In response to How to Survive the Upcoming Economic Collapse the question was asked what home businesses a family can start.
The problem is that several of the businesses that have high profit potential and low startup costs are also subject to specialized licensing. The Institute for Justice has an page Study on Barriers to Entrepreneurship that shows all the businesses that it would be difficult to get into due to prohibitive entry requirements. It is difficult at best to: community transport, cosmetology and hair braiding, catering, and child care.
All businesses, to be formal, will need a business license purchased from the city or the county. To go through this one should consult a lawyer, which is an additional cost. Then, depending on the business there are specialized licenses that must be acquired at various costs and difficulties. Then there is the issue of zoning laws that may prohibit any sort of business in a residential area, more common inside city limits than outside.
Businesses that are among the least licensed are those that manufacture, tailor, and sell clothing. This can be done by sewing or knitting, made to fit, done with minimum startup costs, and even be worked on at odd hours such as when relaxing. Another home business without licensing is for those with woodshop skills to manufacture furniture. Although the specialized tools are an investment, good furniture commands an impressive price.
Another business would be in education, but only in certain areas to reduce the prohibitions and regulations. Teaching in the arts is one option, and tutoring the academic subjects is another. Tutors are technically not teachers, and therefore exempt from some of the regulation, even though in practice they often provide high quality education outside of the formal educational establishment. The only thing a tutor cannot provide is academic credit. In some areas it is possible to formally open a private school in the home, and give academic credit, without possessing educator credentials. A private school does not always need to hire formally trained teachers.
Becoming an eBay vendor is easy, requiring basically registering with eBay and PayPal to start up the business, except in areas that require auctioneering licenses. To collect items worthy of sale on eBay all a person needs to do is scour garage sales for items that would do well in an expanded market.
While some areas require extensive licensing for anyone to tend yard, others are open about it and that would enable someone to get into a home landscaping business that includes mowing lawns, tilling gardens, and even trimming tress. The same applies to animal care short of actual veterinary services, where a person could clean stables and animals and tell the owner when it would be a good idea to refer an animal to a veterinarian.
Those who have formal training in specific fields may find that they can operate a home business completely legally. A licensed electrician may use the home as a location from which to operate on calls, while a licensed therapist may have an office at home avoiding the expense of a separate office. All such efforts are based on the zoning laws, of course.
This all implies that the business relationship is formalized. It is also possible to run an informal business arrangement out of the home, although the legal impediments to doing so need careful examination. Doing so loosens up the business model, but also makes it impossible to apply for small business loans. This could easily cause the entrepreneur to run afoul of the law, so care must be taken if this model is to be embraced. A way to avoid trouble is to engage in a barter economy.
The options aren’t as many as in the past, but there are still home business opportunities for those who want to expand their options.