Replies

1. 
   Drew_Nyman | Apr 05, 2000 08:05am | #1

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   Will, when woodworking is your hobby you build at your leasure. When it's a business you build when your told to. Before you start decide where you will draw the line between the two.

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   Clay_Baker | Apr 16, 2000 07:33am | #2

   *Will, selling to stores can be tricky because it does open you up to liability issues. I have a childs Adirondack that I was pitching to some stores in the San Francisco Bay Area. The first question I was asked was, "Do you have $5 million in product liability insurance?" That was all I needed to hear. Try some other avenues, ebay, Amazon.com, craft fairs, mall events, ads in your local classifieds work great, galleries or your own web site. Usually you only pay sales tax to the state and county where your business is located, but check the local rules by contacting your State Board of Equalization. These folks will sell you a Sellers Permit with your Resale Number and they will send you your Sales Tax forms on a regular basis. When you buy lumber and other materials you can use your Resale number to buy materials without paying sales tax. When you do pay sales tax on something you will resale, you can deduct that tax from the sales tax you pay to the SBoE. My situation got pretty complicated so I started using QuickBooks by Intuit. By properly categorizing all the taxes I pay and what time period I collected them in I can very quickly generate reports for my sales tax reporting. Also check to see if you need a business license to have a home based business. Check to see if your homeowners insurance or renters insurance covers the tools in your shop. If not I'll tell you right now you can't afford it. So just take extra pre-cautions to protect yourself from fire and theft. Good luck

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   Don_Stephan | May 15, 2000 12:29am | #3

   *Your state may have local offices that are staffed by people from sales, personal, business, franchise, unemployment, and other taxes to answer your questions in one location. Whether you are unincorporated or incorporated will affect your liability for different taxes, may also affect whether or not you have to have worker's compensation insurance. There are a number of books on the advantages and disadvantages of different business organizations - S corporation, C corporation, partnership, sole proprietorship, et cetera. Another source of information would be your insurance agency - different liability conditions for different business organizations. Second, I would suggest some research before building a dozen of an item. What people think is cute, nicely done, ... can differ significantly from what they are willing to buy. There are certainly economies of scale that we all like to take advantage of, but the economic advantages only apply if the item sells at the desired price.Good luck.