Question – Hello, so I’m really stuck on business starting. so I’d like to do a craft sale just one time a week so like every Saturday at a certain time kind of like a garage sale type thing. But I don’t know do I need to have a business license or what should I get into because I don’t want it to become a big business and just want to sell from home so I guess what I’m trying to say is I don’t know where to start. Is that worthy of a business license or a sole proprietorship or llc?
Our Answer – Whether you need a business license or not is going to depend on where you live. Some communities will require a business license for any type of business activity, while others have no requirements. I think the biggest issue you may run across is from your neighbors. Most houses are in a residential zoned area and with that comes some potential restrictions on business traffic. All it may take is one neighbor complaining and then the city shuts your business down. You may live in a rural area and there are no restrictions, it just really depends on where you live. That takes you back to your local city hall/mayor to get a determination on what business activities you can run from your home.
I’m not an attorney but you will probably be fine as a sole proprietorship to start with as there is probably little likelihood of being sued. Maybe at some point in the future you may want to go full-time and an LLC could be a better option. That said, you will want to look at your homeowner’s insurance as you are probably not covered to have a business in your home. You will want to be sure you have liability insurance in case someone gets hurt on your property, especially as a sole proprietor because if someone does get hurt on your property, your personal assets could be at risk.
You will likely also need to get a sales tax license from your state, usually with the Secretary of State, as most states charge sales tax on items sold at retail. This number allows you collect a percentage based on the sales of your crafts and typically at the end of the month you send those taxes to the state. The last thing you may need to do, assuming you choose the sole proprietorship is register a business name.
For links to the various sales tax permits and registering your business name, check out our site.