Homebased Startup Checklist

The Legal Details

  • Business name. When you've decided on your business name, you'll want to make it legal by filing a DBA ("doing business as"). Most areas require you to register with the county and run a notice in your local newspaper. Protecting your new name with a trademark is also a great idea to ensure both that no one filches your golden name and that you're not unknowingly using someone else's. Your trademark search helps you determine the latter--your local Yellow Pages and chamber of commerce are easy places to start looking. Visit the U.S. Patent and Trademark Office's website to read their trademark FAQ.
  • Zoning. Want to start a homebased business? You'd better make sure it's actually legal in your neck of the woods. Check with your city or county, but as many homebased experts suggest, call anonymously, because if it isn't legal, you may find an official coming around for a peek at your office. If it is legal, you still need to find out about any restrictions--like signage or parking--before you make enemies of your neighbors.
  • Licensing. You may need to get several different types of licensing. The typical city permit is the first most people think of. But your county may also require a business license; the fire department may need to inspect your office; you may need a sign permit if you're advertising your at-home business. Depending on your type of business--say, a hair salon or insurance agency--you may also need to be professionally licensed by the state. Cover your bases by checking with all your local agencies: city, county and state.
  • Tax ID/sales tax. Sales tax laws vary depending on locale, but one thing is certain: If you don't apply for a "seller's permit," you'll be in hot water. Check with your city, county and state offices to ensure you're collecting the right amount of sales tax from your customers--and that you're paying the right amount to Uncle Sam. You also need to obtain a tax ID for your own business from the IRS. Check with your accountant to iron out the details.
  • Insurance. You've built it, and they will definitely come. No, we're not talking about customers. We're talking disasters, from employee theft to a plane crashing into your home office. The best way to protect yourself is to insure yourself to the hilt--and your homeowner's policy more likely doesn't give you the protection you think it does. Check out the resources in our "Legal Resources" box below, then schedule a visit with an insurance agent, so you can protect your valuable business from top to bottom.
  • Business structure. This is where you decide which acronym or abbreviation you're going to paste onto the back of your business name. Really, it's much more involved than that, which is why you should go over any decisions with an attorney. Whether you incorporate or stay a sole proprietor, go for an LLP or LLC, this decision affects your personal liability and many tax issues.
  • Get an attorney. According to Startup Basics Expert Keith Lowe, an attorney is one-third of the professional triptych that'll help your business become a success. (A banker and accountant are the other two-thirds, by the way.) Don't be intimidated when you go on your business-attorney hunt; even if they have 10 degrees framed on the wall, they're still working for you. Ask lot of question and don't settle for less than the best. Like your insurance agent, a good attorney will be worth the cash outlay, because he or she protects your business.

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