When a regular person goes beyond DIY and begins making stuff to sell as we have seen here with warbonnet and stormcrow and i am sure others what does it take to become a "business" ? Does one actually get a business license or just run a normal online deal without worry about the tax portion until they are as big as someone like the jacks?
I guess this is a question for all the gear makers out there and maybe even a few of the legal eagles.
I would say go grab a business license just to be on the safe side....prob only around $ 30 depending on where you live and you will be covered
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I work with a lot of small businesses to manage liabilities among other things.
If you are manufacturing and selling gear, or giving it away, then in the name of all that you hold holy, do it in the name of an LLC or similar entity.
or else...
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A CPA and an attorney would be better people to ask than HFers.Originally Posted by tomsawyer222
+1 for the LLC... but you can get started cheap as a Schedule C sole proprietor. I suggest getting started with a CPA. Your CPA will tell you to get a sales and use tax registration with your state. Just keep good records and see if you can develop cash flow before spending money on the trappings of business.
BTW, be sure your accountant is a CPA, and have them do all of your taxes. If you get audited, they will represent you.
- MacEntyre
P.S. After 25 years of self employment, I am more concerned with the IRS than liability...
- MacEntyre
"We must, indeed, all hang together or, most assuredly, we shall all hang separately." - Ben Franklin
www.MollyMacGear.com
So when you say check your cash flow before getting the trappings of a business you mean try to sell things limitedly and see how it works then go for a license? Or do you mean get things legally situated and wait on getting advertisement and such?A CPA and an attorney would be better people to ask than HFers.
+1 for the LLC... but you can get started cheap as a Schedule C sole proprietor. I suggest getting started with a CPA. Your CPA will tell you to get a sales and use tax registration with your state. Just keep good records and see if you can develop cash flow before spending money on the trappings of business.
BTW, be sure your accountant is a CPA, and have them do all of your taxes. If you get audited, they will represent you.
- MacEntyre
P.S. After 25 years of self employment, I am more concerned with the IRS than liability...
Not to speak for MacEntyre, but for me it was use what I had around me, spring only for necessities, try to keep your overhead as low as possible so you can build from your cash flow rather than work to pay your debt.
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More start-ups fail from lack of operating capital than any other cause. You can self-capitalize or borrow for start up capital. The first is in my view preferable. But it presents a limited pattern of growth without breaking the bank.
By all means I would pay attention to the legalities before the liabilities. At least within reason. Obviously you need to have a solid product which can be safely used within reason. But if you neglect the legalities you are much more likely to end up behind the eight ball.
I may be slow... But I sure am gimpy.
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Don't sell anything on a limited basis... sell as much as you can!
A license? What's that? Making gear is not a licensed business activity in our town. If you get a retail storefront, you might need a local business license.
Make your product and sell it. Don't spend money; just make money. Worry less about becoming a business and focus on bringing in cash at the least expense.
Years ago, an MBA friend of mine said that in school, everything was about finance, but after working for a while, he found that everything was about cash flow. Maximize revenues, minimize costs, and don't borrow money. Your business will finance itself from it's cash flow.
I still think this is the wrong place to ask these questions. You should find a good CPA and buy him lunch!
- MacEntyre
- MacEntyre
"We must, indeed, all hang together or, most assuredly, we shall all hang separately." - Ben Franklin
www.MollyMacGear.com
VERY good advice. Avoid debt!
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Yeah i know that this is not the best place but i was hoping to draw from the experiance of those who have done it right here. There are a ton of people who operate a small cottage business right on the forums i was wondering if they had any direct advice on how they did it.
Also yo have alot of people who are running a buisness of there own and may have a word of advice or something they got wrong to avoid.
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