LumberJocks

Questions regarding opening a woodworking shop.

  • Advertise with us

« back to Sweating for Bucks Through Woodworking forum

Forum topic by SugarbeatCo posted 03-13-2012 09:25 PM 2107 views 1 time favorited 32 replies Add to Favorites Watch
View SugarbeatCo's profile

SugarbeatCo

126 posts in 906 days


03-13-2012 09:25 PM

Topic tags/keywords: need help question resource business start up

Let me start this post by thanking you in advance, as this is sure to be long and confusing. My name is Courtney, and I am trying to start my own woodworking business. I’ve just returned home from a runaround adventure of trying to procure a business license in this red tape state of California. I’m working out of my dads rented garage which may or may not be a permitted building, with wiring, which I’m sure, isn’t up to code. The first question they ask is where you will be running the business. They informed me that I would need to talk with the planning department and they would need to send out an assessor, the EPA, and we would have to have a signed written letter from the landlord, and a scaled blueprint with all building locations, parking and setbacks, sewage disposal systems, wells, the road providing access to the business, and the parking area for the residence and business.
All I am trying to be able to do is legally sell my housewares and crafts, both at local markets and craft fairs, online and possibly a few local stores. With this being said. I only plan to be in California for the next year or so, and I am having a hard time justifying spending 400 just to have the assessor’s and EPA out. I guess my question is: Has anyone dealt with similar circumstances, is there anyway we can get around this without creating problems for my dads landlord? I started this thing with a carving knife, and have been pedaling my wears on etsy, now I have just about every tool a woodworker could want and am trying to take it to the next level, but its feeling so impossible. I certainly wouldn’t expect my dads landlord to sign a written letter allowing the county assessor to come and mark up all of his un-permitted buildings and the shady electrical system. What can I do? I’m eating rice for weeks on end trying to get this thing off the ground. I’ve just graduated high-school, trying to get myself in college, I’ve got health issues that prevent me from getting a 9-5, (IE Chemo every 4 weeks), and it seems to me that it is actually easier to just give up, sign up for state funding and live off this system to get myself through college. WTF is wrong with this state?
Any advice is appreciated, just feeling really discouraged and like the damn system just does not want me to succeed. Thank you again for your time and any advice, and sorry if my post seems more a rant than anything else. I don’t have any mentor or anyone to ask otherwise. Courtney

-- Always one more tool away from being an excellent woodworker...


32 replies so far

View cabmaker's profile

cabmaker

1311 posts in 1446 days


#1 posted 03-13-2012 09:38 PM

Sorry to hear about this problem. Only sound advise I can give you is move away from california, the gold rush is over now anyhow. But I gotta ask, If you have already had sales, whats the reasoning for stepping it up a notch now by invlolving the local gov.? Are you just expanding your sales, or are you just wanting to do your civic duty? Will you be able to keep it up once you start collage ? I wouldnt encourage you to live off the system as you suggestted. There are other ways but without knowing more about the situation, well its just talk.

View SugarbeatCo's profile

SugarbeatCo

126 posts in 906 days


#2 posted 03-13-2012 09:48 PM

Yes, as mentioned I am wanting to be able to have a booth in local trade and craft fairs and sell my things legally at as many venues as possible. I would also like to separate my income with my business’s income and expenses. And please dont mistake my saying that I want to live off the system, I certainly do not. I was mentioning that is actually easier to do. I’ll be moving to South Dakota soon, but would like to procure as many sales avenues here in california as possible before leaving, so I may export from SD for supplemental income. If there is any information I have left out, Im sorry, and would be happy to answer any questions. I live in Nevada County, with my shop located outside Grass Valley city limits, but wish to sell everywhere.

-- Always one more tool away from being an excellent woodworker...

