Now that you have defined your success and hopefully worked out your goals, it’s time to get legal. Before you offer anything up for sale, be sure you have all your legal ducks in a row.
Every state, county, parish, and town has their own rules as to what a person needs in order to be legally running a business. I recommend going down to your county (or parish as I live in Louisiana) offices and find out what you need.
I’ve run our lampworking business out of three states. California, Texas, and Louisiana. Each have their own regulations. But these are the things you need to be aware of:
First things first. Are you going to be a sole proprietorship? Meaning you are the sole owner of your business? In a partnership with another person? Or maybe you want to be set up as a corporation. I understand there are tax and legal benefits to forming a corporation, but you’ll need to do that legwork yourself. Our business is set up as a sole proprietorship, and is by far the simplest way to go. I am the owner, so yes, Greg works for me.
Okay, next you need to decide on a business name. If you are going to operate under anything other than your legal name, you need to file a DBA (aka Doing Business As) with your county. Years ago it was a trend in the lampworking community to use made up business names, especially ones with the word fire or flame in them. In retrospect I think those artists would have been much better off going with their own artist name. JC Herrell, Lori Greenberg, Kimberly Affleck, Andrew Brown Studios, etc, etc. All easy to remember. I don’t have to think, ‘were they Dancing Flame, Fire Diva, Midnight Glass?’. BTW, I just made those all up off the top of my head. If any of those are your business name, I apologize if I offended you.
Last month while at Bead and Button we were looking for one of our friend’s booth in the booth guide and none of us knew her business name. We knew her name, but not what she was operating under, and we’d all known her for years. After we found her she concluded she should probably just change it to her own name. Unless you are prepared to do a major branding, think about just using your own name. We’ll remember you, I promise. Greg and I use Chase Designs, since there are the two of us. But I still brand his marbles Greg Chase in every listing. Its the connection thing.
Anyway, if you use your own name you can skip the DBA.
Permits and licenses:
Business license. Find out from your state and county if you need one. For some places you do and some you don’t.It’s usually a revenue thing for cities. Since I run a business out of my house that doesn’t have customers coming here, I do not need one. I found this out by calling my city offices and asking.
Sales and use tax permit. Almost anyone in engaged in business will need one of these unless you are in a no sales tax state. In Louisiana, I needed to register for one with the state and my parish. In California and Texas I only had to register once with the state and the one form took care of both. If you don’t know, go ask someone or call.Also find out what you need to collect taxes for. In most places if you sell on the internet and ship out of state, you do not need to collect sales tax. If you are selling in person or doing shows, yes you need to collect it. Do your homework, talk to an accountant. Know your city, county and state laws.
Also if you do shows out of state, you will need to register for a sales and use tax number for each state you sell in. Most shows will help you with getting the right forms filled out, but if not, just call the taxing authority in that state and explain your situation. They will help you out.
Resale license. If you are purchasing anything and reselling it, you want and need one of these. This little number makes it so you do not have to pay sales tax on these purchases.
It can seem overwhelming and sometimes the forms are confusing, but I’ve found all of the people at my parish offices to be very helpful. They want you to be legal and are more than willing to help.