Home businesses offer entrepreneurs flexible hours, the freedom to do what they want to do, and great potential for income. However, it isn’t as easy as just deciding to open your business; you need to plan ahead and learn the legalities involved so that you can avoid problems and enjoy financial success.

It’s important to write a business plan before you go into business. An effective business plan gives you a direction to go in with your business and specific actions you need to take to get where you want to go. Your business plan should also include information about who you want to reach with your business and what you hope to accomplish for your target clientele.

It can be complicated to write a business plan, so if you’ve never done one before, you might want to get help from your local Chamber of Commerce or from the Small Business Association in your county. There are many business organizations that offer newcomers free help, and you might also want to hire a business consultant or coach to help you figure out how to get your business off the ground.

There are a number of legalities you’ll have to consider before opening your home business. Most cities have zoning laws that prohibit you from conducting certain business activities in residential areas, and your rent or mortgage agreement may contain additional prohibitions. For example, you may not be able to sell products directly out of your home rather than through mail order or might not be able to use loudspeakers to promote your business in residential areas. Check with City Hall to find out what limitations there are on what you can do.

You may also need to get a business license, depending on the type of business you are running. If your business involves reselling goods made by others, for example, you’ll have to get a resellers permit so that you can buy goods at the wholesale price and charge tax when you resell them. City Hall can help you apply for business licenses, and you should also ask someone who is knowledgeable about business law to help you figure out which licenses you need.

When you run your own business, you don’t have taxes taken out of your paycheck, so you’ll have to be responsible for paying taxes yourself. You need to pay taxes four times a year. The best way to do this is to take tax money out of each payment you receive and put it in a special account, which you can then use to pay taxes whenever they are due.

Successfully operating a home business takes time, energy and money. You can save yourself a lot of problems later if you put some thought into your business before you begin. At the very least, you need to make sure you understand the legal requirements of setting up a home business in your city so that you can comply with all laws from the beginning.