Starting your own business is a big deal. It’s an exciting time of chasing your passions, becoming your own boss, and setting your own rules. However, it also requires a lot of planning and reading the fine print to know exactly what it takes to start a business. As a starting out entrepreneur, you are likely going to cut as many costs as possible.
This often means running your LLC using your home address. The question is: should you use your home address to start your LLC? Consider the following before deciding if you want to use your home address to start your LLC.
Advantages of Using Your Home Address for Your LLC
There are a few benefits to using your home address for your LLC as opposed to a separate business address.
Your Home Address is Free
Saving money is one of the biggest priorities for you. By using your home address as the address for your LLC, you save on rent of a physical office space, which can drain your tight budget quickly.
Using Your Home Address is Convenient
If you use your home address as the business address for your LLC, you can conveniently receive all of your business-related mail and packages on your doorstep. You won’t have to worry about getting in your car and fighting traffic just to travel to a separate mailbox location to collect your mail and packages.
Disadvantages of Using Your Home Address for Your LLC
While there are some appealing benefits to using your home address for your LLC, there are much BIGGER disadvantages that you should consider. Below are the biggest downsides of using your home address to start your LLC.
A Home Address Risks Your Privacy
If your home address doubles as your LLC business address, it will be available for everyone to see. That’s too public and too close for comfort. When you use your home address for starting an LLC, you’ll be using it across all business aspects. Your home address will be on your website, emails, marketing, directories, and other public documents. This can be risky for a variety of reasons.
Firstly, you risk hackers or predators looking for your personal information. By setting your home address as your business address, you make yourself an easy target for such offenders to invade your privacy and even steal your personal information. This could turn out disastrous if you are not careful. They could take everything from your business and personal life.
Additionally, not only do you risk your own information, but you also run the risk of endangering your friends and family if you use your home address for business purposes. Say an unhappy customer wants to mess with you. If your address is used for your business, it can be easily found and used against you. No one wants random strangers knocking down their doors and causing problems for their friends, family, or themselves.
If you want to protect your privacy and avoid angry customers, stalking, or harassment, then your home address is not ideal to use as your business address.
Your Business Lacks Credibility When You Use Your Home Address
One of the first things a potential customer or client will see is your business address. Come on, you do it when you’re researching, so why wouldn’t your customers? Even though there is no issue with starting your LLC out of your home, having a home address set as your business address will look unprofessional and diminish your reputation. One of the most important things to do early on in running a successful business is to gain your customers’ trust. If potential customers research your business and see a home address, they might think you’re a scam, and you risk losing business.
In order to build a credible image for your business, a professional business address is necessary, even if you are working from home.
How Can You Protect Your Home Address
So, what is the solution that allows you to avoid the MAJOR disadvantages listed above? Use a separate business address!
Using a separate business address will help you protect your privacy by warding off hackers and other threats to your privacy. With your home address kept off public records, you’ll don't have to worry about strangers ringing your doorbell and wreaking havoc on you and your loved ones. It will also look professional, which will both boost your business image and establish the foundations of gaining the trust of potential customers.
Plus, as an LLC, having a separate business address will give you personal liability protection to separate YOU from your business. This means your personal assets and liabilities will be protected.
What Are Your Choices Other Than Your Home Address
While you should have a separate business address from your home address, this does not mean you can’t work from home. It is completely normal to run your business out of your home. You’ll just want some extra protection between you and your business (i.e. protecting your privacy). These are the most flexible options that allow you to obtain a separate business address on your budget while still working remotely out of your home. Here are two recommended options: virtual office and virtual mailbox.
A virtual office provides businesses, such as your own, with a physical address (that can operate as a separate business address) and services that would come with a physical office. Essentially, it’s a brick-and-mortar office without the rent.
Advantages of a Virtual Office
- Professional business address
- Mail-handling services
- Local phone number
- Call-handling/receptionist services
- Meeting and conference spaces that can be rented out
- Lower cost (than a physical office space): no lease payments, no utility fees, no hardware, and no other associated costs that would arise in a brick-and-mortar office space
Disadvantages of a Virtual Office
- While it’s less costly than renting out a physical office space and recruiting business resources, this option is expensive.
- You can’t pick and choose the services you need. You will have to pay for all of the services the virtual office providers offer, including ones you may never use.
- Whenever you are on vacation, in meetings, or away from the office, the space will be empty and underutilized. This means that the money you are paying for the virtual office when no one is using it is going to waste. If you don’t need the physical space and only need a business address, this isn’t the most cost-effective solution for you.
Who Are Virtual Offices Best For?
If you meet clients in person often and need an office space to do so, virtual offices might be perfect for you. They provide that physical space you need without the high rent fees that would be required for leasing an office building.
A virtual mailbox offers a permanent business address that can receive all of your physical mail and packages. This mail is then scanned so that you can view it digitally from any device, like email. All you need is an internet connection and device, and you can access your mail from anywhere in the world, including the comfort of your home. You also have the ability to request what you want to do with your mail: open and scan, forward, recycle, or shred/destroy all with a click of a button.
Advantages of a Virtual Mailbox
- You won't have to update your business address on your LLC documents with this permanent address regardless of whether you move or change locations, your address stays for the long term. It’s a permanent physical street address that is accepted as your LLC business address.
- Get affordable mail handling and mail forwarding services. Virtual offices also offer this but at a higher price compared to virtual mailboxes.
- Don’t worry about going to a bank in person to deposit a check ever again. You can simply receive and deposit checks the moment you get them in your virtual mailbox. Have it deposited remotely. Note that a virtual office does not offer check depositing services.
- All of your mail is scanned and digitized, which means you can digitally archive and organize all of your important business documents. If you ever need to search for something, you will have easy access to past documents without the pain of paper cuts or hours of wasted time from searching through piles of paper. Use this digital storage to track all of your business and tax information efficiently, in one place, and digitally.
- You can forward your packages to wherever you are in the world for an affordable price (virtual offices charge extra fees for package forwarding).
Who is a Virtual Mailbox Best For?
If you run a remote business and don’t need to meet in a physical location to do your work (in this case you work out of your home), then a virtual mailbox is best for you. A virtual mailbox will provide you with everything you need to manage your mail and packages remotely, protect your privacy, and present a professional business image to your customers without having to worry about costly rent or long commutes. Virtual mailboxes offer you a physical business address to help you stay successful while running an online business.
While there are no rules against using your home address to start your LLC, VirtualPostMail (VPM) highly recommends against it. You don’t want to risk your privacy and safety by posting your personal address on public records for everyone to see. Additionally, using your home address can diminish the professional reputation of your LLC, and you risk losing customers because they can’t trust your business.
The best solution is to get a separate business address for your LLC. Two options are a virtual office and a virtual mailbox.
Basically, if you want the benefits of a physical office space and need a place to meet clients, a virtual office is a good choice for you. Warning - virtual offices are expensive.
Compared to a virtual office, virtual mailboxes are less expensive and the better choice for individuals who run a remote business and work from home and don’t need a physical meeting space. So, if you don’t need a physical office space, then consider a virtual mailbox, which is more cost-efficient than a virtual office.
Want to See the Difference Between a Virtual Office and Virtual Mailbox
Find out if a virtual office or a virtual mailbox is a better fit for your startup.