Getting your home-based business in the zone
By Jenny C. McCune • Bankrate.com

"Location, location, location" is as big a mantra for the home-business crowd as it is for retailers.

While your neighborhood might be the perfect residential community, if you decide to work at home, antiquated zoning laws could complicate your business venture.

Here's how to run the zoning maze.

Get the scoop, quietly
First, you need to find out how your property is zoned and what the rules, if any, are regarding home-based businesses. Regulations can vary by county, city and even subdivision.

Check your town's Web site, or go down to city hall. Town clerks, zoning departments and planning commissions are all possible sources for zoning information. Chris Hansen, founder of the Home Based Business Council in Neptune, N.J., advises would-be residential business owners to get the zoning lowdown anonymously.

"Call from a friend's phone, and tell them that you are thinking of buying a home in the area and putting in a business and ask what the rules are," Hansen says.

The reason for the cloak of secrecy? Most laws on the books don't favor home-based businesses, so you don't want to tip your hand to local authorities.

Also many communities take a "don't ask, don't tell" approach toward home-based businesses, Hansen says. You generally can operate uninterrupted, provided your company keeps a low profile and doesn't bother the neighbors, even though technically you may be in violation of a zoning code.

Ancient origins means outdated rules
The reason that zoning laws work against home-based businesses is that many rules date back to the 1920s or earlier.

"They were designed at the apex of the industrial age," Hansen explains. "People didn't want factories next to their homes, so these zoning laws outlaw most businesses. They were designed long before today's computer technology that enables many businesses to be quietly operated in the home without disrupting community life."

Even if you unluckily land in an area with tough zoning regulations, many have exemptions. "The exceptions usually are professional: doctors, tailors, hairdressers, attorneys," notes Hansen.

If the local rules permit you to run your computer consultancy from your home, there may be other caveats that can crimp your style, usually no employees, no signage, and no parking a company van in your driveway. For example, an ordinance in White Plains, N.Y., prohibits parking of commercial vehicles in residential neighborhoods. The reasoning is that having "Joe's Heating & Plumbing" van parked on your street will lower real estate values.

When Maury Wiegand started Virtually Fitter, her fitness training company, she discovered that her home was zoned residential even though it's diagonally across the street from several commercial entities. Fortunately her town, Bozeman, Mont., permits home-office business licenses for numerous ventures regardless of zoning.

Bozeman's exceptions to the rules include day care providers, music teachers, accountants, and consultants, Wiegand says. "They weren't sure what to classify me as," she recalls, "but I believe they classified me as a consultant."

Challenging the zoning cops
What happens if you do the right thing by checking zoning and find that your local ordinances prohibit businesses being run from the home?

According to Janet Attard, who operates BusinessKnowHow.com, you have three courses of action: lay low, try to change the law, or apply for a variance. A variance is a special law or permit that allows your business to be the exception to the no-business-in-the-home rule.

While Attard can't advise you to skirt the law, she says that's what many home businesses do, in part because local zoning boards are happy to skip zoning law enforcement provided your business isn't bothering anybody. That option also takes up the least amount of work.

Moving up the work scale, getting a variance requires some effort on your part. You'll have to make your case at a hearing. You'll also need to have your neighbors sign a petition or otherwise indicate that they don't mind if you run your mail-order outfit from your home, says Attard, author of "The Home Office and Small Business Answer Book."

Finally, you can fight city hall or whatever legal entity is restricting your right to work from home. That's one reason Hansen started the Home Based Business Council. He's used it as a platform to try and modify New Jersey zoning regulations.

Other licenses to work
Think you're all squared away to start your business because you complied with local zoning regulations? Think again. It could be just the beginning.

Companies that are approved to be run from the home must follow many of the same regulations that Main-Street operations face.

There are a host of licenses and permits you may need to get your business off the ground. They include:

• Business licenses from one or several different levels of government (state, county or municipal).
• Fire department permits, required of companies that use any flammable materials or for businesses that will be open to the public.
• Air and water pollution permits for businesses that burn any materials or discharge fluids into local sewers.
• Sign permits, which can restrict size, location and lighting of signs.
• Health department licenses if the business sells food, either as a restaurant or as a wholesaler.

When it's time to reconsider
Even after you've cleared all the permitting hurdles, there are times to reconsider home-business plans. If your endeavor will increase local traffic or otherwise bother the neighbors, maybe you should do yourself and your community a favor by finding appropriate commercial space.

And even if your company ends up in the home, you can't afford to let down your regulatory guard.

In the case of Wiegand's training business, she has to comply with local signage rules. She also must open up her training studio for inspections by such municipal departments as fire and building. And she isn't allowed to have any employees working out of her home.

Although such compliance creates more work for the owner of Virtually Fitter, she's happy operating her training business out of the home. Her commute is short -- just down to the basement -- and she has more time to spend with her two boys. And while the rules are "strict," they're actually easy for her to comply with, Wiegand says.

Jenny C. McCune is a contributing editor based in Montana.

-- Posted: Aug. 6, 2001