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Starting a Home-Based Software Company?
deanj asks: "I'd like to start a new software business, as I'm sure many Slashdot readers would. I'd like to be able to run the company out of my home, at least until I can afford to move into an office in commercial area. A major roadblock to starting a home business are zoning restrictions, set by both home-owners associations and by the town you live in. So, I'd like to Ask Slashdot: What were your experiences with getting your company zoned properly and started? What did you have to do? What other tips do you have for someone starting their own home-based software business?"
I tend to agree. Councils in Australia will do nothing whatsoever unless someone complains in writing. If the business generates lots of cars parked outside, incessant noise, or other things the neighbours will notice, its not suitable for a home business anyway.
Otherwise the biggest problem is family, friends, and relatives treating you as a lay about, and bugging you to do real work, because they can't see nor understand what you do!
Don't tell anyone. No one really cares unless you have a bunch of cars/clients parked out in front of your house. That's what the zoning is for.
Anything else is just a money grab, and you can simply not pay. The fee vs. lawyer-fees-for-them-to-fight-it ratio is HEAVILY on your side. Also, when push comes to shove, you can just pretend-move your business to 1040 W. Addision in Chicago or something.
I've done it for 10+ years and no one gives a damn from a city point of view. Heck, I bring in a couple hundred grand in out-of-state revenue, so if they want me to pack up my bags and move, then fine. Their loss.
I think there's actually a bit of related legal precedent involved here. Remember when a Florida town tried to get an injunction against one of those Voyer Dorm type sites? The court ruled that since the acts of transacting business took place online that the zoning ordinances didn't apply. Their position was that since there were no customers visiting the house and didn't have any foot-traffic or outward signs of a traditional business that it was exempt.
hehe, u should duck for that comment,
//runs outsourcing company
just because people are outsourcing to better countries doesnt mean u need a worthless tax refund.
You can also write off capital items like chairs and computers, the a minimum lumpsum per year which you may fall under (makes it easier) otherwise you'll need tax help to figure out amortizations (still worth it).
This happens to me when I work from home. We had a baby in March, and I took the following two weeks off, then worked from home the following two weeks after that.
Many family and friends who came over were in shock and awe about my ability to lay on the couch and work. The comments weren't directed at me, but I could tell they weren't impressed, for they know not what I do (code Java).
My dad is a building inspector, and he gets zoning complaints about illegal dwelling modifications. Some are for bedrooms, and some are for offices. Our city will look into things without a formal written complaint. Any drunk idiot can call in complaints to the city.
Most of the complaints are generated by estranged family members or the "Ex." So if you're going to break zoning law, make sure you're on good terms with all of your friends and family, or just don't invite them over during business hours.
A programmer is a machine for converting coffee into code.
I used to run a limo company from my home, first in Baltimore County, MD, later in Howard County. Customers rarely came to my home; once in a while someone wanted to inspect my vehicle before they hired me for a special event like a wedding, but that was about it.
I had all appropriate licenses and took a home office deduction on my income taxes. The law in both jurisdictions said I could run a business from my home that didn't generate "excessive traffic or noise," which I didn't. So I was 100% legal.
Virtually every shareware developer I know works from home, no problem.
Many graphic artists work from home, no problem.
A majority of the people whose bylines you see on Slashdot work from home either all or most of the time.
Marty Roesch started SourceFire, the "commercialization of Snort" from his home. He was selling/shipping hardware, not just writing software, and he got away with it for a good while. (He has an office now - the business got too big for the house - his wife started getting upset at having boxes all over the kitchen and the sales manager working from a card table in the living room.)
A neighbor of mine across the street installs satellite TV dishes and works from home. Every week or two a large truck comes with a bunch of systems, and he and his son unload them, then the truck goes away. He's probably right on the edge of the law, but I'm not going to complain and neither is the president of the community association, who lives next to us -- and is a computer programmer who does a lot of work from home.
It depends on your neighbors and your relations with them more than anything, I think. If you have clients coming into a ritzy gated community via noisy helicopter 3 times a day, and you have a lot of workers who sit on your lawn and drink beer and get rowdy during breaks, you're going to have problems. If you're in a normal working class community and know your neighbors, and stay fairly quiet, hey! You're working! The worst thing that's likely to happen is that once they realize you're around all the time and that you know something about computers, they'll stop by a lot and ask you lots of Windows questions...
