How soon to safely start selling?

[Bnky]

The attorney I spoke to explained the same thing as Kittywing's friend, to form an LLC to protect your own property. (Your LLC could still be sued; but your personally not at risk). In addition, purchase liability nsurance to protect your customer (for serious allergic reaction or whatever). I would suggest both, which is easy to do. Chances are you may never need either, but it offers security for seller and buyer.

 

[TheSoapyEwe]

I have an LLC and Insurance and wouldn't even consider selling without both.

 

[JenniferSews]

And you would be comfortable NOT HAVING INSURANCE? LLC or not?

Selling 5 or 10 bars a month on a site like Etsy, and not even covering the cost of insurance? Sure I would. On a large scale, no. As you pointed out some venues require insurance. But everyone is different and every business model is different. I've never had insurance for any of my home based businesses. Our accountant suggested it as protection for our losses in case we lost our inventory in a fire, etc. Liability was never mentioned, even for children's products. Honestly I can't imagine the odds of being sued over a bar of soap.

 

[SilverMaple]

I was told an LLC was a waste of time, that it doesn't protect your personal property like it used to.

Not to mention it costs thousands to set up, and the taxes for it are much more complicated. When I asked about it, they said it wasn't worth doing unless I was making over 50K per year from soap, which I'm not.

Maybe it's just a pain in my state and others have difference experiences, I don't know.

 

[TheSoapyEwe]

I was told an LLC was a waste of time, that it doesn't protect your personal property like it used to.

Not to mention it costs thousands to set up, and the taxes for it are much more complicated. When I asked about it, they said it wasn't worth doing unless I was making over 50K per year from soap, which I'm not.

Maybe it's just a pain in my state and others have difference experiences, I don't know.

In Missouri it cost me less than $200.00 to set it up and that's a one time fee.
It does keep my personal property safe from any liability suits. Only the business assets would be at risk and that's where the insurance comes in.
The taxes aren't any more complicated here than having a DBA business which I also have for another business I have.

It will vary from state to state I'm sure, however I strongly urge everyone to get a free consult from an attorney or a CPA before deciding not to carry an LLC or Insurance.

I feel both are just a responsible part of being in business and clients do in my opinion feel more secure when their dealing with an insured, licensed business.

 

[JenniferSews]

Mine cost me $35 to set up online, and took about 20 minutes on the CO Secretary of State website. It varies by state though. Taxes were complicated, but only because they were business taxes and it was a pain. But the same would be true even with insurance.

Definately consult a CPA, always!

 

[SilverMaple]

Two attorneys have told me the a sole proprietor as opposed to an LLC is the way to go. I will have to check into it more.

And I agree about insurance-- I will not sell without it.

 

[Guest]

I was told an LLC was a waste of time, that it doesn't protect your personal property like it used to.

Not to mention it costs thousands to set up, and the taxes for it are much more complicated. When I asked about it, they said it wasn't worth doing unless I was making over 50K per year from soap, which I'm not.

Maybe it's just a pain in my state and others have difference experiences, I don't know.

My CPA said the same thing. Said that I would pay much more to have my taxes calculated because LLC complicates things so. Said that I could still get sued personally. I decided against LLC.

 

[Tabitha]

I was told an LLC was a waste of time, that it doesn't protect your personal property like it used to.

Not to mention it costs thousands to set up, and the taxes for it are much more complicated. When I asked about it, they said it wasn't worth doing unless I was making over 50K per year from soap, which I'm not.

Maybe it's just a pain in my state and others have difference experiences, I don't know.

My LLC cost me under 200 bucks. I do my own taxes, in under an hour, w/ turbo tax buisness. Sounds like a lot of people have been fed incorrect information.

 

[TheSoapyEwe]

My LLC cost me under 200 bucks. I do my own taxes, in under an hour, w/ turbo tax buisness. Sounds like a lot of people have been fed incorrect information.[/quote]

I agree that others might be getting incorrect info on this, Starting my LLC was cheap, easy, and I also do most of the work for my account, adding up and organizing my supply costs, postage costs, festival entrance fees, mileage etc.
I tally everything up at the end of each month so it's a breeze to hand over to her at the end of the year and it's just around $150.00 for my accountant to prepare for me. (and that's on both of my businesses)

 

[Guest]

The topic is "How soon to start selling soap"
I've been making soap for 18 years and decided I'm going to sell it.
Starting at a farmer's market locally.

 

[heyjude]

The topic is "How soon to start selling soap"
I've been making soap for 18 years and decided I'm going to sell it.
Starting at a farmer's market locally.

Castorfan, your soap is beautiful and you really know your stuff. I'm sure you'll do really well at the farmer's market. Taking pictures to share is a given.

Jude

 

[kittywings]

And you would be comfortable NOT HAVING INSURANCE? LLC or not?

If you want to sell to bigger wholesale accounts, chain health food stores, most larger craft/expos - like Natural Products East/West, you have to make them an additional insured on your policy. Even my little 3000 person a weekend farmers market REQUIRES an Additionally Insured Rider.

I suppose that Etsy doesn't have a policy, but then I don't sell on Etsy.

Yikes! No way would I not have insurance, I was just talking about the LLC thing... which is $50 in AZ, one form, very easy.

 

[BluebirdMama]

selling without liability insurance? Noooo way.