How Regulations Affect Your Home-Based Business

The artisan soap industry has grown steadily over the last few decades, and for some people it’s become a very profitable home-based business. Unfortunately there are some congressmen who are trying to pass legislation that could force many soap makers to close their businesses.


The proposed law would require the FDA to issue a large new regulatory regime on soaps and cosmetic products. All these products would have to go through several tests and use warning labels, and companies would have to pay large fees before their products could be marketed. For the multinational corporations that produce shampoo, soaps and other products, these costs will be relatively small, but for many home-based businesses, the new costs and fees will be insurmountable.

Though no law has been passed yet, many in the homemade and artisan industries are worried that this will prevent people from selling high-quality homemade products and will keep these products away from the consumers who want them. As with many other types of home-based businesses, business owners must keep themselves updated regarding all types of regulations and legal requirements. If they don’t, they could find themselves facing large fines and serious penalties.

Regulations and Compliance for Home-Based Businesses

Because it can be difficult for a new business owner to understand every requirement and regulation, it can often be easier to buy a home-based franchise. When you buy a franchise, the franchisor will provide you with all the resources you need to legally start the business. If you need a special license, the franchisor will let you know and may even help you get it.

For example, individuals will need an IATA number before they can book flights as a travel agent, and they will also need a brokerage registration if they want to become a logistics broker. Becoming part of a large franchise can help you make sure that you are completely in compliance and operating within the law.

Other Sources of Risk for Home-Based Businesses

Though you may believe that a home-based business has a lot less risk than starting a brick-and-mortar business, it does not mean that there is no risk at all. Any time you start a business there will be a level of risk that you take on. The regulatory risk can be handled by learning about legal requirements and regulations, but you will also want to purchase liability insurance for your business. This can protect you if something goes wrong with your business or products and you cause injury to one of your customers.


When you start your business you should immediately get the assistance of a lawyer and an accountant. They can help you make sure that you are covered in terms of liability and legal requirements, and they can also review any franchise agreements or other documents which will help you determine if buying a franchise is right for you. With professional help, whether from a lawyer or a franchisor, you’ll be able to reduce your risk and start your business completely legally.