Are you filled with the entrepreneurial spirit? Do you want to start your own business from home? Before you start making a website and printing out business cards, you’ll want to take these steps first.

Check Your Zoning Laws

You don’t want to run a business that’s technically illegal from the get-go. So, before you start running a business from your home, you’ll have to check to see whether you are able to set up shop there. If you don’t do this, you could end up facing some serious consequences for your misstep — one of which could be the forced closure of your business. 

So, check your local zoning laws to learn the requirements and limitations for at-home businesses. If you are part of a homeowners association (HOA), you should also check with its board ahead of time. It might have additional restrictions against operating a business out of your home in order to preserve the values and aesthetics of the neighborhood.

Check Your Lease

What if you’re renting your home? You’ll still have to double-check whether you can legally operate your business from home. Many leases and rental agreements have clauses that say that tenants cannot operate businesses out of their units. This is often because the landlords do not want to be liable for any accidents or upsetting incidents that occur within their building.

There are some exceptions to this rule. Tenants are often allowed to run small e-commerce shops because this type of business doesn’t require any customers to enter the rental unit. But don’t assume this. Look over the contract and talk to your landlord first to see what’s allowed.

It’s possible that you won’t be able to operate your business through your home and you will have to find a commercial space to rent out. 

Separate Business Expenses

One of the biggest mistakes that new business owners make is combining their personal finances with their business finances. This is not a good idea. First, it can make bookkeeping for tax season much more challenging than it needs to be. You don’t want to make mistakes when you’re filing taxes and run the risk of being audited by the IRS for your disorganization.

On the other hand, doing this can cause trouble with your personal finances. For instance, if you decide to use your credit card to cover all of your business expenses, you could quickly rack up a balance. You might leave yourself with very little credit for when you really need it. And you run the risk of lowering your consumer credit score! A lower consumer credit score can make it challenging to get approved for loans in the future — this includes business loans.  

So, start separating your finances. Apply for a business credit card. Open up separate bank accounts for your business, including a savings account for cash reserves.

Build a Safety Net

Build a sizeable safety net just in case something goes wrong — like a piece of equipment unexpectedly breaks down. You’ll want to have an emergency fund (sometimes called cash reserves) for unexpected expenses that can put your business on hold. 

Don’t use a personal emergency fund for business expenses or vice versa. Again, you should keep these financial matters separate. If an emergency expense falls into your lap, and it’s not business related, you should only pull funds from your personal savings to cover it. If you don’t have enough personal savings, you can turn to a different solution like an online loan. With the right online loan, you might be able to borrow between $500 – $5000 for your emergency expense. That could help you recover quickly.

Personal loans are not meant for business emergencies. Use your business’s emergency fund for those. And if you don’t have enough savings, charge the expense to your business credit card.

Don’t rush into this venture. Take these steps first! You’ll want to make sure that you’re ready to launch your business the right way.