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Forum topic by clieb91 posted 517 days ago 1066 views 1 time favorited 15 replies Add to Favorites Watch
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clieb91

3264 posts in 2562 days


517 days ago

Topic tags/keywords: question craft fair business type business

Greetings all,
I need an little bit of information. My wife and I have hit the craft fairs pretty hard recently and we are actually being asked to come to others while at ones we are doing. We enjoy it quite a lot, but believe it is time to get our ducks all lined up so to speak. We need to set up an actual business. For those of you doing craft fairs; what type of business did you set up or have you? We are looking toward a Sole Proprietorship or a Limited Liability idea. Any help you can offer is greatly appreciated.

Hope business is going well for all of you.

CtL

-- Chris L. "Don't Dream it, Be it."- PortablePastimes.com (Purveyors of Portable Fun and Fidgets)


15 replies so far

View Monte Pittman's profile

Monte Pittman

13740 posts in 965 days


#1 posted 517 days ago

Sole proprietor. Some advantage to LLC, but in my mind I am not big enough for that yet.

-- Mother Nature created it, I just assemble it. - It's not ability that we often lack, but the patience to use our ability

View Tim's profile

Tim

1241 posts in 588 days


#2 posted 517 days ago

I’m not in your situation, but I can give you some guidelines. If your revenue from your business is a substantial portion of your income then it is a good sign it’s time for an LLC. If not, you’re probably fine without a formal business structure, but strongly consider going to a property insurance agent and asking about a business owners policy that covers basic things like property, and liability etc. Like a homeowners policy, but for your business. Many people are surprised to find that their homeowners insurance specifically excludes business activities and property. A rider on your homeowners policy is an option to consider as well. Shop around of course.

These are reasonably cheap options. An LLC costs you maybe a thousand or two from a decent attorney to have set up properly, or cheaper if you try to do some or most of it yourself. Some attorneys will try to charge outrageous amounts. Just be aware trying to do it all yourself can require a large amount of research and you’ll still probably make mistakes. Nolo press or similar books on setting up your own LLC are still a good resource so you are informed when you go talk to an attorney. A BOP policy or a rider might be from a couple hundred per year and up depending on your coverages. The business structure is not unimportant, but is probably the last of the above issues to address.

View Jim Finn's profile

Jim Finn

1654 posts in 1549 days


#3 posted 517 days ago

I have set up two small businesses over the years and the first thing to do is get a sales tax license from your state. This will give you a business number and you will officially be “In business” I run one now as a sole prop. Keep records of all expenses and sales.

-- In God We Trust

View huff's profile

huff

2795 posts in 1912 days


#4 posted 517 days ago

I would suggest you start as a sole prop. and start like Jim stated; get your sales tax license from your state dept. of Revenue. (probably can do it on line). If you are selling your woodworking, you are considered a business and required to collect and report sales tax.

You need to check with your local county or city to see if a business license will be required through them.

Liability Insurance as mentioned above is also something to check into.

If you try to run your business mixed in with your personal (not recomended), then you need to keep good records from the get go to keep track of all your sales, expenses, sales tax collected and paid and anything else pertaining to your business.

It’s never a good idea to throw everything in a shoe box and try to sort and separate business from personal at the end of the year.

If you’re really interested in setting up your woodworking business; I’ve written a book on “Starting a woodworking business” and will be glad to send you a CD copy of the book FREE if interested. Just drop me a line with an e-mail address I can send it to.

Good luck with your business

-- John @ http://www.thehuffordfurnituregroup.com

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tncraftsman

64 posts in 1766 days


#5 posted 517 days ago

I’d look into an LLC if you are serious about treating your endeavor like a business.

Think of an LLC as part of you risk management.

It sounds like you have been operating as a Sole P. for some time. While not perfect an LLC will shield you from some liabilities.

Like has been said before if you are serious about your endeavor then it’s time to get your business insurance, sales tax info, getting legitimate with the state then feds and the like.

Don’t forget to see if the CPSC has any rules about what your are making. You’d be surprised what the government regulates.

A free counselor at the SBA can help you with all this.

View jat's profile

jat

53 posts in 1398 days


#6 posted 517 days ago

I would strongly suggest you form a SubChapter S corporation. The Sole Proprietorship leaves all of your assets completely exposed to liability. I also do not recommend an LLC. LLC’s were created for real estate holding enterprises and have special tax breaks for that purpose. As a craft business, all of your income would be subject to federal withholding tax under an LLC. With a Sub S corporation, you could take a small salary per week that would be subject to a small withholding and the rest of the money earned is considered a “Distribution” and is not subject to withholding tax.

