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Can You Run A Business Out Of Your Home? 

Can You Run A Business Out Of Your Home? 

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Can You Run A Business Out Of Your Home? 

Can You Run A Business Out Of Your Home?  

Can you run a business out of your home? 

This is a question that many people ask, and the answer is that in most cases you can, but it’s important to do your research first. 

While there may be some restrictions on what type of business you can run from your home, with a little creativity and organization you can definitely make it work. In this article, we’ll discuss some of the potential restrictions you may face and if you need inspiration, we have some popular home-based business ideas to look at. 

Things to Consider When Starting A Home-Based Business

Before you decide to start your business from home, it is important to research what licenses and permits you may need, in addition to other restrictions. While each state has different regulations, there are some general things you should be aware of. 

General business license

A business license is permission granted by a governmental agency to legally operate a business in a specified location. Business license requirements vary by where the business is located and what the business does. 

Occasionally, the registration of business licenses is handled by the state, but most often they are required by a city or town. In some cases, a city may require a home-based business license while other times a business license is required when you operate a certain type of business, such as a pool hall or pawn shop. 

Related: Do I need a business license?

Sales tax permit

While not specifically a license for a home-based business, if you are selling physical products or certain services, you will need a sales tax permit. A sales tax permit is an identification number that allows businesses to collect and remit taxes on the goods they sell. 

Related: How to apply for a sales tax permit

To obtain a sales tax permit, you will need to fill out an application and submit it to your state’s tax agency. Once your application is

Employer Identification Number

An Employer Identification Number (EIN) is a nine-digit number assigned by the IRS. It’s used to identify the tax accounts of employers and certain other types of businesses.

You may need an EIN to open a business bank account, apply for business licenses and permits, or file your business taxes. If you have employees, you’ll need an EIN to pay them.

Related: How to apply for an EIN


Zoning ordinances are laws that define and limit the types of activities that can take place in specific areas. Zoning ordinances are put into place to protect property values, ensure a mix of compatible uses in an area, and promote public health and safety. 

Regardless of business license requirements for home-based businesses, local zoning laws may restrict the legality of having one. 

Zoning isn’t just a requirement of a county or city, but can also be enforced by a homeowners association (HOA). 

When you operate a business from home, it is important to make sure that your business is legal to operate. In many areas, a home occupation permit is required before operating a business from home. You also may find out that your business isn’t legal to operate, but there is a formal process to request a zoning variance, that may allow you the opportunity to operate your business. 

There have been cases of people starting their business from home, even though it wasn’t legal because “nobody would find out”. Maybe they were an online business or a service business that went to their clients. And in a lot of cases, there aren’t any issues. However, if a neighbor thinks there may be a business in operation (and there always seems to “the neighbor” that sees everything), they can report you to the city which can force your business to shut down and/or pay hefty fines. 

To avoid this, it is important to check with your local zoning office and HOA and find out what the requirements are for running a business from home before you start. 

Not zoning related, but another important consideration is that if you rent or lease your property, you will want to check and see if approval is needed from the landlord to operate a business. 

Business Entity Selection

A business entity refers to how a business is legally structured to operate. The most common forms of business entity include sole proprietorships, general partnerships, corporations, and Limited Liability Companies (LLCs).

Sole proprietorship –  A sole proprietorship is the simplest form of business entity and is often chosen by individuals starting a business. This structure means that the business and the owner are one in the same, so all debts and liabilities of the business are also born by the owner.

General Partnership – A general partnership is similar to a sole proprietorship in that there is no legal distinction between the business and the owners. All partners are jointly liable for the debts and liabilities of the business.

Corporation – A corporation is a legal entity that is separate from its owners. The corporation provides liability protection for its owners should the business be sued or can’t pay its debts (with the exception of most bank business loans).

Limited Liability Company (LLC) – An LLC is a business structure similar to a corporation in that it offers limited liability protection to its owners, but it has the ease of operation of the sole proprietorship and partnership.

Related: Overview of business entities

Business insurance 

In most cases, homeowners insurance would not cover a loss to business assets or a loss due to business activity.  That is why it is important to have adequate business insurance in place to protect your home-based business. 

