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Limiting Home-Based Businesses

Monday, September 30, 2002 at 3:30 PM

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At least one Cleveland suburb is struggling with how to encourage the growth of new companies while preserving quiet neighborhoods. The city of Solon is considering new laws that would limit the ability of home-based businesses to operate. However, some entrepreneurs insist they need to work out of their houses until they're big enough to pay for office space. They also say if the city drives them out other communities will welcome them and the taxes and growth their companies create. ideastream's Mike West has this report on the clash over home-based businesses.

Mike West: This Solon housing development could be anywhere in northeast Ohio. Its streets are lined with modest homes surrounded by well-groomed lawns and woods. It’s so quiet on this hot sunny afternoon that the only sounds you hear are cicadas - and the occasional car. From the street, it’s hard to tell that thousands of dollars worth of business is being conducted inside using computers and telephones.

Andy Birol: And as I’m looking around my neighborhood at some of my neighbors - I’m stunned at how many folks are operating some kind of home-based business.

MW: Andy Birol is the owner of Birol Growth Consulting, a company he runs out of his house. Birol has several major corporate clients and is growing fast. He feels the city doesn’t appreciate the money his company and others like it bring to Solon. Birol says the community should nurture people like himself, who lost corporate jobs and work from home, instead of making rules that will hamper profits and growth.

AB: Just across the street we have someone that started a dot-com networking business - he was a executive with a very large local manufacturing firm, and as we walk toward the cul-de-sac, I know that three doors down from me somebody that runs an executive search, Headhunting firm that’s out of his home. And I know that around the back of the cul-de-sac is someone who works as a freelance writer graphic designer that has clients that include some of the area’s largest hospitals.

MW: Companies that start from home are becoming more popular. They greatly cut costs. Computers and the internet allow entrepreneurs to provide services like never before, from any location. But Birol and others now wonder if they will be able to stay. The Solon City Council is drafting laws that could greatly limit the growth of home-based companies.

AB: It seems as if some folks want to see small businesses kind of either get nipped in the bud, or be forced to make large commitments to either real estate leases or rents or something whether or not they need that or not and whether or not it’s in the best interest to their business or their customers.

MW: There are already laws that prevent residents from doing things like opening retail stores out of their house or setting up an auto shop in their garage. Both sides agree these rules are needed. However, the City Council is considering ordinances that include only allowing 3 to 4 customers and deliveries per day and not letting customers park on the street in front of houses in residential areas. City Councilman Ed Suit.

Ed Suit: I think the guiding principal and this is of most importance, is that I don’t think a home occupation ought to change the residential character of an area, and if it doesn’t it has no impact on the residential neighborhood.

MW: Councilman Suit insists home-based companies that operate silently and behind closed doors will never be bothered. He says even if strict rules are put on the books, in most cases they won’t be enforced.

ES: Whatever ordinance we ultimately pass it’s going to be a complaint-based enforcement. This is not like police going out and enforcing traffic laws, and setting up a speeding trap or seeing if people stop at stop signs. We are forming a home occupation hit squad to go out and try to determine who is doing what inside their residence. The enforcement will be complaint based.

MW: But business owners are uncomfortable with laws that could be enforced on a whim. President of the Solon Chamber of Commerce is Tom Wasson. He feels the city’s idea of limiting customers isn’t right because friends could come over it constantly, while customers would be forced to sneak in the backdoor. And Wasson says barring non-family members from helping out isn’t fair because someone with a family could have plenty of extra hands, while a single person wouldn’t and couldn’t. When the issue first surfaced, wasson wanted to help draft or alter laws to help small companies, not enter negotiations with politicians.

Tom Wasson: Our idea was to make it such that a person with an idea but very little resources could do - incubate a business out of his house, which then outgrows the house, would then move into the commercial district, if you will them hopefully become the next world headquarters and that would of course be in solon, that would be our idea.

MW: Wasson warns city leaders that if they discourage home based businesses it will send a “keep out” message to entrepreneurs who want to live and work in the city.

TW: It would be foolish in this economic time to legislate against the attraction of businesses. Everybody is trying to attract ‘em - why would a city purposely legislate against that? I frankly don’t understand it. I think you would want to increase your tax base any way possible and this is the future. And there are going to be many, many ideas that we can’t even think of that can come out of the technology that’s available today. And we were trying to welcome that, allow for that and not to say that we can even think of what these businesses are that’s what the american ingenuity has always created and thrived on.

MW: Ironically, the second largest employer in Solon started as a home-based business. Beauty products giant Matrix Essentials was founded in 1980 when batches of hair goo and shampoos were mixed up in Arnie Miller’s garage. Wasson says if the proposed new laws were in place back then, Matrix would not have been allowed to grow into the company it is today, at least not in Solon. The city plans to hold a public hearing on the home-based business ordinance question on October 7th. In Cleveland, Mike West, 90.3.

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