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Forum topic by Stewbot posted 08-25-2015 12:53 AM 1268 views 1 time favorited 11 replies Add to Favorites Watch
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Stewbot

195 posts in 549 days


08-25-2015 12:53 AM

I am currently in the process of obtaining a business license so that I can legally make business transactions within my city limits (craft shows as well as wholesale to local business will be my main objectives and both require a business license, just to clarify I will not be selling from home, but operating from my home). I am currently researching/working within my cities specific guidelines to answer my questions etc. however, I also wanted to throw this topic out there for anybody whom legally operates a woodworking business from their home. Whether it be a full time business or a part time extra income type set-up, (mine will be the latter) I am just seeking some extra insight and thoughts from those who have done it and the guidelines you had to follow in your area. Especially in regards to the actual manufacturing process of goods from home.

Part of the application asks about whether I will be storing flammable liquids as well as whether I will be creating dust. As you can already assume, I obviously will be checking these boxes. Because the application process takes several weeks to go through (even then more paperwork might be needed), I’m anticipating these two parts of my application will involve some extra type of logistic to work through, if not de-rail my plans to become licensed.

what I am inquiring about to the forum is if anybody who runs a home-based woodworking business, who legally engages in business transactions, can tell me a little about their expiriences with this sort of thing and what type of logistics they had to square away before becoming licensed. Of course I understand that these guidelines can vary tremendously throughout different cities and I am only asking for some general information about others expiriences and logistics encountered. Specifically, I am concerned about the storing of flammable liquids as well as creating dust, and the type of red tape I might encounter regarding these factors.

Any thoughts or insight would be appreciated.

-- Hoopty scoop?


11 replies so far

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WoodNSawdust

1417 posts in 641 days


#1 posted 08-25-2015 01:12 AM

When I created an LLC the attorney listed the company’s description as something as Computer consulting and any other legal activity. This is what I used when I applied for a city business license. There were no other forms or questions. So when I expanded into woodworking as a part-time business everything was already in place. I guess I am fortunate that I started in IT instead of woodworking.

Make sure you are specifying woodworking and not some form of contracting / contracting. The latter is a much more complex requirement and will require you maintain workers comp on yourself.

You may also want to create a Limited Liability Company (LLC) to shield your personal assets from liability if someone were to sue your business. The standard sole propertership does not offer this protection. You should be able to sign onto your state’s secretary of state’s web site and do the application online. As I did (above) keep the description of the work preformed as generic as possible.

-- "I love it when a plan comes together" John "Hannibal" Smith

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Yonak

979 posts in 986 days


#2 posted 08-25-2015 01:12 AM

Jeez .. California !! Here in Georgia I only had to go to the municipal building, fill out a single page form and pay. They asked me what is the nature of the business, I said “woodworking,” and they printed me the license. They also charged an extra $125 because the business is in my home instead of a commercial building or something (please tell me the reasoning behind that). ..Sorry I can’t help in dealing with California.

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Yonak

979 posts in 986 days


#3 posted 08-25-2015 01:16 AM

You may also want to create a Limited Liability Company (LLC)...

- WoodNSawdust

WNS, do you have to file two income taxes, figure out how much you’re paying yourself and have workman’s comp and subject to OSHA and all that ?

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Stewbot

195 posts in 549 days


#4 posted 08-25-2015 01:57 AM

WoodN,

Thanks for the tips, ive been researching an LLC over the standard SP and of course it’s the safest route. My situation is so small-time that it’s seems to be overkill but I hear you, you can never be too careful.

Yonak,

I appreciate the response regardless. If I hear anymore responses like yours, it may just seal the deal for me heading east. In the unincorporated parts of San Diego county, a sellers permit (issued through CA BOE, which I have and was very easy to obtain) is just fine for shows etc. However the city of SD and other SD county cities is where I’m running into more guidelines.

