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Starting a home-based business? Here’s what you need to know.

Over the past several years, many Canadians have had the opportunity to experience working remotely. The love of remote work has created a boom in home-based businesses, which afford convenience and flexibility without lengthy commutes or structured office hours.

Running a business from home could be a good fit for professionals such as financial planners, consultants, engineers, editors, web designers and legal assistants, as well as entrepreneurs who sell products such as household items and office supplies.

In some cases, work could be done virtually from a home office (such as consulting with clients) or require travelling to clients’ sites. In other cases, the business may require that clients come to you, such as a photography studio, repair business or pet grooming service, which could require converting a space in your home.


Pros and cons of starting a home-based business

One of the first considerations when starting your own business is whether to lease a commercial space or run the business out of your home. Operating a home-based business allows for a more flexible work schedule, which could include spending more time with family — which may be a particularly important factor for parents with young children.

It can also be more economical than leasing or buying a commercial space. There’s less overhead, which means you save money on commercial rent, utilities and other bills. And, come tax time, you may be able to deduct a portion of your business expenses from your personal income tax.

However, there are costs to consider. If your business involves in-person interactions, conducting meetings at the kitchen table lacks professionalism; ideally you should have a private space, possibly with a private entrance and washroom. That means you may need to invest in converting part of your home into a business space, which could be a substantial cost. You’ll also need to ensure there’s parking nearby and/or easy access to public transit.

There are other cons to consider, too. While working out of your home can improve your quality of life in some ways, it can also be harder to find a balance between your work and personal life. If you’re conducting all of your meetings virtually or communicating mainly by email, it could be very isolating over time. Joining local business associations or professional groups is a good idea—not just for learning business tips and tricks, but for networking with like-minded peers.

Home-based business checklist

If you’re starting a home-based business—or thinking about it— here are a few key considerations:

  • Do your market research and write a business plan. Once you have a business plan in place, you’ll need to determine the structure of your business—a sole proprietorship, partnership or corporation—and how to finance your business. You may choose to finance through your own savings, borrow from family, take out a traditional loan, apply for a grant or some combination of the above.
  • Depending on the type of business you’re running, look into zoning regulations and by-laws to ensure you’re permitted to operate in a residential property. In some cases, such as with rentals and condo units, you may not be eligible to have your business at home.
  • Consider permits and licences that are required in your industry. For example, if you plan to run a daycare out of your home, you’ll likely need a business licence, a home inspection and a criminal record check, depending on where you live.
  • You’ll need to choose a business name, make sure the name isn’t already taken and then register it. You’ll also need to register your business with the government and register for GST/HST (if you expect to exceed an income of $30,000).
  • Once you’ve registered your business name, it’s a good idea to start building a presence online. Select social media handles and a domain name for your website; decide if you’ll build a website yourself or hire someone to do it for you.

If you need e-commerce capabilities, the Canada Digital Adoption Program offers a $2,400 grant to help grow your e-commerce operations.

  • Put a system in place to keep track of business expenses. It’s worth opening a business bank account so you avoid mixing cash-on-hand with your personal account and keep things clear for tax purposes. There are several free or pay-as-you-go business accounting software programs that can help you keep track of expenses, invoices and earnings.
  • Ideally, you should create a dedicated space in your home for work—one where you won’t be interrupted by family members or pets. Ensure the space has high-speed Internet, and that your computer is protected with anti-malware (especially if you deal with sensitive customer data).
  • Keep in mind that your homeowner’s insurance policy may not cover certain business-related losses, so you may need additional coverage. Your Wawanesa broker can review your situation to determine whether you’re eligible for our Home-Based Business coverage.


If you’re starting a home-based business, you’ll want to ensure you’re covered if you suffer a loss, such as theft or damage to business equipment. Talk to your broker and find out how you should plan for your unique business needs.


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