Skip to Content

Can You Run a Business Out of a Garage?

While it is possible to start and run a business out of a garage, note that the laws associated will depend on what city you live in as well as the sort of business you intend to start.

Note that a good number of municipalities are known to be stricter than others. You will find that some cities allow small businesses to start and operate at home if they double as your residence and don’t impact the peace of your neighbors.

However, certain red tape comes with such endeavor and it can prove to be quite tedious, with some cities requiring a lot of paperwork for taxes, permits, and other regulations.

Things to Note About Running a Business Out of a Garage

  1. Zoning Regulations

Before setting up your business in your garage, it is recommended you take your time to find out your local zoning regulations.

Note that zoning laws vary by area and might very well determine whether your residential property is permissible to be used for commercial purposes. Don’t also forget to acquire the essential permits and approvals from local authorities to avoid potential legal issues.

  1. Homeowners Association Rules

This is particularly important for anyone residing in a community governed by a homeowners’ association (HOA). Owing to that, it is recommended you take time to carefully go through their rules and restrictions.

A good number of HOAs in the United States are known to possess guidelines that restrict commercial activities within residential areas. As such, ensure to seek approval or clarification from the HOA to avoid issues.

  1. Business Licensing

Irrespective of where you intend to start your business or even its size, you must obtain all the requisite licenses and permits.

Before starting your business, it is recommended you carry out extensive research to fully understand the specific licenses applicable to your industry and locality.

Also, make sure to submit the right application and details if you want your business to be legally recognized. It also ensures that you can start and operate your garage business without fear of fines or shutdowns.

  1. Tax Implications

It is also vital you comprehend the tax implications that come with starting or running a business from your garage. Tax-related issues can prove to be volatile ground, particularly for someone without the necessary experience and insights.

As such, reach out to or work with a tax professional to understand the relevant structure for your business (sole proprietorship, LLC, etc.) and to guarantee full adherence to all relevant federal, state, and local tax obligations.

Also, ensure to maintain accurate financial records from the start because it will benefit you when it comes to simplifying tax filing later on.

  1. Safety and Regulations

Another very important factor you would want to take into account, it is essential you make sure that your garage setup conforms to safety regulations.

Although this will most often depend on your business type, but you might be mandated to put in place safety measures such as fire extinguishers, proper storage for hazardous materials, as well as compliance with Occupational Safety and Health Administration (OSHA) standards.

  1. Scaling and Future Plans

Although starting and running your business from your garage remains a cost-effective option, you must take into consideration your long-term plans.

Ensure to evaluate your plans for your business and if your business model gives room for growth and expansion beyond the garage. It is also important you plan for potential challenges and evaluate the possibility of scaling operations.

Note that having a good insight into your operation as well as a clear vision for the future will ensure you make the right decisions as your business grows.