Making a Business?

aaron, you have a "real" job........talk to your accountant and insurance agent and explain to them that your "HOBBY" is starting to show some profit and ask their advice.....they should be better versed than anybody here on the hoops required for your particular venture......i`d refrain from calling a hobby a business untill you`re ready to turn it into one .....tod

Thanks for all the suggestions fellas, I think I wll have to look up and contact some people to see what I might need to do.

There is no way that I am going to be able to quit my regular 45 hr week job and strictly do woodworking. This was a project that I landed and if all goes well will be something to keep me busy for a while, but not anything that I can do full time. That's where the whole "start a business" thing came from and how it should be handled since its not a full-time business.

I will do some calling and see what I can come up with.
Thanks again.

Look into a limited liability corporation , LLC. And remember, all those expenses: Insurance, accountants, lisences, fees, etc, are tax deductable. Infact, if you do alot of business on the internet, say on ebay selling or buying you can deduct those fees, and even your internet expenses, your car, gas, milage..the list is endless. And dont forget, trade show fees are expensess as well as entertainment costs if they are related to your business(thats easily done if you discuss work with a client during diner)

One thing you may want to look into is if you live in a HOA you may have restrictions on what sort of business you have out of your home.

I ran a small architectural design business for over 10 years and my wife and I did our own taxes(ok, ok, she did them). It's not as hard as you may think or find a good honest accountant.

I agree, if your gonna do it do it right. Establish it legaly, maybe at a step by step process. You will get alot of benefits as a business. You'll be able to establish commmercial accounts with suppliers and commercial bank accounts. You'll be able to join trade associations which can help you with certifications and so forth not to mention networking.

It's an exciting endevor, and even better if its profitable.

Good luck, which ever way you take it.

(The views expressed in this post are the sole humble opinion of the poster and do not intend to promote or advise any point of view )

tod evans said:

aaron, you have a "real" job........talk to your accountant and insurance agent and explain to them that your "HOBBY" is starting to show some profit and ask their advice.....they should be better versed than anybody here on the hoops required for your particular venture......i`d refrain from calling a hobby a business untill you`re ready to turn it into one .....tod

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tod:

Is there an insurance co. that specializes in the woodworking industry such as cabinet making and furniture making?

joe

Joe Mioux said:

tod:

Is there an insurance co. that specializes in the woodworking industry such as cabinet making and furniture making?

joe

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joe, not that i`m aware of? to most companies it`s just "another business" that requires its own hoops jumped through.....never-ever sell something targeted at kids, always have a central dust collection unit, store all flamables outside of your main building in an approved locker.....ect, ect...

tod evans said:

joe, not that i`m aware of? to most companies it`s just "another business" that requires its own hoops jumped through.....never-ever sell something targeted at kids, always have a central dust collection unit, store all flamables outside of your main building in an approved locker.....ect, ect...

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Joe,

I'll add to what tod said by saying...be prepared for STICKER SHOCK!

I almost dropped to the ground when I got my initial quote!!!

Good luck...
- Marty -

Thanks Tod and Marty;

In my real life business as a owner of two flower shops and with 16,000 sq ft of greenhouses, my business insurance is through Hortica. A insurance co specializing in the horticulture industry.

I have found that some general insurance co's don't want to bother with certain specialized industries such as mine OR I wouldn't want to be covered by them due to the special insurability issues that are part of my business.

In other words, you may think you are insured but when something happens the ins co doesn't cover.

And Marty: I can sympathize with sticker shock Last year, my business ins premiums went to $6,500 per year compared to $4,800 the prior year. That is a hard pill to swallow but a necessary one. With that said, whenever I had a claim they have treated me right.

Joe

So much great information in this thread... let me add my 2 cents if you don't mind.

Re: Liability insurance : This cover injury etc..and as long as you have the insurance - the piece is covered in their home - (think falling bookcase)...this made it well worth it to me. My liability insurance falls under the category of "finish carpenter" and with some leg work from my agent - he got me down to under $1200.00 for the year. I think that is pretty good.

Workmens Comp : I have if/any workmans comp. It costs $500.00...If I hire anyone and pay them, then I have to pay additional workmens comp, if I don't - then I get $250.00 back at the end of the year. Again, worth it.

Sole Proprietor : I work as a sole proprietor. dba Hometown Woodworking. I am liscenced with the town. I have a tax id number. On the projects that are subject to sales tax, I collect - and only pay electronically once at the end of the year. I collect such a small amount that they have not hassled me to do it quarterly. I only file taxes once a year. I submit profit and loss to my accountant and he put it in with my personal taxes.

It is actually very simple - just cover your bases.

(I think in the case where you are buying from another woodworker, you would treat him as a vendor. Therefore, he should be supplying you invoices for the things he is making for you.)

Good luck

Gail O'Rourke said:

On the projects that are subject to sales tax, I collect - and only pay electronically once at the end of the year. I collect such a small amount that they have not hassled me to do it quarterly. I only file taxes once a year.

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Gail,

I think this is dependent on the state, and CA does in fact require that people file quarterly. However, I must preface that, since I have only filed taxes as a consultant, and not a woodworker. I have since closed my corproation and hung up my consulting hat...but who knows, I can alway dust it off again if I want...