Guidelines to follow?

[aepelton]

There is alot of info on what to do when you start a small business. All the guidelines you are suppose to follow: county forms, state and federal and how you do your taxes. But when starting a small business when it is a out of your home with your own products that you make that will be sold on the internet different than for someone who rents a building and does their business from there?
I hope that mases sense!!

[Yuliya Mironova]

Hi,

It varies from country to country.

In some countries, home-based businesses selling home-manufactured products are exempt from the some of the laws and regulations that apply to businesses with employees in "commercial premises", and so on - sometimes just for their first year or two of trading, and sometimes even permanently.

I think it may help people to answer your question more fully if you specify a location either in your question or in your profile, otherwise we're guessing? (I'm guessing America, myself? ).

[aepelton]

Yes I'm in Kansas actually and what they describe as the legal way to start your own small business is alot bigger in comparison to what I see my small business being and can't find or get anyone that actually tell me if all rules are the same regardless of in your home selling on net or small business selling to the public in the town square.

[lindastacy]

The laws can vary not only by country, but by state, county, and as far down as zoning laws in your town. For example, where I live the zoning laws technically prohibit me from joining a direct sales company as a home business, but I could make and sell candles or jewelry (as long as customers don't come to my home).

How you register your business and how you pay taxes depends on what kind of a business entity you are. If you run your business under your own name it's different than if you do business with a company name, but haven't formed a business entity, and it's different still if you form a partnership or corporation.

The best way to know what you have to do is to contact your local government such as a town or county clerk. The Small Business Administration should also be able to help. And professional advice from an accountant and attorney is advisable.

[Queen Beez Handbags]

Generally all the advice is true and good.

I think if you're looking to just make a few dollars on the side to supplement another income by you or a spouse then you don't need to do all this right away. While that's not legal it doesn't always make sense to invest all this time and money into a business lic, resale lic, bank acc, and tax info, etc until you know you have a viable business with real income potential. As long as you keep it out of your house and everything in your name and aren't dealing with employees then avoid this until you know you have something worth investing in.

I started out the same way just doing purse parties in my area and it became more than I could handle. Once it got to that point I decided to do the website, get a business name then do all the legal stuff. It took over a year to get to that point but it all worked out.

[AlisonMSmith]

As per above, most every CITY has their own specific rules about businesses. And it goes up from there. And it's a royal pain, if you ask me.

As for making your business legal, I suggest doing it the right way right away. Whether or not it "makes sense" to operate your business legally could, I suppose, be debated. But in my book, you don't circumvent the law because it's a bother or an expense. Think about the ramifications of that mindset. Do you want to live in a society that lives by the rule of law or not?

[Telecommuter]

Have to agree with Jenn. We consult many clients who are just starting up. For Mom and Pops who are just starting up, we rarely encourage them to start right off with a business license. A business plan, yes, but licensing, no.

There are literally thousands of people who "start a business" everyday. The great majority of them will not go anywhere, maybe make a few hundred bucks. Then, either they get discouraged or they let life get in the way.

Starting right off with licensing doesn't give the person a chance to find out if the business or self-employment is even for them. It causes them to put all their focus in the wrong place.

The fact is, it isn't a real business until you come up with a plan and continue to work it. Otherwise, it's just an experiment. Focusing on the licensing up front doesn't give them a chance to explore before settling in.

It's too easy to take some days to go get a business license and file your business name with the State, then sit behind your computer and say, "I'm in business." It simply isn't so. Until you turn more than a dime or two, it's a hobby, not a business.

In fact, unless you turn a certain amount of profit over a specified time (I believe a few years), the IRS actually considers you a "hobby," and not a "business." And, even if you have all the licensing in place, they will not allow you to take advantage of tax benefits or write-offs.

However, once you are putting decent amounts of time into your business on a regular basis and are bringing in more than pennies, and you are working your plan, then consider yourself "in business."

Then, and only then, go get a license, make your business name official with the State, set up a new business checking account and make it official and legal. You are no longer just testing the waters. You are no longer just a hobby. You're committed to doing all you can to make it work.

[sallywu123]

Originally Posted by Telecommuter

Have to agree with Jenn. We consult many clients who are just starting up. For Mom and Pops who are just starting up, we rarely encourage them to start right off with a business license. A business plan, yes, but licensing, no.

There are literally thousands of people who "start a business" everyday. The great majority of them will not go anywhere, maybe make a few hundred bucks. Then, either they get discouraged or they let life get in the way.

Starting right off with licensing doesn't give the person a chance to find out if the business or self-employment is even for them. It causes them to put all their focus in the wrong place.

The fact is, it isn't a real business until you come up with a plan and continue to work it. Otherwise, it's just an experiment. Focusing on the licensing up front doesn't give them a chance to explore before settling in.

It's too easy to take some days to go get a business license and file your business name with the State, then sit behind your computer and say, "I'm in business." It simply isn't so. Until you turn more than a dime or two, it's a hobby, not a business.

In fact, unless you turn a certain amount of profit over a specified time (I believe a few years), the IRS actually considers you a "hobby," and not a "business." And, even if you have all the licensing in place, they will not allow you to take advantage of tax benefits nor write-offs.

However, once you are putting decent amounts of time into your business on a regular basis and are bringing in more than pennies, and you are working your plan, then consider yourself "in business."

Then, and only then, go get a license, make your business name official with the State, set up a new business checking account and make it official and legal. You are no longer just testing the waters. You are no longer just a hobby. You're committed to doing all you can to make it work.

Thank you very much for your appreciated comments.