Many people start out with a hobby that they eventually turn into a business. But how do you know when your hobby has crossed the line into business territory? Here are a few factors to consider:
If you’re developing a home-based business that is bringing in increasingly significant amounts of income, or if you have invested heavily in equipment or inventory, you should be aware that your personal homeowners’ insurance policy will not provide coverage should a loss occur due to fire or theft. You should reach out to an independent insurance agent to get a quote on protecting your home-based business.
If you’re still not sure whether your hobby is a business, it’s always best to err on the side of caution and treat it as a business. This will help you to stay organized and compliant with all applicable laws and regulations.