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 a professional image it needs to thrive. A real commercial business address 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 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 bank 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 Types of Business Addresses Are There?
Your business address can be three of the following options:
- Home address
- Postal Office Boxes (PO Boxes)
- A commercial office or location
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 you look at 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.
- 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. If you receive an angry customer they may be banging on your door often and easily.
- 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.
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 as non-credible or unreliable by your customers.
Did You Know?
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. PO Boxes are always located within physical post office. The address will always 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. It’s also 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 address. 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.
- 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 an important checks, invoices, or bills.
- It will not give you the professional image that your business needs to look credible to your potential customers.
A commercial 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 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.
A commercial 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 address will give your new business a professional image and will show that you’re serious about what you 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 store front.
Unlike a PO Box, a commercial 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 address will always 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 address are 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 others ways to get a commercial 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 street address if you care about a professional image and privacy. If you want your business to look professional a commercial street 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.
Is Your Company Setup Correctly?
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