“Change” has been on everyone’s mind since at least March 2020. Change has been the driving force in our social lives, family, education and businesses. Massive layoffs or work (and income) slowdowns and reductions have caused many of us to reconsider our careers and what we want to do when we “grow up.” New home-based businesses are opening. “Gigs,” whether multi-level marketing (“MLM”) company opportunities or side-businesses, from the former “gig economy” are becoming full-fledged businesses. Friends in the MLM world have reported that 2020 was an amazing year as more people were willing to try these opportunities hoping to replace income lost from regular jobs that were down-sized or simply shut down. But, having your work follow you home is more complicated than when that cute puppy did when you were a kid (no, Dad, it really did follow me. I promise). “Bringing your work home” creates a host of issues and legal landmines most entrepreneurs aren’t aware of.
Starting a home-based business isn’t as simple as… well… just starting it.
There are rules, regulations, licensing requirements, inspection requirements and other restrictions that apply or even prevent your home-based business from coming home.
First and foremost, I always suggest you incorporate any business you have.
Once you’re incorporated, you will likely also need a local business license from your county. Then what you need to do to operate an “at home” business will depend on the type of business you have started and where it is located. If you are unsure what rules and regulations may apply to your business, speak to your local business lawyer.
As an example, my neighbor purchased the 24-acre heavily wooded horse farm that partially abutted my property. Within weeks of moving in, he started cutting down trees and trucking in tons of soil. It didn’t take long to figure out why. From sun up to sun down, 7 days a week, the sound of motocross bikes ripped across the land. To add insult to injury, he then moved his commercial masonry business into the horse barns. Construction debris cluttered the once pristine land.
Zoning. His property was zoned for agricultural business only. A motocross race track and a masonry business weren’t agricultural uses.
Deed Restrictions. The property also had a conservation easement that benefited the neighborhood and the County, which further limited what the owner could do with it. The house sits on the Chesapeake Bay Watershed. This means if he wanted to cut down a tree, he had to get special permission to do so to protect the water runoff going into the Chesapeake Bay.
Licensing. Various county licenses were required for both businesses, which my neighbor hadn’t bothered to get. He also didn’t get County Business Licenses for these two businesses so the County could tax him on the business license. He did manage to get a provisional permit from the Board of Supervisors for the motocross track without notice to the neighbors, which still makes me scratch my head to this day more than a decade later.
Noise Ordinances. Oh, and all that noise, violated the County Noise Ordinance (he literally was too darn loud).
The neighbors sued him and the Board of Supervisors over the motocross track. The County sued him over the masonry business (which was sort of a shame since good masons are hard to find and worth their weight in gold) and the violation of the conservation easement terms. Ultimately, both businesses were shut down at that location and he had a judgment entered against him for the clean up and replanting costs for the property.
Sometimes jumping through hoops for the requirements of bringing your business home means you have to slow your roll.
The farmer across the street has pygmy goats (super cute by the way) and uses their milk to make artisanal goat cheese (super yummy by the way). Starting that business meant she had to build a separate building to house her commercial-grade kitchen on the farm. She could not use her personal kitchen for her business. The kitchen and her cleaning protocols had to pass Virginia Health Environmental Health Specialist certifications. She had to obtain a commercial insurance policy as part of that certification process. Okay, most people won’t build their own commercial kitchen, they’ll lease space at a commercial kitchen, but the certification process before you can offer food to the public will be the same. So, while you might think it’s great to take the cookies that everyone loves at the bake sales and offer them online as a new business, STOP. Before you do, make sure you have all the licenses and health certifications, and insurance coverage you need before you offer those cookies to the public. Failure to have the proper protections in place puts you at HUGE risk of civil and criminal fines from the state but also puts your personal assets at risk if someone gets sick or has an allergic reaction from eating your food. An business lawyer in Fairfax, VA can help you navigate any potential issues with starting a business at home.
You may now be “doing business” in another state.
Don’t think lawyers are exempt from issues raised by working from home. At a recent seminar held by my malpractice provider, ALPS, the company discussed how lawyers working from home during the pandemic may risk violating the unauthorized practice of law rules in several states. For example, if my law office is in Virginia, and I have a Virginia license, but I was sent to “work from home” at my house in North Carolina (I wish) where I don’t have a bar license, am I practicing law without a license in North Carolina? ACK! Really? Yup. Those are the issues we are also wrestling with within the legal field. For those who want to know, the short answer was probably not IF we colored within certain lines. Taking this question outside of the legal field, if I send my formerly Virginia-based sales employees to work at home in DC, is my business now doing business in DC to the point I need to register it there? Maybe. Writing this made me realize that my little piece of farmland is quite the hub of entrepreneurs. It also means that we, as business owners, need to be asking questions that we likely never to consider when we or our employees worked at our brick-and-mortar location. Yet, given the continuing impacts of the pandemic and the resistance of the workforce to return to the office, these are questions we need to answer, with the help of a business lawyer. Whether you are starting a farm-to-table business, enrolling in an MLM company, offering services to the public or other businesses or selling products online, take the time to find out what restrictions might apply to your business now that it has followed you or your workers home.