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Business Structure:
- Sole Proprietorship: Super simple, but your personal assets are at risk.
- LLC: A bit more paperwork, but protects your personal goodies.
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Business Name:
- Make sure it’s unique and catchy.
- Check availability in your state and register it.
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EIN (Employer Identification Number):
- You can get this from the IRS. It’s like a social security number for your biz.
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Home Business Zoning Laws:
- Some areas have restrictions. Double-check with your local zoning office.
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Permits and Licenses:
- General Business License: Required in most places.
- Seller’s Permit: If you’re selling taxable items.
- Home Occupation Permit: Depending on your city.
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Insurance:
- Look into home-based business insurance. It’s always better to be safe than sorry.
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Online Presence:
- Etsy and Website: Get these set up to showcase your amazing products.
- Domain Name: Make sure it matches your business name.
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Farmers Markets & Retail Stores:
- Check with local markets and stores for vendor applications.
- Each may have their own specific requirements and permits.
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Taxes:
- Keep track of your earnings and expenses. Maybe consider getting an accountant or some good accounting software.
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Industry Overview and Startup Considerations The handmade products market is booming, with global sales expected to reach $1.1 trillion by 2024. Etsy alone saw over $13 billion in gross merchandise sales in 2021. As for capital, you might need around $2,000-$5,000 to get started, depending on your specific products and equipment needs. Speaking of equipment, you'll likely need:
Computer or tablet
High-quality camera for product photos
Crafting tools specific to your products
Packaging materials Now, let's talk business structure and paperwork. Brace yourself for some acronym aerobics!
Business Structure: LLC vs. S Corp Choosing between an LLC and S Corp depends on your specific situation. An LLC offers liability protection and tax flexibility, while an S Corp can provide potential tax savings through salary and dividend distributions. Both structures separate your personal assets from your business liabilities.
EIN: Your Business's Social Security Number An EIN (Employer Identification Number) is a unique 9-digit number assigned to your business. It's used for:
Filing business tax returns
Opening business bank accounts
Hiring employees
Establishing business credit Think of it as your business's social security number, but hopefully with fewer identity thieves trying to claim it.
Seller's Permit: Your Ticket to Retail A seller's permit allows you to collect sales tax on your products. You'll need one if you're selling taxable goods or services. It's generally required for:
Online sales through Etsy or your website
In-person sales at farmers markets or craft fairs
Wholesale transactions
Business Name Registration Registering your business name protects your brand and prevents others from using it. This process varies depending on your business structure:
For an LLC: Your name is registered when you file your LLC formation documents
For a sole proprietorship: You may need to file a DBA (Doing Business As) if you're using a name other than your legal name
Additional Permits and Licenses Depending on your specific products and location, you may need additional permits or licenses. These could include:
Home Occupation Permit
Health Department Permit (for food-related products)
Zoning Permits Remember, requirements can vary widely based on your location and the nature of your business. It's always best to check with local authorities to ensure you're fully compliant. And there you have it! You're now armed with the knowledge to navigate the exciting world of handmade product entrepreneurship. May your crafts be profitable and your paperwork be minimal! |
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Will be home based, will set up Etsy and website. Maybe sign up for farmers market or a store that features many shops or handmade products.
Business Licenses and Permits For your home-based handmade products business, you'll likely need a general business license or permit. Depending on your specific products and operations, you may also require specialized permits related to home occupancy, zoning, or product-specific regulations.
Tax Registrations You'll need to obtain the following tax registrations:
Employer Identification Number (EIN)
Sales tax permit
State tax registration
Additional Considerations If you plan to sell food items at farmers markets, additional food handling certifications may be necessary. For online sales through Etsy and your own website, ensure compliance with e-commerce regulations and obtain any required digital business licenses. |
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