Home-based business owners often face a dilemma because they run their business from their home. There are both privacy and safety issues involved with using a person's home address as their publicly-listed business address.
If you run a home-based business or are considering starting one, you're likely pondering this question yourself. You may even be contemplating not using a physical address at all, especially if you run a service-oriented business where clients contact you online or over the phone, and never have to come to your place of business.
Some home-based business owners use a P.O. Box number as their home address for business. A P.O. Box allows you to give out a business mailing address without sacrificing either your privacy or safety. But there are also a number of reasons why you may want—or need—to have an actual physical address for your business.
Why Have a Physical Company Address?
There are a number of reasons why you may want to have a physical address for your business, such as:
- Trust and credibility. Some clients may steer away from businesses that provide no contact address, or only a P.O. Box number—for example, people may worry that businesses without physical addresses might disappear without a trace. Depending on your type of business, being able to present potential clients with a physical address at which they can contact you may help your business build both trust and credibility.
- Professional image. According to data released by the U.S. Census Bureau in 2011, more than half of businesses responding to the 2007 Survey of Business Owners were home-based businesses; home businesses are obviously alive and doing well in the U.S. today. Despite these statistics, however, it can be difficult for a home-based business to shake the image some clients may have of the home-based business owner sitting in bed working in his or her pajamas. A physical address provides your business with a more polished, professional image.
- Meeting place for clients. While it's certainly feasible to meet clients at their places of business, or conduct meetings at your local coffee shop, if your business requires a lot of client meetings you may eventually want to have your own place for holding client meetings. Having a place where you can meet clients also helps your business to build trust and credibility, as well as enhance your business's professional image.
How to Get a Business Address
Luckily, there are a number of options available if you find yourself wanting a physical address. While there is a cost involved, each of these options is still much less than the cost of renting physical office space.
- Virtual office space. Virtual office spaces, or virtual business addresses provide you with a professional-looking mailing address, and many also offer additional features and facilities, such as receptionist services and meeting spaces which can be rented when you need them.
- Mailbox services. When you rent a mailbox at a service such as those offered at The UPS Store or Mail Boxes Etc., rather than using your mailbox number as the address, you can use the store's street address with your mailbox number as a suite, or apartment number. For businesses that do a lot of shipping there is the added bonus of being able to make use of their other services.
- USPS's Street Addressing for P.O. Boxes. The USPS also offers a Street Addressing option which allows you to use either the street address for the post office where your P.O. Box is located, followed by the number sign (#) and your P.O. Box number, or the more traditional P.O. Box address. You will need to sign up for the Street Addressing option, so check with your local post office for more details.
- Coworking space. Much like virtual office space, coworking spaces provide you with a more professional mailing address to use for your business and meeting and conference rooms you can use. However, coworking spaces also offer you a physical space to actually work in, along with the use of shared resources, such as Wi-Fi. If you find yourself working at the local coffee shop in order to occasionally escape the isolation of working at home, membership in a coworking space may be an option to consider.
Registered Agent Requirements
There is one situation where a physical address is legally required: if you're starting your business as a limited liability company (LLC) or a corporation, or as a limited partnership or a limited liability partnership, you will need to have a registered agent address in the state in which you've registered to do business.
A registered agent is simply someone that your business has designated to receive important papers related to the business, such as government documents and notices related to lawsuits (also known as "service of process").
Many small businesses registered as LLCs will often have a member of the LLC serve as the registered agent for the business, with the place of business used as the registered agent address. However, in cases where an LLC is being operated out of your home, this may not be the ideal situation, as the registered agent's address is a matter of public record. P.O. Boxes aren't an option in such cases, as a P.O. Box can't be used as a registered agent's address. A physical address is required, because the address must be a place where service of process can occur.
If you operate your LLC out of your home and prefer not to have your home address listed in public documents as the address of your registered agent, you will need to appoint a third-party to serve as your registered agent. The third party can be an individual, such as an attorney, or it can be a company whose business offers registered agent services.