View canadianchips's profile

canadianchips

1831 posts in 1635 days


#3 posted 03-13-2012 10:00 PM

Different states have different laws. I am NOT familiar with California laws , with that said, there might be exemptions that allow for small business to start up without breaking the bank.
Having a business licence might have benefits though. “Insurance being one of them”
Keeping your company seperate from personal might be a good thing as well.
Talk to other people at craft shows, see what they are doing .
I am only offing some hints to what may work.
I have looked at the work you do. It is very GOOD ! Please don’t get discouraged easily. Hope This works out for you !

-- "My mission in life - make everyone smile !"

View crank49's profile

crank49

3381 posts in 1608 days


#4 posted 03-13-2012 10:53 PM

As said above, some of us, me included, are not familiar with California law, but I think the problem of becoming a real business entity is similar all over, just not so stuck up the EPAs poop chute as The People’s Republic of California.

Twelve years ago I started a business in Tennessee and you have to decide whether to incorporate or not, then get state resale tax number, city business liscense, get an appraisal for personal property used in business to pay property tax on that, and on and on. Most of it is just a bunch of crap some “government leaders” came up with to make money to provide services and to buy votes with.

Be aware that when you make the jump, your insurance will likely be canceled. You will have to buy business insurance which is way more expensive. But, if there was a claim filed right now and the insurance company could prove you had made stuff for sale they likely would not pay it anyway.

Welcome to the world of small business. I often wonder why I fight this battle, but maybe I just love the challenge.

-- Michael :-{| “If you tell a big enough lie and tell it frequently enough, it will be believed.” ― A H

View a1Jim's profile

a1Jim

112030 posts in 2215 days


#5 posted 03-13-2012 11:44 PM

I’m not a lawyer so don’t consider what I have to say as legally correct only a licensed attorney can give legal advise.
If I were in the same situation I would make the things I want to make and not call myself a business as far as the local authorities are concerned, As far as anyone knows this is your hobby,That’s what I would do if any officials came knocking on my door ,If they refer to your investigation on becoming licensed tell them the truth that after checking it out you gave up the idea of going in business. IRS is a different animal if you make money then pay your fare share and call yourself a business. This approach is done every day because of unfair zoning laws and bureaucratic rules. My father-in-law made doors and windows for 60 years in California every couple years someone from the state would come by and tell him he needed a contractors Licence every time the did my father-in-law would say no I don’t I’m a manufacturer not a contractor. If for some reason the county/city says your in business and take some action chances are it would take them much longer to shut you down than your going to be there. If I was thinking of having employees that would be a whole different thing, where big fines could be imposed not having insurance and proper safety equipment. Once you move you might have a better idea about what your going to make is profitable or not and you can get set up according to local South Dakota rules. There are thousands of people through out the US that work out of there garage who don’t have proper zoning,permits or approval for what they make, an chances are the majority never will have a problem with cities or counties because it’s not that big of a deal. Unfortunately the people who want to play by the rules and inquire about the right way to do things are the ones who get hammered. Just for the record I’m properly licensed and zoned in my two business in Oregon.

-- http://artisticwoodstudio.com Custom furniture

View Howie's profile

Howie

2656 posts in 1561 days


#6 posted 03-14-2012 12:12 AM

The sad part of this is, that the people that are trying to be honest and play by the rules are the ones that end up with the shaft.
Our “politicians” get on TV and encourage people to be enterpreneurs(sic) but they make it such a problem you wonder if it’s worth it.
Good luck to you, maybe the Dakotas are a little more linient.

-- Life is good.

View Don W's profile

Don W

14924 posts in 1205 days


#7 posted 03-14-2012 01:42 AM

I agree with canadianchips. Find out what others that do the same thing are doing. I’m a long ways from California, but have seen very similar issues. Seek advice from the local. The theory of “for the people, by the people” went out some time ago.

-- Master hand plane hoarder. - http://timetestedtools.com

View Loren's profile

Loren

7467 posts in 2285 days


#8 posted 03-14-2012 01:49 AM

Buy and read “Small Time Operator”. You’ve already got yourself
into a situation. Read “Working at Woodworking” as well.

