Similar to business owners who operate from commercial office spaces, those who run home businesses need to make sure they don't violate their local zoning rules. As home businesses have exploded in popularity, more local governments have adopted specific provisions in zoning laws controlling them. Thankfully, most of the rules are straightforward and fair—with some exceptions. If you're unlucky and find that you're subject to prohibitive municipal ordinances or private land use restrictions, take a hard look at whether you should set up shop in your home after all. But more often, you'll find that you'll need to jump through a simple hoop or two and pay a modest fee to run your business from home.
Dwellings in residential or mixed-use zones are often allowed to run businesses that have little likelihood of causing noise or pollution, creating traffic, or otherwise disturbing the neighbors. Examples include freelance writers, artists, attorneys, accountants, architects, insurance brokers, and piano teachers.
To find out local rules, contact your city's planning or zoning department and ask for information on its rules for home businesses. Often, home businesses are allowed with some restrictions—such as limiting employees to residents, curbing the number of customers allowed, and prohibiting business signs posted outside. Also ask the local zoning authority whether any special rules exist for the specific type of business or activities you plan to conduct.
As to whether or not you need a permit to run a home business, local rules vary. If a permit is required, getting one is usually a simple matter of filling out a form provided by the planning department and paying a fee. You may also need to deal with other departments in addition to the zoning office. For example, depending on your business activities, you may need to get approvals from your county health or fire department.
Excerpted from The Small Business Start-Up Kit, by Peri H. Pakroo (Nolo).