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Your home-based business might not be legal

Most people know when they start a business outside of the home that zoning laws apply. You can't start farming in the middle of a residential neighborhood, and you can't buy a warehouse in the middle of a crowded industrial district and open up shop as a retail clothing store without a lot of research into zoning requirements. While you do have some leeway in your own home, some things aren't allowed depending on where you live.

In most residential areas, you can't make exterior changes to your house simply to support your business. That means you can't add a wing to accommodate office space and staff, and you might not even be able to hang signage or advertisements outside of your home. Your home must still look like a home, though some areas might allow you to post a tasteful sign for your business.

Traffic is also a zoning concern in residential areas. If you're going to have clients, vendors or others coming and going on a regular basis, you need to know what rules apply in your area. Most zoning codes limit how many people can come and go for your business, and you are probably limited to how many employees can work out of your home. Parking is important, because you can't tie up the street or other people's parking spaces for your business.

Noise and odors generated by your business will also likely cause you zoning issues. Some areas even completely prohibit certain types of business activity.

Make sure you understand what your restrictions are before you decide to set up a home business. Working with a lawyer to set up your business and decide on a location can help you avoid costly issues in the future.

Source: Small Business Administration, "Home-Based Business Zoning Laws," accessed Oct. 28, 2016

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