Some entities will want to know where your “place” of business
is. Well, if you tell them it’s where you sell your work… e.g.
craft shows in a broad region some of your headaches with
local regulation may disappear.

-- http://lawoodworking.com

View Grandpa's profile

Grandpa

3108 posts in 1313 days


#9 posted 03-14-2012 01:55 AM

I can sympathize with you. I was born in California and I never had a state issued birth certificate until 2005. I had a hospital certificate and until recently that worked. I was 2 years getting a certificate from the state only to find that my last name was not spelled correctly. My dad’s name was correct but some well meaning soul used a fountain pen to make a mark to the margin and add an extra letter to his name to make it like mine! Long story but it took me 5 years and an congressman to get the certificate with a correction. Then I had to decide if I really wanted to send it off and get a passport.
I would make the products you want and go on. I tried to get city permits from a town in Illinois so I could finish a basement room for my daughter. They drug their feet for months. She finally picked up the paperwork she had submitted and we moved forward. I really think they wanted me to go home and have one of their local contractors do the work but it didn’t happen that way. Sometime you have to do what you have to do. Personally I would try to move before the year is over. Good Luck!

View JAAune's profile

JAAune

777 posts in 954 days


#10 posted 03-14-2012 01:55 AM

I think A1Jim has a good idea. Instead of trying to run an actual business take the time to create the infrastructure and refine the design and production methods of your intended product lines. Sell your things online and at shows to start with. Starting a relationship with local stores would be a good thing but it’ll take some time and you’ll probably be about ready to move out by then anyhow. If you intend to spray finishes, stick with water-based products to avoid violating EPA regulations.

I’m currently organizing a business of my own at the moment and I expect the startup process to take around 3 months. Illinois isn’t too bad when it comes to regulations for a small woodshop with no employees and I expect South Dakota is even better (Chicago has a negative impact on the entire state over here). It would take me longer than 3 months if I didn’t already have most of the needed skills and equipment.

I recommend taking the time to create a business plan and a marketing plan. The process of doing so will help you determine exactly what it is you want to do and give you a rough path to follow. If you want more information let me know and I’ll post links to the various sites I’ve been mining information from.

Also, I highly recommend learning how to setup and run a website. It’s not nearly as difficult as it used to be and most young people are familiar enough with computers to pick up the needed skills quickly. Even though you intend to sell mostly through retail outlets, Etsy and shows, a good website is critical to have these days. You’ll want to attract potential customers to your website then link them to the stores and Etsy pages that sell your products. I can give you some direction on this as well if you need it.

Get a decent camera and learn to take really good pictures. A mistake I made in the past was to neglect taking photographs of my work in progress. The finished products often didn’t get shot either and if they were, the photos looked amateur. Since you’re going to do small projects, there’s no excuse not to get good pictures in this day of digital photography.

-- See my work at http://remmertstudios.com and http://altaredesign.com

View HalDougherty's profile

HalDougherty

1820 posts in 1875 days


#11 posted 03-14-2012 02:43 AM

You have my sympathy for the trouble you are having trying to get legal. Here’s a couple of reasons why I enjoy a very small woodworking operation. Some areas of the country make it much easier to start and run businesses. South Dakota is especially nice to new businesses. I harvest timber from my own woods and saw them into the lumber I use to make products for sale. I can qualify for a farm license but all it would be used for is to buy equipment used in the farming operation without paying sales tax. I’d rather pay the sales tax than deal with the record keeping. I can build a building on my property to sell my crafts and farm produce and I don’t have to collect sales tax. That sure makes it easy to do business in Tennessee.

I looked at your Etsy site and your products should sell very well at craft fairs and on the Internet. Keep us updated and let us know how your regulatory issues are resolved.

