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Locating your business at home

It may be possible for you to start off working from home, especially if you are providing a service. With modern telecommunications and computer technology, locating a business at home is increasingly popular.

You can deliver services and products to customers world-wide.

Types of home-based businesses

In South Australia 60,000 businesses operate at, or from, home. The types of home-based businesses include:

  • consulting
  • book-keeping
  • writing and editing
  • design
  • IT
  • health-related services
  • small-scale manufacturing.

Many tradespeople operate their businesses from home. They travel to their job sites daily and keep their equipment at home and in their vehicles.

Financial issues

Owning a home-based business is, for the most part, just like owning any other business.

Regardless of location, every business must have a market for its products and services and generate sufficient sales to cover operating expenses and make a profit.

The level of profit must be sufficient to:

  • reward the business owner’s time
  • repay any loans
  • accumulate capital for expansion
  • reward the capital invested
  • pay any taxes applicable to net income.

Operating a business at home may mean lower overheads and therefore the selling price of your goods and services can be lower.

It is also possible to claim tax deductions for a portion of:

  • mortgage interest costs
  • council rates
  • water rates
  • strata rates
  • telephone expenses
  • energy costs
  • building insurance premiums.

Consult your accountant or tax agent.

Review the viability of your business idea by preparing a business plan.

This ensures you consider all possible costs of your business operation and calculate your overheads accurately.

Legislation for home-based businesses

Planning regulations may impact on your ability to run a business from home.

If customers or clients gather at your house, or the noise level is excessive, you may breach planning regulations. Your local council could order you to cease trading. They can fine you for every day you contuinue to trade against an order.

There are some specific restrictions on businesses operating at a residential property. You must not:

  • employ more than one person over and above the owners of the property and business
  • occupy more than 30 square metres
  • use machinery drawing more than 0.4 kilowatts
  • impose greater load on utilities than would be the
    case for a residence
  • create any noise or nuisance
  • generate more than normal vehicle traffic in a residential street
  • display a sign without consent of the local council
  • display goods for sale outside the house
  • involve the use and parking of a vehicle greater than three tonnes tare weight.

There may be additional zoning controls imposed. Check with your local council.

You must consider specific insurances for your business. Household insurance does not cover business activities, such as customers coming to your home.


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