Some of you might think it’s perfectly fine to register your business to a home address, and include that address on your marketing and billing material. The fact is that this is the very last thing you want to do. Even an inexpensive post office box can offer a buffer zone between your business and personal life.
Consider the hassle of customers showing up at your door, interrupting you while you’re mowing the lawn, or inserting themselves into a party with friends. Then, there are problems like branding issues, stalkers, mail mix-ups, legal issues, and growth-hindering woes.
Here are 5 reasons to avoid using your home address when registering a business, or listing it on official business paperwork:
1. Branding troubles
A residential address can be fine in some industries, but when a client realizes you’re a home based business, it can impact their impression of you. Even worse, registering an apartment as your business address can make you look very amateurish to clients who Google you or who receive an invoice in the mail for your services.
As soon as a customer searches for your business, they’ll likely be served up a Street View picture of your home. A business with an office address will be viewed as much more established and professional, while a home address can conjure up negative impressions such as that you’re so terrible at what you do, you can’t afford an office.
2. Haters, competitors, and stalkers
Aside from branding issues, consider what happens when a competitor wants to make your life difficult, or a wacko client decides they’re just not happy with something you did or said — at 2 in the morning after drinking 10 mimosas at the bar!
Don’t laugh. Stalkers are very real and with your picture likely posted all over social media and your business website, a fatal attraction scenario is a very real possibility!
This comes back to the issue again of mixing personal and business matters. Consider the mail burden of having all your personal and business mail coming into the same mailbox. You’ll find yourself forever answering the door to sign for FedEx and UPS packages, not to mention product returns if you sell physical products. Not only is this messy, but it also comes back to branding as the last thing you want is to have customers mailing a product for exchange or refund to “88 Meadowvale Avenue, Apt 208” right?
A mailbox service or virtual office provider will offer an official address you can use for business, along with add-on services like signing for packages and mail-forwarding for a reasonable monthly charge. An even better idea is to use either service as a dedicated “mail room” where you go to deal strictly with customer and other business related mail, rather than allowing your home office to be buried in paperwork, envelopes, bubble wrap, and boxes.
4. Legal liabilities
A good example of a legal issue facing home business owners is when you register as an LLC to help insulate your personal liabilities to the business. When you use your home address, the last thing you’re doing is creating a clear legal separation between your personal and business activities. This is often called “piercing the corporate veil” as it creates an obvious connection between you, the person, and your business entity.
Another issue when you run a home business in a community that places restrictions on doing so. All it takes is one nosy neighbor or jealous competitor to get you into serious trouble with your municipality or homeowner’s committee. Also, if you rent a home or apartment, the likelihood is that you can’t register a business to that address without infringing your lease agreement, risking immediate eviction if you’re caught.
5. The area you live may restrict customers
A residential address can hinder expansion into new areas, including going international. If you live in a small town or city that “isn’t on the map” it may put customers off, giving them the impression that you’re a local business. After all, a major marketing firm operating out of a house in Podunk, Illinois surely isn’t set up to handle clients in London, UK. Right?
This is another reason that relates back to branding as where you’re located says a lot about your size, professionalism, and ability to service a wide swath of customers. An office located in a major business district in Chicago, Illinois would create a much bigger, brighter impression of your business in the marketing firm example in the last paragraph.
The likelihood is that you don’t want to shell out the cash to lease or buy an outside office. Most who run home businesses have this issue and are willing to hinder their brand in order to enjoy the cost savings. However, you can rent a mailbox or virtual office for a fraction of what an actual office would cost to establish a Virtual Headquarters, while eliminating most of the problems a home address can create.