Starting a Business

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Blog entry by Tim Suess posted 12-13-2008 08:07 PM 821 reads 1 time favorited 2 comments Add to Favorites Watch

I have been woodworking my entire life, the whole 18 years of it haha, and I have the skills to design and build quality projects. SO i want to put those skills to work and make some money by starting my own very small business. Just generate enough profit to act as part time income for a full time college student. Just looking for a bit of help with some of the finer financial points of starting a business. I am wondering what markup should be on projects. Obviously you add cost of materials, time and overhead but what should profit be? I am interested in an LLC for my business structure I am wondering how taxes work and if I need to charge sales tax on my products? I have been going over and like website and the many article on LJ for help. Thanks in advance for your input!

-- T. Suess

2 comments so far

View Todd A. Clippinger's profile

Todd A. Clippinger

8901 posts in 3523 days

#1 posted 12-13-2008 08:51 PM

If you are attending college as a business major then you should be in the right spot to have a wealth of information pertinent to your locale.

The Small Business Administration in your town is the perfect place to start. may be more generalized when it comes to information.

I took several free classes from the SBA here in Billings. The SBA really is going to tell you the same things that you are learning in school but they may give you more direct information for what you want to do.

If you have sales tax in your state then the answer is “yes you have to pay sales tax.” When I work in Ohio, I pay taxes according to Ohio for the sales I make there and at home in Montana life is easy because there is no sales tax.

The SBA will help you determine the mark-up and help you understand how to figure it all out.

One of the LJ’s had been posting a business start-up blog and here is the link:

I could type the exact same thing he did but the work is already done.

Good Luck-

-- Todd A. Clippinger, Montana,

View Peter Oxley's profile

Peter Oxley

1426 posts in 3298 days

#2 posted 12-13-2008 09:04 PM

Tax laws differ from state to state. Here in Idaho … if I will be permanently installing the project in the building (cabinets, built-ins) I pay sales tax on materials, and do not charge tax on the finished, installed product. If the product will not be permanently installed (furniture, etc.) I don’t pay tax on materials, and I do charge tax on the finished product. If the item will be permanently installed, but I’m not doing the installation, then I do charge sales tax. It’s confusing. What’s really confusing is when I over-purchase for a cabinet job and pay tax on materials, and then use the extra materials to build furniture! Selling out of state is a whole different set of rules.

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