The bottom two paragraphs are just part of a larger document from a Tennessee Govt. website. I pay sales tax on everything I buy and only sell products from my farming operation. It’s been a family business since the 1800s when it was a working farm. We stopped raising cattle and cash crops, but we’ve never stopped selling our hay, so now I’m harvesting grass and trees and selling the processed products of my farm.

————————————————-

49. Are farmers and nursery operators who buy and sell agricultural products, including livestock, required
to present the certificate of exemption to buy agricultural products, including livestock, tax exempt or obtain
copies of purchasers’ exemption certificates to sell agricultural products tax exempt?

No. Agricultural products grown and produced by a farmer and purchased directly from the farmer that grew or produced the agricultural products are not subject to sales or use tax. The farmer is not required to obtain the Agricultural Sales and Use Tax Certificate of Exemption to make tax-exempt sales of agricultural products that the farmer grew or produced. The Agricultural Sales and Use Tax Certificate of Exemption is required to make taxexempt purchases of machinery, repairs, and certain supplies for use by a qualified farmer, timber harvester, or nursery operator.
———————————————————————
55. I cut the trees from my own farm, have the lumber sawed, and my family makes birdhouses, baskets, and
similar crafts. Should I charge the tax on these items?

No; as long as these are created from wood from your farm, they are not taxable. However, if you buy the lumber and other components from a supplier, the sale of the home-made craft is taxable.

-- Hal, Tennessee http://www.first285.com

View Sawkerf's profile

Sawkerf

1730 posts in 1706 days


#12 posted 03-14-2012 03:09 AM

Courtney -
Was it the state telling you those requirements or was it the city/county? AFIK the state only cares about collecting their sales taxes (Franchise Tax Board), and that you have any reqired professional licensing (Department of Consumer Affairs). Business “licenses” are usually issued by the city, and are essentially receipts for an annual tax.

Assuming it was the city or county, were they clear that you wouldn’t be selling out of your shop? When I started up, the city inspector came by and signed me off when I told him that all of my work was custom for specific customers. I had no sales space or inventory.

-- Adversity doesn't build character...................it reveals it.

View Puzzleman's profile

Puzzleman

331 posts in 1582 days


#13 posted 03-14-2012 05:09 PM

Courtny, I agree with a1Jim. Since you have medical issues preventing this from being a full time job, I would call it a hobby. A hobby that takes alot of your time, but nobody can tell you how much time to put into your hobby.

Like a1Jim said, the problem comes when you declare income and make a profit. You can have a hobby and make a profit and the IRS wants their share. give it to them. And do not tell anyone that you are in business. You have a very engrossing hobby.

No regulations or licenses for a hobby. Remember, it is a very engrossing hobby!!

-- Jim Beachler, Chief Puzzler, http://www.hollowwoodworks.com

View NBeener's profile

NBeener

4806 posts in 1812 days


#14 posted 03-14-2012 05:55 PM

Along with the rest of this, I simply wish you the best of luck with your health. Sounds like you’re dealing with cancer. Shocking, and tragic … particularly at your age.

All the best….

-- -- Neil

View Bill White's profile

Bill White

3429 posts in 2598 days


#15 posted 03-14-2012 06:08 PM

Go ahead and move NOW! You’re gonna have to deal with all the crap forever in CA. What a shame, but that’s the way it is unless ya have a zillion bucks or just don’t care. Next you’ll need a health dept. permit because of your illness (which I hope you beat).
Bill

-- bill@magraphics.us

showing 1 through 15 of 32 replies

Have your say...

You must be signed in to reply.

DISCLAIMER: Any posts on LJ are posted by individuals acting in their own right and do not necessarily reflect the views of LJ. LJ will not be held liable for the actions of any user.

Latest Projects | Latest Blog Entries | Latest Forum Topics

HomeRefurbers.com

Latest Projects | Latest Blog Entries | Latest Forum Topics

GardenTenders.com :: gardening showcase