To operate your business legally, you should make a visit to
your local department of licensing and find out what kind of
license fees you have to pay to operate your business. In addition
to your business license, your state, county or city government
might have some regulations of which you need to be aware. For
instance, in Washington state, the Department of Revenue has
a Litter tax which it imposes on companies that manufacture and/or
sell soaps and toiletries.
Insurance is another concern for the small business owner. Check
your homeowner's or renter's insurance policy to see if it covers
your business equipment and supplies at your home. Here are three
organizations that offer insurance for small businesses.
Harbour Entertainment & Sports Insurance offers liability insurance for crafters selling
at craft fairs and festivals. For more information see their
website at www.harbourinsurance.com. Their address is 100 Corporate
Pointe, Los Angeles, CA 90230. Phone (310)348-2300.
The National Association For The Self-Employed offers business property insurance. To contact
them write to:
The National Association For The Self-Employed
PO Box 612067, DFW Airport, Dallas,TX 75261-2067. Phone: 1-800-232-6273
Visit them on the Internet at: www.nase.com
Good record keeping is important for any business. Keeping good
records will help you complete your income tax forms correctly,
it will help you know how well your business is doing, and it
will help you determine how much to charge for the goods or services
that you sell. At the bare minimum you should keep the following
·Sales records -
Keep a receipt for every sale that you make. The receipt should
show the items sold, the sales tax charged (if any), and the
total value of the sale. At the end of every month, or quarter,
input your sales into a record book, or record-keeping computer
program, so that you can quickly tally up your sales for the
·Expense records -
Keep a receipt for every item that you purchase for your business.
If you can, get a separate business checking account from your
local bank. This will also help you keep track of expenses.
·Customer list -
Keep a list of everyone that purchases from you. Then periodically,
send them an update about your business (new products you have
to offer, sales, shows where you will be exhibiting, etc.)
If you operate a business where you are
selling products, you should a record of your inventory and items
removed for personal use.
·Inventory records -
The term inventory applies to the following items:
-work in progress
At the end of every tax year, you will
have to identify your inventory and determine the value of your
inventory for your tax records.
·Items withdrawn for personal
When calculating your inventory for tax purposes, you must subtract
the value of the items that you removed from inventory for personal
use. The easiest way to do this is to keep a record of the items
that you use during the year.
Visit the IRS for more information about
recordkeeping at http://www.irs.gov/tax_edu/teletax/tc305.html
SELECTING A BUSINESS NAME
When you apply for a business license, you will have to put down
your business name on your application. Spend some time thinking
about your business name so that it means something to you and
potential customers. Your local business office will tell you
the exact fees and process for protecting your name in your state.
To protect your name nationally, you need to trademark it. Contact
the Patent and Trademark Office of the federal government for
more information. You can visit their site on the internet at
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