- Robin
What to do:
How to do it:
The first rule eliminates wannabe rockstars. the second one eliminates the production of the number one agricultural cash crop in canada and the us.The third one eliminates any retail sales establishment. The fourth one eliminates a great big sign, like golden arches, or a little sign, for that matter.
Pay your taxes.
Inc Magazine used, and probably still does have a book on the guidelines to starting a business at home.
Wind uder Thy Wings
Amber
Suppose you did.
Suppose you did not.
When I started freelance programming, I really didn't like the idea of working from home. There's just too much isolation from the world, and not enough seperation of work and personal.
Fortunately, I found a few other people in similar situations who felt the same way.
We got together and rented some nice studio space together. We called ourselves the Soup Group, since we're a mixture of everything. To fill the space, we had to convince a few others that they should quit their jobs and go freelance.
Now, 8 years later, we have a great studio, filled with 16 people who like to be around each other. We're an intentional community, not a corporation whose members are decided by the whim of the HR department. There's lots of synergy, as we have programmers, designers, project managers, video editors, animators, and lots of other talents.
We save a lot of money by sharing resources like our boardroom, Internet connections, colour laser printer, fax machine, kitchen facilities, copier, etc. This especially helps people just starting out working for themselves.
Have a look at the Soup studio.
So my advice is to do the same. There are a lot of freelancers out there, and a lot of great studio space. It might take some work to find the people to group up with, but it's worth it in the long run.
I'm in basically the same situation. If it's just a consulting business, then this works great. If they are actually selling a software product, they will probably need a vendors license (at least that's what my lawyer told me). I just applied for my license a week or so ago - hopefully it won't get back to any of the crotchety old people in my association, they have kinds of dumb ass rules.
Usually, homeowners associations cannot regulate the activities inside the confines of your home. They can only regulate the physical appearance and external upkeep.
Zoning restrictions may prevent you from doing things like having employees at your home, keeping inventory of any kind, and other things like daily or even weekly shipping pickup. Zoning laws, however, also usually cannot regulate the activities going on inside your home.
If worse comes to worst, get a co-lo and do your development over your DSL. You'd technically be working from home, with your "employer" being at the address of the co-lo facility. Bam, they can't touch you.
Better idea: purchase a membership to Pre-Paid Legal.
This is a service which costs $26 a month (or less, depending on the state you live in), and allows you telephone access to lawyers for any question, any number of times.
They will write letters and make phone calls for you, for instance if you're trying to collect, or if you need help resolving a dispute. If the issue takes more resources, they have a reduced hourly rate (25% off) so it's worth it even if your problem is not covered for free.
They offer more services, like traffic defense, civil (or job-related criminal) defense, and audit defense; and there's a "legal shield" which is available 24-hours a day in case you're detained by a police officer or security guard.
Yes, I do make money when someone joins, but I use the service myself and it has saved me a ton of money. There's a short movie at the web site if you want to check it out.
They'll even be able to answer your zoning questions for you. For free.
I feel fantastic, and I'm still alive.
The parent is right on target. From everything I've seen, if you know what you want, you can't beat the price/performance ratio of indian programmers. The majority of programmers from that country that I have met have an attention to detail that is absolutely astounding.
However, once you need someone to think, their skills break down. I think the original poster is correct about it having to do with the curriculm. From what I've heard, the majority of thier coursework is rote memorization, whereas most american schools tend to stress problem solving. It's not very often you come across a CS test in the US where it is not open notes or book. It really leads to graduates with two totally different skillsets.
In the end, who you should hire really depends on what you need. Different people are suitable for different rolls.
"To save the planet, I had to go to the worst spot on Earth, and that was Philadelphia." -- Sun Ra
So you'd like to think perhaps, but in reality this is bogus. American programmers are no better (I'm interviewing too as it happens) - but they are the MINORITY of those I interview: the order is Indian-subcontinental, ex-USSR (including those via Israel), Chinese-east-Asian then a variety including American. I assume this is because non-Americans lose their jobs more easily. I don't believe this is for reasons of competance. I don't see any particular association between ethnic origin and competance amongst my colleagues - but there is obvious reduction in communication due to language in some cases.
