Streetwise Advice: On Home-Based Business

Working Out of an Apartment

For several years, I ran my growing book publishing company out of two different basement apartments in residential neighborhoods in the Brighton section of Boston. In each case, dozens of neighbors were aware of my business, and no one ever complained.

At each address, we had daily UPS deliveries. Once a week or so, tractor-trailer trucks pulled up to make deliveries. My employees described some of these trucks as being as big as aircraft carriers. In fact, at one location I had to ask several neighbors to move their parked cars for these deliveries—the trucks had to back into an alley and unload through my kitchen window! But the neighbors were happy to help us out!

Problems on Cape Cod

Home business locations don’t always work out so well. I ran into a bit of trouble running one of my entrepreneurial ventures out of my parents’ summer home on Cape Cod.

The road the house was located on was “Corporation Road,” and half a dozen tiny commercial businesses were located on this street. At some point long gone, Corporation Road proudly housed some businesses that were important enough to name the street after. However, for the town today—as in most cities and towns across America—strict zoning laws are more important than businesses. Corporation Road has long been zoned residential.

On one of my summer vacations, I bought and sold used boats from my parents’ home. The boats were concealed in the back and side yards, and I wasn’t displaying any business signage on the property. My immediate neighbors thought my business was clever and they admired my ambition at my young age. Apparently, though, a distant neighbor—half a mile or so down the road—wasn’t quite as impressed. He complained to the building inspector.

My parents received a certified letter from the town demanding that all business activity on the premises cease and desist within seven days. If my business continued to operate beyond that date, the property would be seized and sold at auction.

What an opportunity this presented! I moved all of the boats into the front yard and placed huge placards and advertisements announcing the forced closing of my business. Those boats went fast! I was amused, however, to note how happy people were as they cashed in on my supposed “misfortune” and snapped up my boats cheap.

I still didn’t give up, though. I began storing boats down at the town boat dock in the local harbor. Unfortunately, several days later the town issued a new ordinance limiting the number of boats any one person could leave at the dock at once.

Building Permits

Get proper building permits before beginning any construction work on a residential home. If your property is in a neighborhood that is zoned residential, try to avoid doing any work that might require a building permit if you think your chances of getting a variance are slim. There are many instances, in many localities, where construction was ordered dismantled because the proper permits were not obtained.

Also, obtain any appropriate electrical, plumbing, or similar permits. And if you are doing electrical work, use a licensed electrician, or at least get the work inspected and signed off by one. The liability risk, not to mention the safety risk, of shoddy electrical work is enormous.

Small Home-Based Office

Generally, even if the zoning doesn’t technically allow it, I think your chances of running a small home-based office with only a couple of employees (i.e., not an unusual amount of cars) and minimal if any customer traffic without getting a complaint or getting caught are excellent. But there is never any guarantee. Don’t be tempted to put up any outdoor sign no matter how small—then you are begging for trouble and offering proof of your business.

About Bob Adams

Bob Adams is a Harvard MBA serial entrepreneur. He has started over a dozen businesses including one that he launched with $1500 and sold for $40 million. He has written 17 books and created 52 online courses for entrepreneurs. Bob also founded BusinessTown, the go-to learning platform for starting and running a business.