BUSINESS · CANADA & U.S.

Starting a small business at home

Most home businesses start before anyone registers anything — a first customer, then a second. These are the steps that keep it legitimate, insurable and easy to file at year end.

Last reviewed 23 September 2026.

Decide the simplest structure that works

Most home businesses start as a sole proprietorship: quickest to set up, simplest to file, but you are personally responsible for the debts and liabilities.

Incorporating adds cost and paperwork, and brings liability protection and sometimes tax advantages. It is usually a decision for once there is real revenue, not before.

Register and licence properly

Check three levels: federal or national registration and tax numbers, province or state registration, and municipal business licensing or zoning rules for operating from a residence.

Some residential leases and condominium rules restrict running a business from home. Read yours before you advertise the address.

Money, from the first sale

Open a separate bank account. Keep every receipt. Record income the day it arrives. Set aside a percentage of every payment for tax so the first bill is not a shock.

Track which expenses are genuinely business ones, and keep the evidence. Home office, mobile phone and vehicle costs are often partly deductible, and the rules on how you split them are specific.

Protect yourself

Talk to your insurer about business equipment, stock and liability, especially if customers visit. Use a written agreement for anything substantial, even a short one.

Keep customer information to the minimum you need, and keep it secure. Privacy obligations apply to small businesses too.

Run it like a business

Keep one list of what you sell and what it costs you, one list of customers and what they owe, and one calendar of filing and renewal dates.

My Businesses in HAUSINE holds exactly this: what you offer, your people, your compliance dates and your documents, so the year-end is a review rather than an excavation.

Common questions

Do I need to register a business to work for myself?

It depends where you are and what name you trade under. Many people can operate as a sole proprietor under their own legal name without registering, but a business name, certain trades and some municipalities require registration or a licence. Check your province, state and city — all three can apply.

What records should I keep from day one?

Every sale, every business expense with a receipt, mileage if you drive for work, and a separate bank account so business and personal money never mix. This one habit saves more money at tax time than any other.

Do I have to charge sales tax?

Only once you cross the registration threshold or rule that applies to you — in Canada that is usually GST/HST registration; in the United States it depends on the state and on where your customers are. Check before you invoice, not afterwards.

Does home insurance cover a home business?

Usually not, or only minimally. Most home policies exclude business equipment, stock and any liability from customers visiting. Tell your insurer what you are doing and add coverage — it is generally inexpensive compared with the exposure.

Official sources

Registration, licensing and tax thresholds differ by province, state and municipality. Confirm your own obligations with the official links below before you trade.