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From: Scratch 'N Sniff
Date: 02-10-2006, 08:47 PM (1 of 5)
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Hey all. I've finally decided to go official with my sewing/alterations, but I have a few problems, all having to do with paperwork! I'd love any suggestions from people who have gone through this bit before: 1) I know I have to register my business with my state, but do I also register with the feds and/or my town? 2) I'm planning on doing alterations and custom designed apparel, mostly for women. Would I fall under "Manufacturing", "Retail", or something else like "Contracting"? I have no idea which to tick off on the forms. 3) Am I a "Sole Proprietor"? I'm not at this time planning to hire anyone else, so I'm not really an "Employer". Also there was one spot that was like "When do you expect to first earn wages?" What the heck am I supposed to put there? How do I know when someone is going to call me? Should I just leave it blank? 4) What name do I use? Do I have to make up a store name, or can I just use my name? At this point it seems almost premature to make up a business name, but since I'm getting married soon I don't want my business to always be named after my maiden name. Any other tips greatly appreciated! I've already got business cards that I made on the computer, and I've talked to a few places about putting them out, but I don't want to start doing that before I've got the legal aspect covered. Last thing I need is someone knocking on the door saying I'm breaking the law. Thanks! ~debie
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User: Scratch 'N Sniff
Member since: 01-02-2003 Total posts: 46 |
From: LoveSewin
Date: 02-12-2006, 12:04 PM (2 of 5)
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Debi, I'm sure it's different in the US than Canada, but here is some info I found.... Proprietorship: This is the simplest way to set up a business. A sole proprietor is fully responsible for all debts and obligations related to his or her business. A creditor with a claim against a sole proprietor would normally have a right against all of his or her assets, whether business or personal. This is known as unlimited liability. In a proprietorship, one person performs all the functions required for the successful operation of the business. The proprietor secures the capital, establishes and operates the business, assumes all risks, accepts all profits and losses, and pays all taxes. The proprietor is said to be self-employed. As for a name - as a proprietor you can just use your own name. If you want to make up a name, I'm pretty sure you need to register it, but it doesn't sound like that's the route you want to go anyhow. In my town we are required to get a business license, even when operating from home. You'll have to check with your town to see what their regulations are. Hope some of this is helpful. Kim
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User: LoveSewin
Member since: 01-31-2006 Total posts: 103 
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From: paroper
Date: 02-12-2006, 06:42 PM (3 of 5)
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In our state, the State Attorney General's office has free classes that are offered all over the state once a month. The classes include how to charge, collect and pay taxes (if applicable), how to name the business, what zoning may be required (dependent on type of business), recommendations for declaring your business as a corp, sole proprietorship, limited liablity, and a whole passal of information that would cost hours and money to learn. Perhaps your local government has a similar program? What is expected in terms of insurances and banking. As for naming, there are excellent points for naming your business for yourself. However, your name must be specific and unique to your area of business. In Oklahoma it had to be unique to business operating and selling in our county, including out of state or major business titles. (We couldn't piggy back our business on the back of an established business name). This was the hardest part (naming). There were banking pluses to naming the business with our name, but it has been so long, I can't remember why. If you plan to advertise in the phone book yellow pages there are also advantages to starting early in the alphabet. That is why you see so many businesses starting with A1 or AA. I operated for several years as a sole proprietor. I was both innocent and NUTS. If I knew then what I knew now, I would have gone limited liability, no question! There was only one time when it could have been a problem, but a lady came after me because a choir director chose the wrong fabric for a dress (I had nothing to do with the choice and had protested her choice.) Had it ended in court, I would have endangered everything, depending on the judge and jury. As it was, she just wanted an entire choir's dresses for free but I bailed and refunded her my money rather than deal with her. She just moved on to the fabric store after me. It cost me a hyundreds of dollars my family needed (along with lost time when I could have been doing another choir), but paid me in lessons learned. It was brutal. I would tell you...DON'T do this! My business was operated in such a way that I neither needed zoning changes (lived on the outer city limits of a major metropolis), business license nor did I collect sales tax. Most of my business was small scale (customers coming to me, unless I did a large choir), and the customers supplied all their own fabrics and notions. When I finished a project, all fabrics, patterns, etc, were returned to the customer. I strictly had a sewing service. There are distinct advantages to having to operate as a licensed business. That is strictly your call and subject to the laws and ordinances of your area. I do not know if my service would have needed any of the above permits or licenses now or not. It has been several years since I operated my business and laws change constantly. The MOST IMPORTANT THING is to properly keep all records! Never take a cent that is not accounted for in your receipts, no matter that it is cash, a small amount, whatever. It is just not worth the grief that could come of it. If you properly keep your records, the business will reward you in tax write offs and a clear conscience. Declaring my business when I left the corporate world was the best single financial move I ever made! pam
Bernina 200e, Artista V5 Designer Plus, Explorations, Magic Box, Bernina 2000DE & 335 Bernette Serger, Bernina 1530 Sewing Machine, Bernina 1300 DC Overlock (with coverstitch) |
User: paroper
Member since: 02-03-2004 Total posts: 3775 |
From: VenusElaine
Date: 02-13-2006, 09:50 PM (4 of 5)
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When you decide to start a business, whether home-based or store-front, there are layer upon layer of regulations. First - if you reside or are opening within the city limits, you often need a business license and must pay a B&O (business and operating) tax. The only form I had to file with my county was a "fictitious name form" as I was a sole proprieter with a DBA (doing business as) name. I had to register the business with the state, & collect and remit sales tax. If you choose to operate as a sole proprieter, bailee insurance is a must. This insurance covers other people's property (clothes) while in your possession. Your homeowner's or renter's insurance will not cover other people's property in your possession. The best place to start is your city's website. It should have information about starting and operating a business there. Next hit the county and the state. Seriously consider the ownership form you choose. Research! If you know anyone who is a lawyer or accountant pick their brain, barter services (these people must look professional, remember) invest some money for sound advice. Hope to hear you are doing well! VenusElaine "Always put as much effort into your marriage as you do into your wedding."
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User: VenusElaine
Member since: 10-22-2005 Total posts: 126 |
From: Scratch 'N Sniff
Date: 02-17-2006, 01:31 PM (5 of 5)
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UPDATE: Good news: Just talked to my town clerk and turns out since I'm technically a "home business" I will not need to fill out any paperwork. As long as I don't put up any signs around my apartment, and use my name and not a made up title, I'll be fine. But I will keep all your suggestions in mind if I ever think of expanding. Thanks!!
~debie
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User: Scratch 'N Sniff
Member since: 01-02-2003 Total posts: 46 |
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