The Perils of Running a Business From Home

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It's true that government can get in the way. Also true that technology is making it more feasible to work from anywhere. I'd also concur with the one commenter that said the biggest challenge is to find something legitimate, and would add to look for something with long term value, that truly benefits people, and with a solid company that looks to have good support, website, tools, and growth for the future.
In my case, I found one with purpose as well.
http://businessintobenevolence.com

Tim of MO 2:03AM January 06, 2010

One of the biggest perils is finding a LEGITIMATE home based job. Home based franchises, direct sales, affiliate marketing companies and brick-and-mortar companies that offer home office gigs ALL can be either legit, or scams. I found my perfect work from home job on a site called GoMatador.com . I cannot speak highly enough about this site. They are essentially a job search site for people seeking home based opportunities. 3 weeks after signing up with my company, I set up a profile on GoMatador.com and have fielded MANY leads from it. Profiles cost a little money, but it keeps the scams off and keeps all the listings current. I give it the highest marks for job search AND for lead generation!

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Gzgrtcho of GA 11:52AM October 27, 2009

Yes, I agree, Small businesses are the economic engine of the economy. It is unfortunate that they experience an inordanant amount of regulation both national and local in proprotion to their overall economic contribution. It is not better to have lower taxes so you can hire more employees? Employed people contribute more to the economy than higher taxes ever could.

Ajax of FL 10:06AM September 25, 2009

Cities want licenses just to ensure your paying taxes. Some cities, like Cleveland Heights Ohio, make it very hard to have a home based business. A friend with two former employees had a home based book publishing business. They had half of the upstairs floor for the computers that they composed the manuscripts on into books and then emailed to the actual printing press publisher. The city was all over him about these two people coming over every day adn working in his house. Solution: make them independent contractors with their own computers and they now work at their own houses. Loss to the city: income and business taxes.
I run my own home based internet business for advertising. Very little overhead, no actual personal traffic to the house. I do not take a home deduction so as to not mingle home vs business for when I sell the house. My city doesn't even know I have a home based business. Next year I'll run it from my new houseboat with NO property taxes. :)

Sam Adams of OH 3:32AM September 25, 2009

And the DBA filing related to writing would be for those wanting to do corporate writing type services, by the way. Anyone just doing newspaper or feature story type writing would not even need to register a DBA. If you were going to name your writing service something like Need It Last Week Web Content, that's what you'd file a fictitious name under.
Wasn't sure the previous post read clearly without that clarification.
Or...you could always continue to twiddle your thumbs until the "traditional" job market just starts churning out lots of orders to increase new management level hiring ASAP (rolls eyes).
I don't think smart people "wait around" for things to improve.
As for entrepreneurs who intend to staff other employees if starting up a traditional business with rented workspace, government needs to make it easier, not harder, for them to do so. How many businesses are large corporations? Certainly not 90% of them. MOST positions are created by small businesses that are found in every business district of every part of the USA. They are especially needed now, as the economy slowly starts to turn around, but yet there's still talk of a "jobless recovery" in that some lost jobs are gone permanently.
Cut the payroll tax for small employers, and they can then hire more people and create new jobs!

Angie Koutrotsios of IL 6:03PM September 08, 2009

Because of the state of the economy over a number of years (we've had two downturns in the past decade), many are probably (wisely) thinking about having their own little side business that can work alongside a "day job." But in doing so, yes, there is a lot to learn.
Even for something that doesn't bring people to your residence, such as freelance journalism, or phone consulting work, it is important that people do ask their local officials about zoning restrictions, as some may be required to get a license while others may not be allowed to operate (depending on the type of business).
Just for journalism, you can get kicked around in circles between your local county clerk's office and the nearest county close to yours if wondering where to register your business. A DBA filing in one county may cost less than filing in your home county of residence, but then there may be legal issues with regards to where is appropriate. You can literally spend an hour on the phone being kicked around from county clerk's office to county clerk's office, then find that sometimes, the front line people who answer the phones aren't entirely certain of what to advise.
And then there are tax issues.
Best course of action is to find a good CPA based on a referral from someone who has done whatever work you're trying to get started doing, yourself, and to be sure that they've not been needlessly audited by the IRS while using the CPA. Also, be sure it's a real CPA (Certified Public Accountant), and not the run-of-mill tax preparation service (they may just prepare taxes based on limited training, but are not real accountants with certification).
Also, when in doubt, don't co-mingle your business and personal stuff, because that can trigger IRS scrutiny. If wanting to write-off all of your phone bill, it must be a separate line, as they consider a single line to be your primary residence line and won't allow a full write-off.
I wouldn't do anything without first getting help from the SBA, the local Chamber of Commerce, a good CPA, possibly a small business attorney, and a resource like SCORE (volunteers work as mentors).
That said, there's so much regulation with regards to small business that choosing something with low overhead and minimal red tape is the best way to start out. Otherwise, don't plan on doing it from home, but renting space in which to work out of.
Not everything lends itself to work-at-home type work, and it does make sense to have zoning restrictions so that people don't start up really obscure and outlandish type ventures from otherwise perfectly nice neighborhoods. If you want to do Occult Tarot Card Readings, then please go rent space in the business district of the least well-educated part of town, thank you very much.

Angie Koutrotsios of IL 5:46PM September 08, 2009

There is also an assumption that business owners with separate business facilities don't have access to business equipment for personal use when the business is closed for the day. Why couldn't a business owner go to his printing company an hour early each day to take care of the kids school flyers, use the company truck to pick up some new furniture for his home. The basic assumption that there is some ethical distinction between how people running businesses from their home, vs. separate plant facilities use equipment, doesn't make any sense!

John Castner of NJ 4:30PM September 08, 2009

Matthew misses the mark with consistency. The HO deduction is a no brainer with any Tax Software. TaxCut is my favorite. Zoning is a consideration, but most people starting a steel mill know better than to work at home. Homes generally make a VERY poor retail location, so who cares about walk up "traffic" ... unless the product is dope.
I've been running businesses from home since 1975 and, for the first time, I'm now looking at setting up an out of the home office. In addition to the significant costs, not to mention the lease payments, I'm going to put up with landlord issues and extra insurance requirements.
Did I mention the increased losses from employee error/theft or the inefficiency of getting dressed before I answer my email or mail some orders.
Communting is not why I bought my new car.
My View: Out of home office is looking like a necessary evil with few benefits for me.
Ouch!

Veri Tas of NY 1:28PM September 08, 2009