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Thread: Making a Business?

  1. #1
    Join Date
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    Making a Business?

    I have a question now that I am doing more woodworking and wondering aobut making a business name, etc.

    I have someone else making me pieces and they own their own business (single guy out of his own shop) and I of course I will be paying him every so often for the next few months. I then in turn will be using these pieces in projects and selling them to others.

    My questions relates to whether I should come up with a business name, maybe register it (I think I have to in the state, not sure though), or just pay him out of my own personal account and not worry about it.

    I didn't know if making business name and doing all of that had any perks or if just made better sense to do it since money will be changing hands all the time. Any suggestions, ideas or thoughts are appreciated.

    Thanks
    Rise above the rest

  2. #2
    Join Date
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    If you want to be a business and go for some serious bucks. You must jump through all the hoops. If you just want to make some side money without dealing with bureaucracy, start the paperwork.

  3. #3
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    Quote Originally Posted by Frank Fusco View Post
    If you want to be a business and go for some serious bucks. You must jump through all the hoops. If you just want to make some side money without dealing with bureaucracy, start the paperwork.

    This wont be a serious business, depending I guess on what you consider serious. I have a 45-50 hr week job so this is just side money but the it could be some good side money (at least to me) if this goes well. Not sure if there is an amount you make from doing "side" work that you must start considering calling it a business. I just do woodworking as a hobby and only get to do it in the evenings and weekends. Just sure what might be the best plan of action to take.
    Rise above the rest

  4. #4
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    In many states the determiner of if it is a business or a "hobby" is if you are making money. Keep careful records and if you are loosing money hand over fist you are having FUN with a hobby.

  5. #5
    Alan DuBoff is offline Former Member (by the member's request)
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    It's easy in the U.S. to file a D.B.A. (doing business as) with the city in most cases and be setup. For an official business you need to get a business license and file quarterly taxes also. I would reccomend keeping it simple, file the D.B.A. so you can use the name, get a bank account, but I wouldn't move so fast on the whole business license and paying quarterly taxes just yet, but get your feet wet and see how it goes. You can file any income on your personal taxes at the end of the year, for any business you do.

  6. #6
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    In many states, you can set up as a Limited Liability Company (LLC), which offers certain tax and legal advantages. This usually doesn't cost much, basically involves registering with your state and paying a small fee. See if your state has a database so that you can choose a name that isn't already in use for the same kind of business.

    What kind of business relationship are you planning with this other person? Will you be considering a partnership, or will he just be a supplier? Be careful that you are not considered a "common law" partnership with the other person, unless you want his liabilities to become yours, and vice versa. In many states, a small business is deemed a common law partnership by default, until that business incorporates or is otherwise registered as some kind of limited liability entity. In a common law partnership, all owners are jointly liable for actions of one another. Thus, you can be held legally accountable if your partner incurs some liability. Creditors can reach personal assets. That's where registering as an LLC can provide some protection. If you plan a partnership with the other person, you could also set up a Limited Partnership (LP), or a Limited Liability Partnership (LLP), which have some similar legal protections.

    Cheers,

    Kevin

  7. #7
    Join Date
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    If you are going to earn an income from woodworking, don't be a cheap skate about it.

    Get a sales tax number, set up a business checking account, pay for your Worker Comp Insurance, have an accountant determine what you can and can not deduct as depreciation in your shop, and most importantly

    Pay for business insurance.

    You never know when some friend will walk in your for profit shop and injure himself and sue you. I am not joking either. THere are a bunch of people here that have never owned a business and just ignore this important stuff.

    Also, what happens if your shop sustains damage. Are you properly insured for a fire or someother calamity?

    If you are going to earn money from woodworking pay your fair share of taxes and don't cheat the system or society.

    I can not stress this enough, once you start accepting pay for your product or services, you are no longer a hobbiest.

    Do it right.

    Joe

    I am sick and tired of amatuers undermining for profit businesses

  8. #8
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    Quote Originally Posted by Joe Mioux View Post
    If you are going to earn an income from woodworking, don't be a cheap skate about it.

    Get a sales tax number, set up a business checking account, pay for your Worker Comp Insurance, have an accountant determine what you can and can not deduct as depreciation in your shop, and most importantly

    Pay for business insurance.

    You never know when some friend will walk in your for profit shop and injure himself and sue you. I am not joking either. THere are a bunch of people here that have never owned a business and just ignore this important stuff.

    Also, what happens if your shop sustains damage. Are you properly insured for a fire or someother calamity?

    If you are going to earn money from woodworking pay your fair share of taxes and don't cheat the system or society.

    I can not stress this enough, once you start accepting pay for your product or services, you are no longer a hobbiest.

    Do it right.

    Joe

    I am sick and tired of amatuers undermining for profit businesses
    Everything that Joe said, PLUS:

    Get a Federal Employer's ID Number; and,

    Regarding the insurance - MAKE SURE YOU HAVE IT! Even if that friend who walks in and injures himself doesn't sue you, there's a good chance that, if he needed medical treatment, his insurance company will sue you. His insurance company will certainly want to find somebody to reimburse them, and guess what? You're him! DAMHIKT...
    Jim D.

  9. #9
    Join Date
    Nov 2006
    Location
    Michigan
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    Another in agreement with Joe and Jim. I also see a lot of people in the "house renovations and building" field getting into the business with no insurance, no license, etc.

    Be honest, go through all the hoops and...Best of luck.

  10. #10
    Join Date
    Dec 2006
    Location
    Kansas
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    Quote Originally Posted by Joe Mioux View Post
    If you are going to earn an income from woodworking, don't be a cheap skate about it.

    Get a sales tax number, set up a business checking account, pay for your Worker Comp Insurance, have an accountant determine what you can and can not deduct as depreciation in your shop, and most importantly

    Pay for business insurance.

    You never know when some friend will walk in your for profit shop and injure himself and sue you. I am not joking either. THere are a bunch of people here that have never owned a business and just ignore this important stuff.

    Also, what happens if your shop sustains damage. Are you properly insured for a fire or someother calamity?

    If you are going to earn money from woodworking pay your fair share of taxes and don't cheat the system or society.

    I can not stress this enough, once you start accepting pay for your product or services, you are no longer a hobbiest.

    Do it right.

    Joe

    I am sick and tired of amatuers undermining for profit businesses
    Guess I struck a nerve with ya Joe? I am not a cheap skate and I am not trying to undermine anyone. I am trying to go about this the right way, that is why I am asking. I never expected to do anything like this it just happened.

    I can understand where a wood worker that does this for a living and depends on it for his income would have issues with someone just selling stuff without going through the proper channels.
    Rise above the rest

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