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A home-based business is one where your home is also your principal place of business – that is, you run your business at or from home, and have a room or space set aside exclusively for business activities.

Home-based business explained


Home-based businesses are a large part of the Australian business community, with nearly 1 million people running a business from home. It offers you flexibility, is fairly low-cost to run and allows you to juggle work and home life more easily.

Running a business from home doesn’t suit everyone. It takes a lot of discipline to establish, run and maintain a home-based business. To run a home based business successfully you need to have the management skills, industry knowledge and long-term vision to grow and succeed.

Your local government, accountant or business adviser can help you work out whether your home and your business are a good match.

Balance work and life


When you start a home-based business you need to establish boundaries between work and home life. To separate these you can:

  • set up a dedicated work space
  • have a second business mobile
  • schedule your own business working hours

These suggestions will help you maintain a work/life balance so you don’t become overwhelmed by your new business. It can also assist you to identify which deductions you can claim as part of your tax obligations.

Essentials to run a home-based business


Tax obligations

As with any new business, you must comply with tax obligations. You may need to register for:

Home-based businesses have specific tax obligations that you need to know. You’ll need to know what expenses you can claim and whether you have to pay capital gains tax when you sell your home. Check out the Australian Taxation Office's (ATO) home-based business information to understand what deductions you can claim and potential capital gains tax implications.

Insurance


Running a home-based business is no different from running a business based out of an office. It depends on the type of work you do, but you may need to consider:

  • public liability
  • professional indemnity
  • product liability

Public liability is particularly important if you have clients that come into your home as part of your business. You can read more about the different types of insurance for business or contact your insurance provider for advice.

Licences and registrations


Using your home as a place of business means you need to comply with particular state, territory and local government regulations. The registrations and licences you need for your business will vary depending on your industry.

Even as a home-based business you’ll still need to register for a business name, ABN and required business licences and permits.

The impact of your business activities on the surrounding residential area may require special permission. Depending on your type of business, you may need special permits relating to zoning, signage, noise levels or health issues.

Australian Business Licence and Information Service (ABLIS)

Find the licences and permits you need for your business.

Find advice and support


Search our advisory services to connect with a range of services, programs and business advisers to support your business.

Business Enterprise Centres provide information, advice and assistance to businesses to help support and guide you as you develop your business.

Networking is another important way to keep up-to-date with business trends. It can also help to create business opportunities and develop relationships. Consider joining a business association or find events where you can network with peers.

Running a home based business

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This case study was produced by the Queensland Government at Business Queensland.