Is Your Home Business Legit?
 Terry M. Blair

Before you start peddling widgets from your living room, make sure your home business is legit.

The process of knowing and meeting municipal regulations is fairly simple. But you will need to schedule some time for treks to city hall and to your county seat. These government offices regulate everything from business names to the type of signage you can (or can’t) use to promote your home business.

Follow these guidelines to make sure your home business meets the requirements of your hometown. It’s better to lay a solid groundwork when you start your business, rather than be required to pull up stakes after you’ve become established.

Business name
First, make sure your business name isn’t already in use. For a nominal fee, county officials will search the fictitious business name records. Or you can search yourself for free. A telephone call to the secretary of state’s office in most states can determine whether a corporation has claimed the name. Make sure the business name you want isn’t already a registered trademark by contacting the U.S. Patent and Trademark Office by phone, letter or online, www.uspto.gov.

After you make sure your name is not already claimed, officially record the name as your own. Usually, you register your fictitious business name (FBN) or DBA, which stands for “doing business as,” at the county level. You need a fictitious business name to open business bank accounts and to protect yourself from others who might go by the same name.

Permits and licenses
Next stop, city hall. Not every municipality regulates home businesses. But you need to know for sure. The best time to find out that it’s illegal to sell widgets from your kitchen table is before – not after – you’ve stocked the garage with hundreds of boxes of product.

Most cities have business license departments that issue licenses and collect the fees. These departments can explain to you what is required and prohibited.

Before you pay for your business license, ask at city hall whether there are additional licenses or permits that are required. Proof of meeting such additional regulations can be a condition for issuing business licenses.

Be sure to ask at city hall whether your type of business requires county or state licenses or approvals too. At the least, they should be able to tell you which county or state agency to contact for further questions.

Zoning
Also, while at city hall, ask whether there are particular zoning or land use restrictions applicable for your type of business. If the business license clerks can’t tell you, they can refer you to the right department. Such restrictions run the gamut. Some cities regulate with a heavy hand; others are virtually hands off.

High-volume enterprises, such as retail sales, that generate heavy vehicle traffic are generally frowned upon in residential areas. And low-profile businesses, such as transcription services, may seem unobtrusive. But you never know what the city fathers have deemed illicit. Assume nothing.

Some municipalities may restrict the number of workers your home business can employ. They may also restrict on-street parking or require a certain number of parking spaces.

Ask detailed questions to make sure your business falls within municipal guidelines. Find out whether special permits or licenses are required.

Signage
City hall (or the county seat if you are in an unincorporated area) is also where you sort out details such as whether you can erect signs on your property to promote your business. Most jurisdictions frown on overt business signage in residential areas, but then again, every jurisdiction is different. Before paying for that blinking neon sign atop your garage, find out if the city will make you tear it down.

(Posted July 2005)

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