It does not matter if you make $100.00 or $1,000,000.00 a year from your crafts, you should always treat it as a real business. How do you do that you ask? It is really quite simple, I will give you everything you need here to get started.
First step is to choose a business name. See the post What’s in a name for more information on that subject. Next you need to decide what type of business you want to be, a LLC (Limited Liability Corporation), sole proprietor, or an S. Corporation, it would be wise to contact an attorney, to find out which of these would be best suited for your company. Then have an attorney draw up the paperwork for you to be filed at the Secretary of States office in you State. Here in Louisiana, we can file our own LLC papers, and they will draw them up after filing out a short form online. This cuts out the attorney, and saves time and money. Of course only do this if you are sure of what type of corporation your company will be.
You should receive that paperwork back in 1-2 weeks, depending on your state. At that time, you should open a checking account in your business name. The IRS frowns on people who operate out of their personal bank account. If you will be selling to customers on a retail level, you will need to obtain a retailer’s occupational license. You will probably not need this if you are only selling online. It is best to check with your city or state tax department to make sure of what you need. It is better to be safe than sorry.
Make sure you are very organized with your record keeping system, from day one. It is easier than going back and trying to organize it after you have been in business for a year or two. I recommend you find an accounting software that will help you to stay organized. I really like Quickbooks, it is great with keeping all of your financial information neat and organized. This program can even be linked to your checking account for easy balancing. It also has a great report system, your CPA will love you if you have everything that he needs right there on the reports. Check out http://quickbooks.intuit.com for more information. It is a little pricey, but well worth it in the end.
Once you have all these steps set up and completed, you are officially in business. The next step would be to start working on your branding, giving yourself and business a look or style. See How to design your brand, coming up soon.
Good Luck and Congratulations on your new business, I can not wait to here more about it and to start helping you promote it.
xoxo,
Mary
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