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  1. #1
    Join Date
    Dec 2010
    Location
    Coatesville, Pa, USA
    Posts
    833

    Default how to start your own "small business"?

    To this point I have considered myself to be a "hobby" and not a small business, but I'm rethinking things. I have a small ammt. of income from the bees and I'm pondering if it's time to become "official". I found this site. . . http://www.inc.com/jeff-haden/how-to...few-hours.html and am wondering if this is good advice. Is it good to get a EIN?

    If you don't make enough to legally have to file do you need to file if you have a EIN? To this point I haven't made enough in past years based on expenses and income to warrant becoming official, so I'm a bit concerned about starting now and having all of the red tape of it all.

    Is there much that's involved once you officially fill everything in and become "official"?

    I want to have my business name down so that when people write checks to our business I can deposit them, but that's the only real "need" at this point. Having other assets separate from my personal accounts / assets would also be good.

  2. #2
    Join Date
    May 2009
    Location
    Flora,IL
    Posts
    2,644

    Default Re: how to start your own "small business"?

    Thats done with a simple DBA at the bank and opening an account. EIN is only needed if you have employees, and then the tax paperwork will drive you insane.....

    Hobby or business will depend on your tax returns. if your writing off expenses you have a business. if you don't list expenses or income its a hobby.......Oh wait... just to be official its not legal to not report income......

    AS for a LLC Depends on what you own and what your potential liabilites are....... Don't ask an attourney, ask your finical advisor or insurance guys.

  3. #3
    Join Date
    Nov 2011
    Location
    Rader, Greene County, Tennessee, USA
    Posts
    6,120

    Default Re: how to start your own "small business"?

    Your Social Security number (for most people) is your US Taxpayer ID. You would only need a separate ID number if you set up a separate legal entity to deal with your business, such as an LLC, partnership, corporation, etc.

    What you will need is a separate number for is State of Pennsylvania business taxes.
    http://www.revenue.state.pa.us/porta...nue_home/10648
    These typically include collecting and remitting state sales tax, use tax, etc.

    Put off hiring employees as long as you possibly can!
    Graham
    USDA Zone 7A Elevation 1400 ft

  4. #4
    Join Date
    Dec 2010
    Location
    Coatesville, Pa, USA
    Posts
    833

    Default Re: how to start your own "small business"?

    Quote Originally Posted by gmcharlie View Post
    Thats done with a simple DBA at the bank and opening an account. EIN is only needed if you have employees, and then the tax paperwork will drive you insane.....
    My understanding was / is that the EIN will enable you to use that # instead of your social security number to set up accounts. Is this innacurate? Will the paperwork still drive me insane if I don't have employee's? I am in no place to hire anyone. I'm seeking to build myself up as my own hives are able to expand and as I get swarm calls / cut-out jobs.

    Quote Originally Posted by gmcharlie View Post
    Hobby or business will depend on your tax returns. if your writing off expenses you have a business. if you don't list expenses or income its a hobby.......Oh wait... just to be official its not legal to not report income......
    My thought was that if I didn't make enough to "claim" then I wouldn't report anything. To this point I have both a list of expenses and a list of income. I've been planning on making it a business, however starting small means that it will take some time before income increases to the point of making substantial profit. I have made a little in past years, however my expenses have still been higher than my income or come very close to equal.

    Thanks for your thoughts on calling my insurance guy. I will definitely do that.

  5. #5
    Join Date
    Dec 2010
    Location
    Coatesville, Pa, USA
    Posts
    833

    Default Re: how to start your own "small business"?

    Thanks Graham!! Is it safe to use your social? In the article that I referenced he / she talked about getting a EIN so you don't "need" to use your social so that it's more private. In our day of credit theft and identity theft I'm interested in keeping things as private as possible.

    I will review that link and see what I can do with it all. Thank-you!!! I definitely need to understand more of what all of the different types of "taxes" that are needed to collect. To be honest I don't understand much of it.

  6. #6
    Join Date
    Nov 2011
    Location
    Rader, Greene County, Tennessee, USA
    Posts
    6,120

    Default Re: how to start your own "small business"?

    In my view, an EIN (Employer Identification number) is no more secure (or no less secure) than a SSN (Social Security number). Both of them can be used as part of a scheme to defraud / steal identity. If you do get an EID, you will still have to provide it to the same people that would otherwise want your SSN. The risks are not much different.

    If you do set up a separate legal entity to use an EID, in many cases vendors and banks (if you want trade credit or a bank loan) will expect you to provide a personal guarantee in order to get credit for your separate legal entity. That personal guarantee then just puts you back on the hook personally for the risks that your corporation was intended to insulate you from.

    You have the option of refusing to provide that personal guarantee, but then they have the option of refusing your credit request.
    Graham
    USDA Zone 7A Elevation 1400 ft

  7. #7
    Join Date
    Oct 2011
    Location
    Robesonia, Pa., USofA
    Posts
    439

    Default Re: how to start your own "small business"?

    Delber, consider requiring any checks written to you to be made out in your name.

    In my portrait business, a customer wrote a check to the business name that bounced.
    After numerous attempts to contact this person I called on their bank to see if sufficient funds were in the account to cash the check.

    Enough funds were there so I drove to the bank and they would not cash it for me.
    They cited homeland security rules.
    The bank was able to verify my identity and that I had a valid business in the state of Pa but they could/would not give me cash in hand.
    Because the check was written to a business and not my own name was the reason the bank refused to cough up the funds.
    If it was written to my name there wouldn't have been an issue.

    What they would do for me would be to open an account and deposit the funds there for me to use.
    I was a bit frustrated by this time because not only did our own bank whack us for a bounced check that someone else wrote, but now it would take even longer to obtain our funds.

    As the bank person was setting up the account she said "now you aren't just going to withdraw the money and close the account in a few weeks are you?"

    I just smiled.

    A few weeks later I did just that.
    From that point on I will not accept a check that doesn't have my name on it.

    Also get a self inking stamp of your name to keep with you when selling.
    Makes it a lot easier for your customer to stamp your name on the front.
    And for you to put it on the back.

  8. #8
    Join Date
    Nov 2012
    Location
    Vero Beach, Florida
    Posts
    23

    Default Re: how to start your own "small business"?

    Just get a DBA, It is all you need to open a business account at a bank. You are still personally liable, and can be sued personally until you incorporate; shielding you personally from the liability of the LLC.

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