Quite honestly I expect in the next 10 years the center of gravity for software production shifts to India. It will be diffused via the net of course but in terms of money earned most will end up in India by sheer weight of numbers.
I run my own software company. I am still struggling, but I am going to make about $80-90k this year. Here is the deal.
... I work from home unless I am at the client site!
I have formed a partnership with two Indian development companies. I get the contracts. I meet with the customer. I do all requirements gathering. I do the UML. I manage the project. I do everything except actually write the code.
I send the Indians the stubbed out code generated from the UML, the database as generated from the ER/WIN model and the UML. They send me back a project plan with dates and a fixed bid. The lowest bidder of the two gets the contract.
We have done 3 jobs together this way now -- one for a small software company that was outsourcing its Web Services upgrade to its existing product and two medium sized projects for Fortune 500 companies.
The biggest issue so far is getting the big guys to take you seriously and the background check they put you through to get you on the job. After that, it all comes down to dollars and this arrangement is delivering good code for about the price of 1-2 good developers but it gets done in a fraction of the time.
And
How about, how many bits are in a byte. If the answer is "I don't know", their CS program was a joke. If the answer is "8", then their program might not be a joke. If their answer is "it depends", then they are old. That's a joke, in case you're an idiot. The question though is quite real, and I am surprised at how many people don't know a valid answer.
I bring all this up because I want to incorporate, set up checking accounts, and all that. I order to incorporate, I have to list a business address, and right now it's looking like that'll be my home. That's why I'm asking the zoning question. I want to get this right.
The last freaking thing I need in my life is to get this wrong, and have some bozo at the IRS (or wherever) taking all my personal assets, which is my main reason for wanting to incoporate in the first place.
If you don't want to hear a bunch of sociobabble, stop reading now. :-) I'm going to hide behind anonymous posting because I figure someone will probably take pieces of this out of context and turn them around. It seems to happen the second a sensitive subject comes up around here....
Note that everything that follows is based only upon my experience of human nature, which while based upon a large sampling of people, is not a random sampling thereof, and it is thus not necessarily a representative sample.
Is prejudice bad? Depends. Yeah, that's right, it depends. If someone has a prejudice against a person that legitimately has room for improvement, then that prejudice can push that person to work harder and push through those barriers.
When prejudice becomes a problem is when it goes too far, and rather than pushing them to excel to overcome those prejudices, causes them to give up hope. The word there is oppression, which while related to prejudice, is a bit of a different animal, and unlike mere prejudice, is inherently bad if it is allowed to continue unabated.
The fact is, most prejudices and stereotypes start from a kernel of truth. They are generally blown way out of proportion, and in many cases are based on things that haven't been true for many years (or decades, or even millenia), but they don't generally just start because one person doesn't like another person. (There are always exceptions, however. Let it not be said that I'm overgeneralizing here.)
Now that isn't saying that those stereotypes are right. It is just saying that they are human nature. For example, let's say that a study shows that 60% of geeks have bad hygiene. A random person who reads the study will quickly realize that, given a geek, there's a 60% chance that said geek has bad hygiene, and stay a safe distance. A later study could show that only 5% have bad hygiene, and the stereotype will still stick because, while it isn't true for all the population, it is not untrue for most of the population.
Note that "not untrue" is not the same thing as "true", in this case. By "not untrue" I mean that it cannot be proven across-the-board that it is untrue, whereas "true' would mean that it can be proven that it is true. Something that is "true" is also "not untrue", but the reverse is not necessarily the case.
This distinction is significant. Had the second study shown that 95% of geeks had better hygiene than everyone else, it would have gone a long way towards breaking the stereotype. However because it only showed that 95% were average or better, and 5% were still bad, the stereotype would be likely to persist. The only way to fight prejudice is to make bloody sure that the kernel of truth ceases to ever be true (or very nearly so), and indeed, to overcompensate for it so that people see that it is no longer true.
So this gives you three basic stages of prejudice. The first is the stage where people are prejudiced because the person or group in question exhibits an undesirable behavior (in the perspective of a different group). The second stage is a stage where that group pushes themselves to break the stereotypes, and has to overcompensate. The third stage is where people realize how stupid the prejudice was, and it generally falls out of favor.
The problem is that in most cases, the group or person never gets past