When starting a new business, you might be tempted to save money by using your home address or a PO box as your business address. However, your home or PO box address will not protect your privacy or give your new startup the professional image it needs to thrive.
So, what do you need? This article covers the pros and cons of each business address option and which one is necessary to start your business off on the right foot.
What is a Business Address
A business address is an address that is used to designate your principal place of business. It is where your business is supposedly operating from, but it may not always be the case.
The address is used for communicating with your customers and vendors. It is required in nearly all aspects of business operations such as:
- Opening business bank accounts or merchant accounts
- Registering your business domain name
- Opening accounts with your suppliers and vendors
- Receiving statements, invoices, payments, and bills
- Filing for legal contracts, licenses, and permits
- Communicating with your customers
- Getting your business listed on Google Places, Bing Places, Yelp, Yellow Pages, etc.
What Are Your Business Address Options
Your business address can be one of the three following options:
A home address is the easiest way to get your business started and comes with many conveniences:
- It’s free! You don’t need to pay extra to use your home address.
- You can easily check for mail or receive packages in your pajamas.
- The commute is non-existent saving commuting-related expenses.
Many startups and business owners use their home address as the fastest way to get a business going because the startup cost is lower. However, there are privacy and credibility concerns when it comes to using your home address for your business:
- Banks and merchant services will generally not accept a residential address as a business address for your LLC or Corporation. Normally, they’d like to see a physical street address or real office. There are some specific physical address requirements to open and maintain a business bank account.
- A home address is not professional. With Google Maps and Google street views, everyone can easily find where your home address is located. Your address will not project a professional image when they see that your business operation is a residential home.
- Customers can come knocking on your door. By using a home address you should be aware that customers will be able to access your location. You’ll risk your privacy. There are ways to protect your privacy using your home address.
- Depending on your type of business and your city’s zoning and HOA laws, you may not be able to even run your business out of your home/apartment/condo.
A home address is a valid option if you are a consultant or freelancer, but if you're a business that does not involve selling your own time, using a home address may be viewed as non-credible or unreliable by your customers.
Review these suggestions before you decide to use your home address.
Assess your situation: Before you take a look at the legal side of starting a home-based business, take a look at your own situation to determine whether or not this is the right move for you. Take some time to figure out whether this is the right option for you.
- Can I work and live in the same area?
- Is there enough physical space?
- Is this the right working environment for me?
- Will I have a lot of foot traffic?
- Do I have the setup to accommodate bringing clients or customers into my home?
Make sure you can legally start a business from home: Check zoning laws in your area and ensure your home is “zoned” for business practices.
Get your home office ready: If #1 and #2 are valid you can begin building out your working environment. Here’s a basic list of the things you will need to consider purchasing.
- Computer, laptop, or tablet
- Point of sale system (if necessary)
- Credit card processor (if necessary)
- Business phone system, landline phone, or mobile phone (VoIP if you’re doing a lot of international business)
- Online mailing account (this will let you print mailing labels at home and schedule your packages for pickup)
- Work furniture such as chairs, desk, footrest, etc.
- Office supplies such as a headset, stationary, pens, staplers, etc.
- A printer, scanner, copier, or fax machine (depending on your needs)
- Software for your business such as CRM, accounting, security, and payroll
- Additional equipment specific to your industry
TIP: Invest in a strong internet connection. Also, buy an external hard drive for cloud-based backups of your data.
Legitimize your business operations: It’s important to get the foundation to start a business such as registering your business and creating a website. One of the difficulties of launching a business from home is coming off as credible. While not impossible, you may have to work a lot harder at this than someone who has a separate office. That said, there are a number of things you can do to establish a professional reputation. The first step is to obtain a business mailbox (this will give you a street address and help you get found in search results, and you won’t have to use your home address or an impersonal PO Box). Here’s an article on the 5 Benefits of Incorporating Your Home Address.
Did you know that your contact information filed with your LLC or Corporation is actually publicly available on the Internet? Anyone can go to your state’s Secretary of State website to search and pull up all the filed information for your LLC/Corporation. If you happen to use your home address for your business address, you have just publicly published where you live to everyone online.
Instead of using your home address, another option is to purchase a Postal Office Box, aka PO box, through your local post office.