I’m an Ohio attorney but not licensed to practice in Va. So, you should consult a local lawyer.

View Jay Wells's profile

Jay Wells

58 posts in 519 days


#7 posted 517 days ago

Contact your local Small Business Administration office and ask about the retired executive mentor program. A free service but for the time you spend and you’ll never find a better way to spend a few hours.

Good Luck! Go get em!

-- Find your limitations, and ignore them!

View CessnaPilotBarry's profile

CessnaPilotBarry

886 posts in 737 days


#8 posted 517 days ago

A sole proprietor and LLC can be the same thing. Think “Single Member LLC”...

Suggest spending the money on hour’s time with a local CPA who does set ups in YOUR state.

Look for a local SCORE (Service Corps of Retired Executives) chapter.

Be aware that LLC’s have very little to do with taxes, as they are a pass-through entity to the IRS. If you’re physically doing the work, you still have personal liability. “S” corps can allow you to create things like pre-tax retirement plans, but may incur different taxation as a separate entity, and state fees. Even in a corporation, if you’re doing the work, you can still be liable for damages.

LLC’s and various corporation structures mainly protect you from the actions of others, like employees and subs. See a pro, there’s LOTS of misinformation out there.

-- It's all good, if it's wood...

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KOVA

1311 posts in 1005 days


#9 posted 517 days ago

POR LO VISTO TENDRÁS QUE SENTARTE A CHARLAR
CON UNOS CUANTOS ASESORES: EL CALVARIO COMIENZA JAJAJAJAJAJAJAJA
SUERTE CON ESO CARPINTERO :-)

-- KOVA, EL CARPINTERO DEL PUEBLO https://www.facebook.com/pages/El-Carpintero-Del-Pueblo/148976618479733

View clieb91's profile

clieb91

3264 posts in 2562 days


#10 posted 516 days ago

I knew I could count on good information from you all. Thank you so much, I am certainly going to look into the SBA programs and get things rolling here shortly. not entirely sure that the Corporation is quite the way to get due to the size of us but we’ll see.
Thank you all again. I’ll let you know what we decide.

CtL

-- Chris L. "Don't Dream it, Be it."- PortablePastimes.com (Purveyors of Portable Fun and Fidgets)

View needshave's profile

needshave

150 posts in 586 days


#11 posted 516 days ago

I operate two businesses as LLC’s. Spend some serious time going through your states web site where you will find considerable information about filing for a name and detailed information and comparison about different types of company structures. 15 years ago I set my company up and the state information site was a tremendous help, as well as the SBA and Score (Service Corps of Retired Executives). You find more information in those site than what you will want, just take time and proceed slowly. Good Luck

View helluvawreck's profile

helluvawreck

15582 posts in 1493 days


#12 posted 516 days ago

I think it’s best to just go ahead and setup an LLC. This is what I have done.

helluvawreck aka Charles
http://woodworkingexpo.wordpress.com

-- If a man does not keep pace with his companions, perhaps it is because he hears a different drummer. Let him step to the music which he hears, however measured or far away. Henry David Thoreau

View RussellAP's profile

RussellAP

2944 posts in 913 days


#13 posted 516 days ago

If you set up as a business you have to consider the zoning laws in your state, county, city, ect… You might not be able to run a business out of your home.
If you do, set it up as a retail internet business that way you don’t tell them you have a workshop out of your house.
It’s best to up the contents part of your insurances to compensate for the tools in replacement value.

Check it all out before you do anything, once you apply for a business licence in your city things can change real fast whether you get a licence or not.

-- A positive attitude will take you much further than positive thinking ever will.

View Tim's profile

Tim

1241 posts in 588 days


#14 posted 516 days ago

Jat, I don’t know about Ohio, but in every other state I am aware of, an LLC can be taxed as either an S corp or a C-corp. An S corp is way too much overhead with required corporate record keeping which isn’t typically needed for an LLC, depending on the state. You can set up retirement plans and such with an LLC as well, I’ve done it and seen it done many times. An S-corp is typically quite a bit more expensive to set up.

View CessnaPilotBarry's profile

CessnaPilotBarry

886 posts in 737 days


#15 posted 515 days ago

An LLC can be taxed as anything… Even a sole proprietor…

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Limited-Liability-Company-%28LLC%29

An LLC is about liability, not taxes. An LLC is not a corporation. The retirement plans are related to the structure behind the LLC, not the LLC itself.

-- It's all good, if it's wood...

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