March 18, 2003

COLLEGE STATION – Decided to take the plunge into home-based business? Don't get all awash in unexpected obstacles. Know what rules and regulations are required before setting up shop, and your sailing will be smoother.

That's the advice from Dr. Pam Brown, Texas Cooperative Extension consumer sciences specialist. Brown and several of her colleagues from other universities and agencies have produced a program called "Cashing In On Business Opportunities," which is designed for the potentially self-employed.

According to a recent count, Brown said, more than 30 million Americans operate home-based businesses. They range from lawyers to accountants to craftsmen to landscapers to inventors.

Because so many of these businesses are in residential neighborhoods instead of business districts, she said, "public policy includes written and unwritten regulations that have developed over time to protect the public. It includes policies such as a health department regulation that restricts the use of home-canned vegetables in retail food products ... (to a homeowners') association prohibition against more than normal amounts of trucks picking up and delivering shipments of goods."

Because home-based businesses can affect residential areas, keeping up with the Joneses takes on a whole new meaning, Brown said. In order for their businesses to grow and thrive, owners must be especially good neighbors by keeping up with issues and reservations their neighbors might have about their businesses.

"Whether or not problems develop depends upon whether those home-based business operators have thought about and taken steps to address public policy issues," she said. "If those issues haven't been considered or if they have been considered and then ignored, conflict may occur at formal or informal levels.

"If it becomes severe enough, such conflict can shut down a business." But, she added, don't go overboard by relying on hearsay. "Instead, do some research on your own and find out what laws are related to the business you want to operate from your home. ... find out whom you should contact and the phone number to call if you have questions about any of the regulations."

Start out by checking the local telephone book's government listings for the numbers of such offices as planning and zoning, vendors' permits and development. If necessary, contact the offices of the mayor and/or city administrator, township trustees or county administrators for information on the correct offices and officials. "In many states, the secretary of state's office may be helpful in directing you to the appropriate local offices," Brown said.

If you have any questions, write them down and then call the appropriate office. Make a note of the name of the person who assists you in answering your questions. "Unless you are required to identify yourself," Brown said, "ask your questions as anonymously as possible. Ask your questions clearly and write down the responses. Also ask for other sources of clarification." And write down the answers you are given.

The next step is talking to the neighbors and paying attention to their concerns – even the unspoken ones. Tell them how you will make sure the business will have the least impact on the neighborhood. "Remember, your home-based business must look and act like a business," Brown said. "At the same time it must be viewed by neighbors as a beneficial part of the neighborhood. Try to find the balance."

Fulfilling government regulations might be the first step, but don't stop there. Some neighborhoods homeowners' associations have their own restrictions "that can prohibit you from legally operating a business from your home," Brown said. "Restrictions in your deed may interfere with your home business plans also."

And consider the kind of business you want to establish in your home. "Some categories of businesses are very difficult to operate from the home," Brown said. These include: food-handling, processing or packaging; animal breeding; auto body or repair; any form of manufacturing that creates dust, fumes or pollution; beauty shops; and assembly lines.

"Learn the basic requirements for home-based business (in your neighborhood)," Brown said. "Check local regulations before investing time and money in setting up."

To go into business and stay in business, the owner must first "comply with all relevant local, state and federal statues, charter and/or regulations," she said. "The business owner must receive permission from Board of Zoning and Building Appeals and a permit for such purposes issued by the Building Inspector." She added that these permit fees usually cost around $50, with a renewal fee of about $25.

Add to this the possible difficulties with working and raising a family in the same building; the hesitation of some banks and credit card companies when it comes to working with home-based businesses; and the changing Internal Revenue Service regulations regarding home-based businesses, and many prospective business owners might start to feel overwhelmed.

Help is readily available, Brown said. "Local Chamber of Commerce officials may be able to provide some assistance to home-based business owners," she said. Also, "find a local attorney who specializes in zoning and other small business matters and who wins most cases."

And always keep informed. "Spend time at the local public library reading magazines, new books on business, and area newspapers to learn as much as possible about what is happening to other home-based businesses," Brown said.

"Keep up with legislative matters. Get to know your elected officials and become involved with the drafting of resolutions and regulations that pertain to your business and way of doing business."

And above all: Get involved. As a home-based business owner, "you may want to work on improving public policies that relate to your ability to operate a business from your home," she said.

Remember that, although "changing laws is a slow, difficult process," Brown said, "it has been done."

For more information on "Cashing In On Business Opportunities," contact a county Extension agent or call Brown at (806) 746-6101 or by e-mail at p-brown@tamu.edu. More information is also available at http://fcs.tamu.edu/