Starting a home-based business offers great risks and rewards for a savvy entrepreneur. Professionals seeking to run organizations from their homes often invest in business licenses or companies to protect themselves against potential lawsuits or other liabilities. Not all business ideas require licensing, however; Opportunities exist for home business without a license. Opening a home business without a license has its share of disadvantages – avoiding these can increase the long-term and profitability of the business.
Choose a business that avoids retail sales or regulated industries. Home businesses that engage in retail sales generally need to obtain a license to report sales or use taxes and collect such. Federal- or state-controlled businesses often have mandatory licensing requirements. Check with your local chamber to verify if these requirements exist in your area.
Consider service-based operations with low liability. Consulting, data entry or freelance work usually does not require licensing or bonding and avoids purchases to buy liability insurance. Without a license, any legal asylum taken against the company goes directly to the owner’s property.
Verify local zoning regulations for businesses operating in residential areas. Not all home business laws come directly from the state office. Local zoning laws may limit distribution, limit the number of residents and visitors, or impose other limits on unlicensed home activities.
Advertise your services through sponsorship of professional publications, classified ads or events in the field. Home businesses that offer telecommuting, such as data entry or appointment settings, can reach national marketing, while local services should focus on the immediate community.
Do not falsely claim to be licensed, mortgaged or insured. False claims can put all personal and business assets at risk.