It may be possible for you to start off working from home, especially if you are providing a service. With the sophistication of telecommunications and computer technology, locating a business at home is an increasingly popular option.
It is now possible to deliver services and products to world-wide customers while operating your business from home.
On this page:
Types of home-based businesses
Financial issues for home-based businesses
Legislation for home-based businesses
Types of home-based businesses
In South Australia 60,000 businesses operate at, or from, home. The types of businesses range from simple services like consulting, book-keeping, editing, design, IT, and health through to small-scale manufacturing.
Many tradespeople operate their businesses from home, travelling to their job sites daily and keeping their trades equipment at home and in their vehicles.
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Financial issues for home-based businesses
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 owners’ time, repay any loans, accumulate capital for expansion, reward the capital invested and pay any taxes applicable to net income.
Operating a business at home may mean lower overheads and therefore the selling price of 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, power costs and building insurance premiums. You should consult your accountant or tax agent about this.
You should review the viability of your business idea by
preparing a feasibility study and
writing a business plan to ensure you include all the possible costs of your business operation and determine your overheads accurately.
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Legislation for home-based businesses
You need to be aware of planning regulations that may impact on your ability to run a business from home. If customers and clients gather in substantial numbers at your house or the noise level is excessive you may be in breach of the planning regulations. Your local council could order you to cease trading or fine you for every day that you contuinue to trade against an order.
There are some specific restrictions on a business operating at a residential property in South Australia. 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 by local councils and these should be checked as part of your business feasibility study.
You must consider specific insurances for your business. Household insurance will not cover business activities such as customers coming to your home.
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More information
On this site
Leasing commercial property
Downloads
Using your home as a business premise (PDF 178KB) - BizFacts