Many small business owners operate from their private residence, and for reasons of privacy and safety, they prefer to keep their address confidential and not list it as the physical address of their business.
Perhaps you might feel you don't need a physical address because you don't plan on holding in-person meetings in your residence, or you may conduct your business strictly online or over the phone, depending on what services your business provides.
Some business owners in this position decide to use a post office (P.O.) box address at their local post office as a physical address because it provides an address for sending and receiving physical mail without divulging private information.
There are, however, compelling reasons for a physical business address, and if you are currently one of many home-based business owners or are thinking of starting a business from home, you should consider obtaining a physical address.
Why have a separate physical address for your business?
There are several reasons to get a physical address that is a separate business address from your home address.
A physical address lends credibility to your business
Although post office boxes are common, there's something about having a more convincing and detailed legal street address that sends the message that you are operating a legitimate business. According to Jeb Smith, the founder of Parker Marker, a business consulting firm in San Francisco, having an actual physical address for a small business provides legitimacy. "Customers may be more likely to trust a business that has a physical address rather than just a P.O. box address," he says.
Since obtaining a P.O. box address requires minimum documentation and investment on your part, customers may worry about your reliability. Theoretically, a person could end their rental agreement with the post office, and customers may fear their business mail would go unopened or simply be returned. Therefore, merely having a P.O. box listed as your business' physical address may create reservations in the minds of potential customers.
A physical business address may be required by law
In some locations, listing your home address as a business address violates zoning restrictions. Additionally, some neighborhoods are governed by homeowners' associations that prohibit residents from operating any business from their homes. If you list your business address while registering with the state, you will be cited for not following zoning restrictions and potentially fined. And if you rent your home residence, running a business from your home without notifying your landlord may put your agreement in jeopardy.
According to Jacqueline Horani, a business attorney licensed in New York and Nebraska, a physical address is required in some states for state business records. "Many people think they can just use a P.O. box instead of their home address, but many states require a full business address and won't accept your filing if you use a P.O. box." While Horani understands not wanting to use your home address for safety reasons since that information can become visible to anyone accessing state business records, she encourages business owners to check their specific state laws.
A physical business address avoids shipping limitations
In addition to concerns about professionalism and credibility, there are some limitations on receiving postal mail at P.O. boxes. Many private carriers have restrictions on shipping to P.O. boxes, whereas a physical business address allows the delivery of important office supplies, documents, and other necessary business equipment without delay.
Do I need a physical location for my business?
Many small business owners manage to successfully run their businesses solely from their own private residences. Although they may be able to make it work, there are reasons why you might need a physical space for your business.
- Meetings with clients. You don't always want to have clients come to your home, and while there are times when meeting up with your customers for coffee or a quick bite is appropriate, repeated and extended client meetings require a dedicated space for business operations. Having a physical location also helps bolster your credibility and professional image.
- Work/life balance. Small business owners struggle enough as it is with separating their professional and personal lives. Running a small business requires a great deal of work, and burnout is always a concern, so if you are unable to set firm boundaries for yourself when it comes to clocking out at home and getting some much-needed rest, a separate workspace may help preserve your downtime.
- Visibility. For many small businesses just getting started, a certain level of exposure and visibility can provide an added boost to your customer base. Finding your business through the internet may be sufficient, but having a physical address location out in the world can grow your business as well.
- Legal Requirements. According to Kelly Berry, a small business consultant for Learn Start Grow LLC, a physical address is required for your small business if you are using any email tools. "These tools require physical mailing addresses to meet the CAN-SPAM Act and other Spam laws," Berry says.
How to get a physical address for your business
There are several viable options for obtaining real street addresses for your small business. These do require payment, although all of them are more financially feasible than renting physical office space. You can decide which option best fits your own small business needs.
Coworking space
One option between using your home as your small business address and finding dedicated office space away from home is renting a coworking space. Renting a coworking space means having shared office resources while providing a place to work and meet with clients. Coworking spaces also provide you with a professional mailing address to print on your business cards and use for other physical address needs of your business entity.
Mailbox services
Several businesses, such as the UPS Store, offer a similar service as a P.O. box, but instead of being assigned a box number as your business mailing address, you can use the store's physical street address combined with your box number as a suite number. Businesses that also require frequent shipping will find the location convenient for their needs.
USPS street addressing
For an additional fee, United States Postal Service customers may use the Street Addressing option, which helps avoid the above-mentioned shipping restrictions, as well as provides a physical address for customers. The real street address for the postal office is combined with your P.O. box number in order to create a business mailing address.
Virtual mailbox
Several companies offer a virtual mailbox service that not only provides a physical mailing address for your company but also scans your postal mail and electronically forwards it to you without needing physical addresses for your business. You receive an e-mail notification when you have received mail in your online mailbox. Your mail is stored electronically or shredded if you want it to be. Junk mail is easily separated from legitimate mail by the virtual office, eliminating the possibility that you will miss something important as you sift through a stack of envelopes and flyers.
Virtual mailboxes will also receive packages on your behalf. They can forward mail, including packages from the physical location of the virtual mailbox, which acts as a go-between to prevent disclosing your residential address to business customers. Virtual addresses are a solid option for those who need the benefits of a physical address but are looking to protect their privacy.
What is a virtual business address?
A virtual business address is a real street address assigned to your business so that you do not have to receive mail at your home address or in a P.O. box. While you can pay for just a physical address to receive mail and send mail, virtual business addresses also often offer in-person receptionist services to field any walk-ins as well as meeting spaces.
Virtual business addresses are particularly convenient for any limited liability company or other corporations, as it is not legal to use a P.O. box address as a physical address on your business license. You must have a legally valid address, and for many small business owners, having their private residence registered on these legal and government documents is not ideal so they opt for a virtual address.
Obtaining a physical address for your business separate from your residential address signals professionalism and can also come with additional services that can help you grow your customer base and centralize your operations. Many small businesses operate from their owner's private residence, but there are also options for obtaining a separate physical address for business cards, mailing, meetings, and LLC paperwork.
