Building a Business from Home? Yes, You Can!
Are you starting your first business and looking around for the perfect office space? You may already be standing in it.
An increasing number of businesses operate out of home offices, from cottage food companies to tech firms. In fact, home offices offer savings and convenience, but can your home really accommodate a business? Here’s what you need to know.
Legal and Tax Considerations for Home Business Owners
Before you start planning a home office remodel, make sure you understand the logistics of operating a home-based business.
Zoning and HOAs
Not all neighborhoods allow home-based businesses. Consequently, this may not be an issue if your business operates online and doesn’t see clients on-site, require signage, or otherwise draw attention to itself. Otherwise, The Balance explains you’ll need to apply for a zoning variance. Homeowners association covenants, conditions, and restrictions may restrict home business activity as well.
Actually, homeowners insurance offers very minimal coverage to home business activities. Without a home business rider or standalone business policy, business assets and liabilities remain exposed.
Because of a business’s liability, it’s prudent to create as much legal separation between yourself and your business as possible. For most small business owners, this means forming a limited liability company and maintaining the corporate veil. Don’t worry about attorney fees. You can form a North Carolina LLC online with a little help. Visit northcarolinallc.net to learn more.
Tax deductions are a big benefit of running a business from home. MoneyCrashers notes home business owners can deduct direct and indirect expenses related to their home office, including depreciation. However, it’s important to understand how this deduction affects taxes when selling your home.
3 Ways to Make Space for a Home Business
You’ve decided a home business is a right choice for you. Now, you need to make space for it. Here’s where to look when your home lacks a dedicated office.
Convert unused space
Do you have a spare bedroom or formal dining room that could be put to better use? What about an unfinished basement, attic, or garage begging for a remodel? Converting existing space is the most cost-effective way to create a home office.
Add new space
Is “extra space” a foreign concept to you? If your home is already packed full, look outside its walls for your home office solution. Whether you build a backyard studio, a room over the garage, or spring for a home addition, adding on is a great way to get the space you need without giving up the home you love.
Sell your home
HOA restrictions, slow internet speeds, no space to expand — there are a number of reasons your home might not be suited for business. Furthermore, selling your home and moving gives you the space you need without the hassle or expense of remodeling. It’s also a great time to sell, with homes going under contract quickly due to low inventory. As a buyer, you’ll be able to take advantage of record low-interest rates while choosing a location ideal for your home business.
Designing Your Ideal Home Office
Whether staying put or selling, you’ll want to make your home office your own. Let these tips help you design a home office you’ll love.
- Privacy: Whether it’s choosing a room in the far corner of your house or installing a private entrance, privacy is key.
- Lighting: In addition to overhead and task lighting, choose a space with windows or install a skylight to reap the productivity benefits of natural light; Healthline points out this simple action can even help you sleep better at night.
- Storage: An organized office is an efficient office. Cabinets offer a sleek built-in storage solution for files, printers, and other office essentials while floating shelves and bookcases keep everyday office accessories nearby.
- Ergonomics: A quality office chair, convertible sit-stand desk, and ergonomic accessories keep you healthy and comfortable through the workday.
Do you need more space to get your home business off the ground? Let McDevitt Town and Country help you sell your home and buy a house equipped with everything you need to build a successful home business.