Essentially, a PO box offers the same basic mailing functions as the virtual mailbox, without the physical address.
If you have simple basic needs for a mailbox service such as protecting your privacy or for keeping an address that you use for mailing address purposes, a PO box is a smart and affordable choice. A PO box is best if you don’t expect much mail volume and if you don’t mind the drive to pick up your mail often.
Here are more benefits a PO box can offer. The address will be in the following format:
PO Box 1234
Los Angeles, CA 90053
Many new business owners make use of a PO box to protect their privacy. Having a separate mailing address adds a barrier of privacy between you and your work. There are certain times when you don't want certain people to know where you live, for example, if you own rental property. You’ll want space between your home and your renters. By getting a PO box, you get another mailing address that you can use for selected contacts and transactions. Senders won’t know exactly where you are.
Having a PO box gives you and your business the benefit of having a fixed physical street address. This is particularly helpful if you travel often or if your business moves, as you won’t have to change your mailing address.
Security is an advantage as PO boxes are located inside an actual post office. Also, the box is locked, so it is only accessible if you have the right key or combination.
Because PO boxes are hosted by the Post Office, mail typically gets delivered faster to a PO box compared to a residential or business address. This is useful if you need to often get mail out the same day.
It’s fairly easy to rent a PO box because it is fairly painless. However, PO boxes have many restrictions and disadvantages for businesses:
- Many states require you to use a physical street address to register your LLC or Corporation. PO Boxes are not accepted.
- You cannot receive any mail or packages from any third-party couriers like UPS, FedEx, etc. You can only receive mail from the US Postal Service. This will severely limit the types of mail you can receive.
- Bank institutions will not accept a PO Box as your principal place of business. This means that you will not be able to use it to open a new bank account for your business or apply for merchant services to accept credit card payments.
- Certain government applications and forms will not allow PO Boxes to be used as your registered address.
- Your registered agent cannot use a PO Box.
- You have to periodically drive to the post office to check if you received any new mail. This results in mostly wasted time checking your mailbox and finding only junk mail inside. Yet, you have to periodically check because you don’t want to miss important checks, invoices, or bills.
- It will not give you the professional image that your business needs to look credible to your potential customers.
Commercial Business Address
A commercial business address offers all of the following benefits needed for a business:
- Provides a real street address
- Offers a professional image
- Protects privacy
- Receives mail and packages from all couriers
- Can be used to register for LLCs and Corporations
- Accepted by banks and merchant services
A commercial business address is an address that is tied to a commercial office location. It is a real street address that can be used for almost all purposes. You can select from a couple of options to be your commercial business address.
- Virtual Mailbox Services
- Private Mailbox Stores
- Virtual Office/Business Centers
- Coworking Spaces
- Commercial Office
A commercial business address allows you to use it to register your LLC or Corporation, which usually requires a physical address, to begin with. Additionally, opening bank accounts will be much easier since you are actually using a commercial location.
Using a commercial business address will give your new business a professional image and will show that you’re serious about your company to customers. This leads to more trust with your customers and more credibility to your startup and business as a whole.
Your address will look more professional as your address will look like the following format:
My New Startup
1400 Market Street Suite 100
Las Vegas, NV 00000
If people searched for your business, it will show a real office or storefront.
Unlike a PO box, a commercial business address can be used to receive mail and packages from all couriers. That means important documents or check payments can be sent to you via FedEx or UPS.
The business address will protect your privacy and personal information from showing up on the Internet or in a public database. You can safely use it for any purpose without worrying about your personal home safety and security.
While the benefits are great, the cost of getting a commercial business address is traditionally high. This is because you usually have to sign a long 1-3 year lease to rent a space that you may not even use. However, there are now other ways to get a commercial business address without the associated high costs and long commitments.
Which Type of Business Address is Right for Me
While a home address or PO box will work for starting your new business, you should seriously consider moving to a commercial business address if you care about a professional image and privacy. If you want your business to look professional a commercial business address will attract more customers and create more credibility, as well as protect your personal privacy and information. In some instances, it may even be required to register your LLC or Corporation or to open a business bank account and will only accept a physical address for your business bank account.
Are You Ready For A Commercial Business Address?
You’re ready to get your business going on the right foot! There are a couple of options that you can select from when it comes to your commercial business address.