Tuesday, August 23, 2011

Making Crafting Profitable - Part 4

You've done a business plan of sorts, picked out a name, now its time to start talking licenses.  The one piece of paper you will definitely need if your state charges sell sales tax is a resale number.  In California you can get one by going to the Board of Equalization and filling out a small form.  Depending upon where you plan to sell and how much there may or may not be a deposit required.  I didn't have to put one up when I got mine, but that was so long ago, that I can't guarantee that is still the policy.  Don't of a BOE in your state.  Go to your states website in California it would be CA.gov, for other states it would be the 2 letter state abbreviation dot gov.  There are usually links you can click on that will take you to information for starting a small business in your state.

But wait, there is more.  Will you have employees or will you be the only employee.  If you don't plan to hire anyone then you don't have to have a Employee Identification Number from the IRS, you can use your social security number.  If you do plan to hire employees you will need an EIN.  You may also need a State EIN (different states call it different names so check with your state).

Now you  need to check with the city and county you live in. You may need any or all of the following: a city / county business license, an okay from the city / county to run a home based business, proof of filing a fictitious business name statement in a local paper (most banks require this in order to open a business checking account.) a business checking account, agreements signed by any close neighbors stating they do not oppose your operating a business out of your home.  Some of these will not be necessary if you are planning to run a  brick and mortar store front.

If your full name is part of your business name you probably won't need to file a fictitious business name statement. (ex:  Jan Smith's Crafts).  And in most locations if you are running an internet business with no customers coming to your home to pick up merchandise you may not need a city / county business license.  If your local bank won't let you open a business account without the fictitious name filing, you can always open a second checking account dedicated strictly to your business.

Every state, city, county has different rules and regulations so you will need to check with yours to decide what you will need or not need as the case may be.  Also rules will vary with the type of business you are running.  Will people be coming to your home, will you be selling at shows, festivals, swap meets, will you have a brick and mortar store front, will you be selling exclusively online, or will you have a combination of some or all of these.  You need to decide now so that your not blindsided down the road with the need for a license you did not get.

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