There are a number of different types of business insurance, but some policies that may be particularly important for a home-based business include: 

· Property insurance – covers the physical location of your business, as well as any equipment or inventory

· Liability insurance – protects your business from claims arising from injuries or damage caused by your business activities

· Commercial auto insurance –  covers any vehicles used for business purposes

Obtaining the proper insurance for your home-based business is an important step in protecting your business and your personal assets. Be sure to contact an insurance agent to make sure you are covered.

Related: Types of business insurance that you may need

Sign Permit 

Depending on the type of business you are running and the regulations in your area, you may need to get a sign permit before putting any signage on the residence. 

Sign permits are typically issued by the city or county in which your business is located. The process for getting a sign

Health and Safety Permits 

If your business will be handling any food products, you will need to obtain the proper health and safety permits. 

There are a number of different types of food businesses that can be run from home, from catering to food trucks, and making specialty chocolates and jerky, and may have their own set of permit requirements. 

In addition to food-related businesses, there are a number of other businesses that may require health and safety permits, such as daycare businesses, salons, spas, and massage therapy businesses. 

To find out if your business will require any health and safety permits, you can contact your local health department. 

Professional License 

Depending on the type of business you are running, you may need to obtain a professional license. This isn’t really a “business license” but it is a license to perform a certain service. 

Each state is different, but there are commonly a number of different professions that require a professional license (sometimes referred to as an occupational license), from lawyers, accountants, interior designers, barbers, cosmetologists, contractors, locksmiths, and more. 

Professional licensing is commonly required at the state level, and there is usually a state board that you can quickly check with, however, some cities occasionally also require professional licensing. 

Operating a business from home can be a great way to get started in business, but there are some important considerations to keep in mind. Be sure to check with your local zoning office and HOA to find out what the requirements are for running a business from home. You will also want to make sure you

How does working from home affect tax returns? 

If you are a business owner operating out of your home, you may be able to deduct certain expenses from your tax return. Common home office deductions include a portion of your mortgage or rent, utilities, insurance, and repairs and maintenance. 

Working from home can have a number of implications on your income taxes, both good and bad. Be sure to consult with a tax advisor to ensure you are taking all the tax deductions you are entitled to and that you are properly reporting your income.

Can you run a business out of an apartment?

In most cases, yes. However, it is important to check with your rental contract and the landlord to be sure. If you have approval from the landlord, the next step is to check your local zoning office to see what the requirements are for running a business from home.

Working from home can be a great way to get started in business, but there are some important considerations to keep in mind. Be sure to check with your local zoning office and business licensing agencies to find out what the requirements are for running a business from home. 

If you are in need of inspiration, here is a list of popular home-based ideas. Check out our full list of business ideas!

  1. Dog walking
  2. Makeup line 
  3. Handyman business
  4. House cleaning
  5. Make dog treats
  6. Etsy shop 
  7. Home daycare
  8. Sewing business
  9. Landscaping
  10. Moving company
  11. Junk removal
  12. Car detailing 
  13. Pet grooming
  14. Personal shopping
  15. Courier business 
  16. Baking
  17. Small engine repair
  18. Computer repair
  19. Web design
  20. Marketing consulting 
  21. Social media marketing
  22. Gift wrapping
  23. Virtual assistant
  24. Resume writing service
  25. Phone case
  26. Freelance writing
  27. Grant writing
  28. Photography
  29. Knife sharpening service
  30. Graphic design
  31. Event planning
  32. Window tinting
  33. Party planner 
  34. Home organization
  35. Home staging
  36. Sell handmade jewelry 
  37. Sell homemade candles
  38. YouTube channel 
  39. Food delivery business 
  40. Sell bath bombs and soaps 
  41. Knit or crochet items
  42. Furniture repair
  43. Dog training 
  44. Appliance repair
  45. Sell art or paintings  
  46. Make greeting cards
  47. Credit repair
  48. Private tutoring

Home-based businesses are a great way to get started in business, but there are some important considerations to keep in mind. Be sure to check with your local zoning office and business licensing agencies to find out what the requirements are for running a business from home.


  • Greg Bouhl

    With over two decades as an entrepreneur, educator, and business advisor, Greg Bouhl has worked with over 2,000 entrepreneurs to help them start and grow their businesses. Fed up with clients finding and acting on inaccurate and outdated information online, Greg launched StartUp101.com to be a trusted resource for people starting a business.

Can You Run A Business Out Of Your Home? 

Can You Run A Business Out Of Your Home? 

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