I expect to have to pay some sort of extra fee for the whole sawdust and flammable liquid storage and needing to comply with certain regulations, but I’m also very concerned they basically won’t allow it in a residential area.

Anyway, thanks for the responses. In due time I should know for sure.

-- Hoopty scoop?

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buildingmonkey

242 posts in 1012 days


#5 posted 08-25-2015 02:18 AM

Think I would switch to water based finishes so you do not have to list flammable liquid storage. Gov is touchy about that, fire prevention,air pollution etc. And hope you have a cyclone so you are not exhausting dust from your shop.

-- Jim from Kansas

View woodworkingdrew's profile

woodworkingdrew

189 posts in 1074 days


#6 posted 09-15-2015 11:44 PM

Few years back I posted on a similar topic. Things you have to consider: NOISE, dust pollution, storing hazardous chemicals, customer parking and the like. Hopefully your neighbors are cool. After reading a lot of craigslist adds, I see people selling equipment due to pissed off neighbors. Good Luck!

-- Andrew, California

View Jim Finn's profile

Jim Finn

2413 posts in 2387 days


#7 posted 09-16-2015 12:53 PM

When I lived and worked in California, in the century past, I saw a lot of metal flammable liquid cabinets in the manufacturing plants there. I imagine that is what you will need in which to keep your flammables. I have a license, here in Texas, listed as a “manufacturer”. I make and sell small wooden ,crafty items.

-- "You may have your PHD but I have my GED and my DD 214"

View DrDirt's profile

DrDirt

4169 posts in 3207 days


#8 posted 09-16-2015 02:38 PM

Talk to an insurance agent as well – - because if you use your tools comercially…(make stuff to sell) then if there is a fire or burglary – - your shop is NOT covered under homeowners insurance.

-- 'Political correctness is fascism pretending to be manners' ~George Carlin

View WoodNSawdust's profile

WoodNSawdust

1417 posts in 641 days


#9 posted 09-16-2015 03:48 PM



You may also want to create a Limited Liability Company (LLC)...

- WoodNSawdust

WNS, do you have to file two income taxes, figure out how much you re paying yourself and have workman s comp and subject to OSHA and all that ?

- Yonak

No my accountant does the long 1040 form along with a bunch of additional forms. I don’t pay myself a salary I just take profit so no taxes till spring. Missouri does not impose a requirement for me to have insurance (workman’s comp, etc.) but the local municipality will IF I were to declare the business as a Home Repair business. Fortunately, I started it as a Computer Consulting business and use the “and any other legal …” to cover the woodworking.

-- "I love it when a plan comes together" John "Hannibal" Smith

View daddywoofdawg's profile

daddywoofdawg

1010 posts in 1040 days


#10 posted 09-16-2015 05:12 PM

If your not selling from the house,i.e people coming to shop,I think your better off flying under the radar.You’ll have to have inflammable cabinet to store flammable liquids,(inspected by fire dept.)a disposal plan (some form of the EPA),Zoning unless your in a commercially zoned area.saw dust disposal plan,etc.plus hrs of operation,may have rules of when you can operate,A home/hobby business you can work late at nite as long as your not Ping off the neighbors.They have req. the cr@p out of home business to the point they want you to fly under the radar.Also you’ll have to get commercial liability insurance,probably 1m+.Plus you can’t have someone just come over and lend a hand and kick them down a few bucks,Now you have to have payroll,pay payroll taxes,put up a sales tax bond and do monthly paperwork for the state for same.

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Yonak

979 posts in 986 days


#11 posted 09-17-2015 04:23 AM



WNS, do you have to file two income taxes… ?

- Yonak

No, etc….

- WoodNSawdust

Thanks for the info.


Talk to an insurance agent as well – - because if you use your tools comercially…(make stuff to sell) then if there is a fire or burglary – - your shop is NOT covered under homeowners insurance.

- DrDirt

I have a rider on my homeowner’s insurance policy to cover my home-based woodworking business.

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