I Need a Business Address for My Business: What Are My Options?

New Business Startups and Home-based Businesses Surge

The need for a business addres for businesses continues to grow. According to the U.S. Small Business Administration Office of Advocacy, around 50% of small businesses in the U.S. are home-based businesses, and this number increases to over 60% for businesses without any employees. Further, more than half of small businesses start at home, and 69% of startups are home-based businesses. 

The number of home-based businesses is growing at the same time. Before the pandemic, the number of new business filings (in 2018 and 2019) sat at around 3.5 million per year. This number increased 20% (to 4.38 million) in 2020 and an astounding 35% (to 5.39 million) last year. The pandemic certainly accelerated the decision of many professionals to start their own businesses—83% surveyed by Intuit indicate it was a factor. There are a number of reasons for this surge in new business applications. For those who lost jobs during the pandemic, starting a business is one way to acquire lost income. Others see new business opportunities as a result of the pandemic.

So should new business owners use their home address for official documentation and business formation?

5 Reasons Not to Use Your Home Address for Your Business Address

When starting a business, there are a number of different needs that a solopreneur or small business must address. One of them is the address for the business. Unless the business has a permanent office space, many may assume that their home address is fine to use. But is it?

1. Not a great brand impression for your business

Many legal documents require a physical mailing address. For example, as part of forming a business entity, state and local jurisdictions require new businesses to supply an address. These are public. Additionally, contracts and other legal agreements with your customers also require a physical mailing address. Simply using your home mailing address creates questions on the part of your clients; you lack the formal and professional attributes of a “real” business. Finally, small business owners with addresses in questionable neighborhoods or even apartment complexes (viz., an indication you rent and don’t own a house) also can impact your brand, as people and businesses by human nature want to do business with others who are successful. First impressions count after all.

2. Private residences become public with home addresses

On a similar note, your home address becomes public to your prospects and clients—and for that matter the general public. There are various things that can go wrong here. First, clients can show up at your door unexpectedly and interrupt dinner with the family or a weekend of activities with family and friends are not surprises that you want to experience. They can also show up when you’re not home. Second, malicious actors can retrieve personally identifiable information (PII) about you as well as information about your business to steal your identity and hack into your accounts. Finally, there are risks as well, such as mentally unhinged clients arriving at your door at all hours of the day or night. 

3. Legal risks of a home business address

There are also legal risks when you use your home address for your business. Many assume that by forming an LLC that their personal assets are protected. However, the benefits afforded to a business via an LLC (or corporation) can be lost if a court deems that business and personal activities are intertwined and using a home address for a business is one of the factors that can be considered in these instances. A small business owner suddenly can be responsible for various legal and financial obligations such as business debts, fines, and penalties. 

4. Local ordinances and HOA/housing regulations 

In some cases, you simply cannot use your home address because of where you live. Some homeowner associations (HOA) prohibit residents from using their home addresses for business purposes. Apartment and condominium communities build documented policies into lease and community agreements that prohibit residents from operating businesses out of their homes. 

5. Loss of SEO rank

For nearly every businesses, being discovered on internet search engines is critical. If you cannot be found or don’t rank high on the search results, then you’re likely headed out of business. Using your home address can diminish your SEO rank and search results—specifically Google Business Profile listings. 

3 Alternatives to Using a Home Address

Using your home address for your business has some major drawbacks as mentioned earlier. But what are the alternatives? Here are three options to consider:

1. PO Box

Getting a PO Box from your local post office is an inexpensive solution that provides an address separate from your home. However, PO Boxes typically cannot be used when forming a legal business entity like an LLC or corporation. They also don't allow for mail/package reception during non-business hours.

2. Physical Office with Address

Renting dedicated office space gives you a professional business address to use. This is the most formal option but also the most expensive, especially for startups and solopreneurs. You'll have costs like rent, utilities, furniture, and other overhead.

3. Virtual Address for Businesses

Virtual business addresses strike a balance - they are affordable like a PO Box but can be utilized when forming a business entity. They provide an impressive professional address along with services like mail forwarding and sometimes meeting space rentals. 

Getting a business address without an office makes virtual addresses a popular choice for home-based businesses, freelancers, and entrepreneurs.

How to Get a Virtual Address for Your Business

When a business needs an affordable business address, getting a virtual address is a no-brainer.  A virtual office address comes with various services, such as mail and receipt forwarding, a lobby directory listing, and incorporation and registered agent services. 

Finding and setting up a virtual address for your business is simple and quick with the right provider like Davinci Virtual Offices. The following is a checklist that you can follow:

Find the right location

Choosing the right location is important. You need to consider factors such as proximity to your customers, brand recognition associated with the location (e.g., if you’re a financial consultant and most in your area are in a specific location, then you want to have an address there), and the availability of other services in the location such as coworking space, day offices, and rented meeting rooms. 

Make sure you are listed in the lobby directory

If you’re spending money on a virtual address, you need to ensure that your company appears in the lobby directory listing. Assuming rented meeting space is also available in the location, then having clients show up in the location and find your business listed in the lobby is important. 

Verify the presence of lobby greeters

On a similar note, presence of a lobby greeter for incoming clients can enhance your brand first impression and make it easy for clients to find what they need when they come to office location. Hence, check to ensure that the virtual address provider has lobby greeters. 

Help forming your business entity

For entrepreneurs just starting out, help forming your business can be a big boost. Not all virtual address providers include entity formation services, and thus it is important to find one that does so. 

Scale your business to new locations

Working with a virtual address provider that has numerous locations across the country or even around the globe is important. As you scale your business, you want to work with one virtual address provider rather than multiple. Doing so enables you to focus on growing your business rather than dealing with the complexities of managing multiple vendors.

Get your Virtual Address Today

It truly is an exciting time to start a business today and laying the groundwork for success is crucial. And this includes finding the right virtual office address provider and securing a virtual address. 

About Patrick Spencer

Patrick Spencer (Ph.D.) is the President and Founder of TIRO Communications that helps companies develop, build, and manage content, customer, advocacy, and demand-gen programs. Included in its offerings is TIRO Cognition Insights, a data analytics tool that enables B2C and B2B businesses to pinpoint what their customers and competitors’ customers are saying and to identify corresponding actionable product, services, competitive, sales, and marketing intelligence.

LinkedIn Profile: LinkedIn
Website: www.tirocommunications.com