6 Pitfalls to Avoid When Starting Your Home-Based Business

So you’ve decided to finally take the step of starting your own business.  But startup costs are a lot, so many of us turns to using our homes as the base of operations.  Heck, it’s cheap.  Afterall you don’t need to a whole lot of extra money to set up shop in the den, spare bedroom, or even the dining room table.  Not so fast…

Make sure you’ve done your homework before you first open for business.  Knowing the a few simple realities could turn a nightmare situation into a workable one with a little planning. The harsh reality is that your neighborhood will likely be a factor in determining the parameters for your business: when you are open, the parking situation, what you can sell/store/manufacture on site, etc.  Here’s a preliminary list of things to think about:

1)   Office hours –If you live in a quiet neighborhood and need to be open early mornings, nights or weekends, your neighbors may have more to say about that than you’d like.   Key considerations are what hours will customers and employees be coming and how long will they be staying.  For example, a good relationship with their neighbors can turn south quickly, when you open up a bakery out of your kitchen which requires employees to arrive at 5am and those employees are really efficient when they have can play music loudly.  Or perhaps you host product parties (kitchen equipment, beauty products, etc). into the evenings.  A late crowd leaving noisily after a night of fun can dampen any neighborhood harmony when it’s too often.

2) The Product – What are you selling?  Does it make noise to build or use?  Will you need to store or use anything smelly that your neighbors might object to?  Will there be a general uproar over the odiferous fertilizer you store at home for use in your landscaping business?  Do you paint model railroads and vent those fumes near your neighbors’ condo units?

3)   Advertising – Signage can be an issue and often the city or town regulates the type of signs you are allowed to display along with the materials used.  Some towns only allow black and white signs, others may prohibit neon.  Before a big cash outlay on the sign of your dreams, make sure you are aware of town ordinances so you don’t end up with a sign that you can’t display outside.

4)   Zoning – Does your town allow your type of business in your location?  Make sure you obtain a Town business certificate, which can place restrictions on the amount of square footage you occupy and impose requirements of handicap accessibility, to name a few.  And don’t think you’ll just say what you need to in getting the certificate.  Here in Dartmouth, MA, for example, a property inspection by the Building Department is required before the paperwork can be completed.

5)   Upgrading the space – If you need to remodel your home to accommodate your business needs, will you be able to obtain the necessary permits and town permission?  You may run into zoning issues if the upgrade is outside certain parameters.  These can be dealt with, however remember that your neighbors may need to be notified and have the right to “say their peace” to the Town about your plans and the Town board will decide whether they will grant a variance or not.  Also if you want to start producing right away, will you be able to or are the renovations necessary before you open your doors.  You may need to consider contractor schedules in your plans.

6)   Other residence situations – Are there any other restrictions, such as a lease if you’re renting or a homeowners/condo association.   Check the lease or condo documents for the rules regarding what the residents can and cannot do. One of the biggest issues in apartment complexes and condos is parking.  Will your customers and employees need a place to park? Will a bad experience with a neighbor lead your customer to go to another vendor in the future?  This can get tricky depending on the situation, especially with plowing rules on snowy days in these winter climates.

So go ahead and develop your business plan for your home-based business.  But give thought to how operations will need to be carried out.  Perhaps have conversations with your neighbors explaining your plans.  You may be surprised by their offers to help with an extra parking space, or their knowledge of wind patterns to quickly dispel fumes.  With careful thought and planning, you could have a great business and find your neighbors are your first customers.