Do You Need A Home Occupation License For Your Business?
When you set up your cleaning business, you had to wade through a pile of start-up paperwork.
From applying for the DBA (doing business as) name you wanted to registering for state taxes and setting up business bank accounts, you were filling out forms for days (and weeks) on end.
Finally every form is filled, every fee is paid and you’re ready to get your first customer and start earning money to put in that brand new business bank account.
Well almost…
The one license you may have forgotten about is a Home Occupation license. Home Occupation licenses or permits are required for all home-based businesses in some cities, towns and counties.
Other towns and cities don’t require Home Occupation licenses or permits.
To make matters more confusing, some cities and towns allow you to run a home-based business without a Home Occupation license, but certain neighborhoods in those cities and towns may place heavy restrictions on home-based businesses.
For example, neighborhoods with Home Owners Associations (HOAs), might have rules restricting home-based businesses.
What Home Occupation Licenses Regulate
Towns, cities and counties issue Home Occupation licenses or permits to regulate parts of your home-based business like:
How Home Occupation Regulations Vary in 3 US Cities
Some cities, towns and counties have stricter laws about home occupations than others.
Plus yearly cost for permits or licensing fees in some cities can be pretty high.
Examples of how 3 different cities regulate home-based businesses include:
➤ Chicago, IL
Chicago, IL bans 14 types of home-based businesses. However, operating a home-based house cleaning business is allowed in Chicago.
Chicago law restricts how much of your home can be used for your business. Plus there are restrictions about how business supplies are delivered to your home.
Chicago also charges a hefty $250 permit fee (every two years) for licensing home-based businesses.
➤ Raleigh, NC
In Raleigh, NC there are strict guidelines about the number of employees (currently zero) allowed in your home.
There are also restrictions on the amount of business storage and vehicles allowed in and around your home.
Raleigh’s Home Occupation fee is $135.00 each year.
➤ Seattle, WA
Seattle, WA has 4 basic rules all home-based businesses must follow.
There are limits to the number of employees, number of deliveries to your home per day and sign size. You must also live in the home you use for business.
Seattle doesn’t charge a permit or licensing fee, but there are fines for home-based businesses that break the rules.
Working With Zoning Restrictions
If your home-based business is located in a residential neighborhood or on a residential zoned street, there may be restrictions on how you are allowed to run your home-based business.
However, if anything in your home-based cleaning business doesn’t fit in with the zoning laws you still have some wiggle room.
You may be able to comply with the restrictions by making some changes to how you run the business.
If you find it difficult to run your home-based cleaning business according to local zoning laws, you can call your local zoning office to find out how to get a zoning variance or allowance.
Just be aware that getting a zoning variance can be difficult, time-consuming and expensive. In some cases, you will have to attend a public hearing for your zoning variance.
Home Owners Associations (HOAs) And Home-Based Businesses
If you live in a neighborhood with a Homeowners Association (HOA), check your governing documents or with the governing board to find out if your business is allowed and under what conditions. In some cases, you may need to get an exception or waiver of the HOA rules to run your business.
What If You Live In An Apartment?
If you live in an apartment building or complex, it’s important you notify the property owner or manager about your business activities if those activities affect other tenants.
Foot traffic, business signs, odors, noise, parking congestion, or visible clutter outside of your apartment are always top concerns for property owners and neighbors.
As a self-employed house cleaner, these issues may not apply to you because your work is done in other people’s homes and shouldn’t affect your neighbors.
If you think you’ll have issues with storage or parking because of your business, contact the property owner or manager.
Get any approval about what is allowed in your apartment or apartment storage area in writing, so there are no misunderstandings later.
4 Steps To A Home Occupation License
Stay On The Right Side Of The Law
A lot of self-employed house cleaners and maid service owners run their businesses out of their homes.
It makes sense to save the thousands of dollars you would otherwise spend on a separate business office if your cleaning business is just you or you and a partner.
Plus, there are a lot of tax benefits to running a home-based business.
Related: Self-Employed House Cleaner’s Guide to Car (and Bus) Tax Deductions
When To Move To An Outside Office
If you decide to add contractors and employees, you may need more room for your business.
With more people in your business you may now have more foot traffic and cars parking on the street.
Those are the issues that draw complaints from neighbors. A move to a business office outside of your home may be a good idea at that point.
With a Home Occupation Permit or License, you’ll know what your limits are with your home-based business.
You’ll stay on the right side of the law in your town, city or county.
The biggest plus: your business won’t trouble your neighbors and they won’t trouble you about your business.
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