A home business is characterized by its location, size, and number of employees. Typically, it is a small business operated out of a residence with one or very few employees who are often family members. You may work from a home office with an outside product or service, or you may have a designated space to showcase your product and accommodate clients. Regardless of your model or vision, running a home business takes a lot of time, patience, and research. There are federal, state, city, and even neighborhood guidelines to consider as well as specific tax rules. And, when you think you have a handle on the intricacies of operating a home business, there can be surprises or issues you never knew existed. A small business attorney will assess your home business structure and help you stay compliant with zoning and tax regulations, minimize your liability, and maintain a clear and competitive identity. This post will cover four major areas for small home business owners.
- Managing Operations From Your Home
- Regulations for Establishing a Home Business
- Taxes Rules and Deductions as a Home-based Business Owner
- Validate Your Home Business from the Start
1. Managing Operations From Your Home
Despite the many challenges and pitfalls of owning a home business, you are in very good company. According to the U.S. Small Business Administration, more than half of all U.S. businesses are based out of an owner’s home. Well-known brands like Apple, Hershey’s, Mary Kay, and Ford Motor Company all started out as home-based businesses. But, before you daydream about your empire or try to decipher all of the zoning and tax laws, you must consider some basics of running a home-based business. Can you see yourself managing your operations from your home? Do you have the right space? What will it cost to reconfigure the space? Is your family on board? Will work-life balance be a problem? It is important to have a designated area for your business operations so that your entire home does not become a constant reminder of work to be done. A small business attorney will help with your home business formation from R&D to optimizing your success and work-life balance.
2. Regulations for Establishing a Home Business
Once you have determined that a home setting will support your business, there are numerous legal guidelines you must follow. Denver has specific ordinances, limiting the type of business that can be operated from a home as well as the impact it has on surrounding residences. The permitting process for establishing a home business includes a zoning permit. Even if you are a one-person day care, if you are doing business from your home and use your home address as a business address, you need to obtain a zoning permit. These set the standards for size and location of structures and appropriate uses for your property. Be sure your intended business is in compliance with the Denver Zoning Code. In the event construction is required to convert your home work space, Denver requires inspection and permitting for building code standards to protect and ensure public welfare. This is conducted after zoning permits have been issued. Some home businesses may require additional permits, licenses, or inspections. Child care and food preparation businesses, for example, require a business license. Your attorney will keep you in compliance with local regulations, including home-owners association regulations, as well as ensure you have the right insurance coverage.
3. Taxes Rules and Deductions as a Home-based Business Owner
In addition to zoning requirements, you are subject to intricate tax rules and deductions as a home-based business owner. You are allowed to deduct part of your real estate taxes, mortgage interest, rent, utilities, insurance, depreciation, and certain other expenses. These deductions only pertain to the portion of your home designated as a place of business. If you want to maximize your deductions, it is essential to maintain accurate records of how and where you conduct business in the home. A small business attorney will determine if you should change the way you do business in order to save money on your taxes and decrease your liability in the case of accidents.
4. Validate Your Home Business from the Start
There are many perks to having a home business. Working from home affords you more versatility and flexible schedules, which also helps to entice the right employee(s) if you are looking to expand your business. A home office can add thousands to the price point of your home – a great asset in Denver’s housing market. So, with all of the plans, permits, forms, insurance, and licenses in place, your home business will be up and running. How, then, do you instill confidence in your customers? There are a few easy ways to help validate your home business from the start. Use a physical street address instead of a P.O. Box; this will also increase your search engine rankings. Do not underestimate the impact of printed marketing materials. Something as simple as a business card can serve as a physical reminder of your business. Your online presence is, of course, extremely important. Engaging new and current customers via social media or blog post on your website will legitimize your business further. These are great tools for you and your customers to share success stories and great experiences. Finally, collaborate with the right people who may have expertise where you do not. A small business attorney will partner with you to create the best possible business formation and see you through the process and growth of your home business.
If you need help with your home business, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Business Lawyer. Phone: 720-258-6647. Email: firstname.lastname@example.org
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Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney
501 S. Cherry St., Suite 1100
Denver, CO 80246
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