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Regulations changing for home-based businesses in San Diego

If you own or operate a home-based business in San Diego County, your options for growth and expansion are improving. Last month, the City Council’s Economic Development Committee tentatively approved a proposal to ease regulations for people who work in their homes. The proposed changes are now under review with the full City Council.

Why loosen business regulations in residential neighborhoods?

A majority of U.S. businesses originate in personal residences, according to the U.S. Small Business Administration (SBA). Steve Jobs started Apple Computer in his parents’ garage. Mary Kay Cosmetics and Ford Motor Company started out as home-based businesses as well.

According the San Diego City News Service, there are currently about 35,000 home-based businesses in San Diego, many of them in the engineering, science and technology industries. The committee hopes to encourage these types of entrepreneurs – and others as well – by loosening current restrictions.

Originally, San Diego officials wanted to keep neighborhoods from becoming too commercialized. Current city regulations include the following provisions:

  • Co-owners, partners or employees of the home-based business are not allowed on the residential property unless they live there.
  • Customers cannot visit the home-based office or work space.
  • A business owner may pay a $5,000 fee for a Neighborhood Use Permit to get around these regulations, but the cost is prohibitive for most small business owners.

The proposed changes will allow one employee, partner or co-owner to be on-site during city-mandated business hours – such as from 7 a.m. to 7 p.m. Six customers may be allowed to visit your personal property each day with certain limitations. The cost of a Neighborhood Use Permit will also be reduced.

Three important considerations for new business owners in San Diego

If you own a home-based business or plan to start one, it is important to consider all of the potential pitfalls as well as establish long-range plan for success. Before another day passes, stop and do the following:

  • Count the cost not only for the business expenses – such as insurance, health care and advertising – but to your personal life as well. Will operating a business out of your home disrupt your family and your work-life balance?
  • Write down the steps you need to take in order to succeed, and indicate which milestones you will use to measure your success. Just the act of thinking through the process can help you clarify the direction you wish to take. A written list or business plan – no matter how informal – can be a real revelation six months or three years down the road.
  • Consult a lawyer to make certain you are in compliance with local, state and federal regulations, such as zoning rules, licensing and permits. An attorney can help you choose the right type of entity for your unique circumstances and provide you with advice regarding issues of taxation, potential liability, risk avoidance and contracts with customers, co-owners and those with whom you do business.

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