Starting your own business is a major step and one that requires significant thought, planning and preparation. Not only do you need to perfect your product or service, but you have to work out where your business will be based and how you will manage operations. For many starting a small business, being able to afford dedicated business premises is a rarity. As such, entrepreneurs often look to start their ventures from home. In this article, we’ll explore some of the factors you’ll need to consider if you’re thinking of starting a business from your property.

Do I have permission?

One of the first things you will need to consider is whether you actually have permission to operate a business from home. Whose permission you need will depend on your living arrangement. If you’re renting a property, you must check your tenancy agreement to see if you’re contractually able to run a business from the property. If you own a house or flat with a mortgage, you may need to check your mortgage agreement or ask your provider the same question. In any other circumstance, you should always check with the owner of a property before registering a business to your home address.

Are there legal and financial implications?

You also need to review the legal and financial implications of running a business from your residence. Insurance, tax and licencing are all important factors you should be investigating in the planning phase. Home insurance may not cover any losses or liabilities in relation to your business activities, so you may need dedicated small business insurance too. You might also have to pay business rates on part of your property.

Your tax situation may be different depending on how you structure your business. If you’re self-employed you may be able to claim some housing costs in your self-assessment, which can reduce your taxable income. If you set up as a limited liability company, you will need to do more rigorous and dedicated accounting. Licences are only necessary for certain industries, such as food and drink, but you will need to consider these if your operation runs the risk of disturbing your residential surroundings. 

Is it a good idea?

Finally, you should consider whether running your small business at home is the right idea for your situation. Will you be able to maintain a healthy work-life balance? Will it disrupt your family life? These are all important considerations and should be given plenty of thought before you start to plan your operations. For many, there won’t be many alternatives when it comes to financing a dedicated workspace or business premise – so your home may have to suffice until you are able to expand.

*This is a collaborative post.