a home-based business today, it does show how local zoning laws can affect your day-to-day life when you least expect it. And why it is important to not be caught unawares.

Here is some basic information to help you through the red tape.

Research Local Laws

Zoning bylaws and ordinances are established by cities, counties, and states and can vary widely, depending on the municipality.

You can check with your local planning agency to find the most up-to-date laws regarding your zoning district. The SBA website suggests performing an internet search to determine your local planning agency by using the name of your community or city, your state, and the term “planning.”

Business Licenses and Permits

Each municipality regulates home-based businesses according to their own rules. Some require that all businesses have a business license. But others might call for a d/b/a (“doing business as”) certificate or a letter. Most importantly, this approval from a local zoning authority is an order to lawfully conduct business.

HomeBusinessMag.com advises checking with a local building inspector or zoning board to find out if you need to obtain official approval to operate your business from your home.

General Local Ordinances

Local government officials do not have the time. Or people power to check to see if every home business is complying with local zoning laws.

However, if your neighbors become perturbed over noise levels, too many truck deliveries, foot traffic and a host of other things, they are likely to file a complaint with the local authorities.

That’s when you will be contacted. And why it’ll pay off to have kept records of everything such as permit applications, licenses, zoning authority certificates, building inspections, and anything else to show that your business is completely legal.

But if you’re found to be in non-compliance of local ordinances and bylaws that affect home-based businesses, you and your business could end up being charged heavy fines and penalties for zoning violations.

And that long-ago bus ride? Well, the driver turned out to be human after all. When he realized our predicament, he warned us, in a paternal kind of way, to not forget to bring zone fare next time. Then he smiled and opened the door. My friend and I laughed about this incident for weeks afterwards.

Knowledge is power. And it will always open the door for you.

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