So confused re:starting business

[honeysuds]

I'm really REALLY confused. I love soaping, have been doing it for the past 9 1/2 years, and everyone that uses my soaps loves them. I usually give the as gifts to friends & family, and a couple of doctors whenever I see them for visits. Well, we have a produce co-op in town, and I was approached recently and asked if I would be willing to make soaps for them to sell (I would sell to them whole sale and they would resell) which is like a dream come true for me! I've been waiting for an opportunity like this for years; I get to make soaps while someone else handles the "business" aspect of it, sign me up! But since I haven't been doing this as a business, I have nothing, no license, no insurance, no tax ID. I've asked advice and everyone says to just "try it out" for a few months and if the soaps do well then apply for all the necessary stuff. I get where they are coming from as I would hate to put money in at that level only to not have it sell well enough to even cover my costs after all the licensing/business fees. The other issue is we are a military family and could be moving in the next 6mths, so don't want to apply for everything here then have to repay/reapply when we move. At the very least I was thinking to get insured through the Soap Makers Guild to protect myself while "putting feelers out" so to speak. Thoughts, advice??? TIA!

 

[innerdiva73]

I would get the legal aspect out the way to secure your name and make a name for yourself ( U know what I mean) the last thing you want is someone after making a great name for yourself and building a great business, someone comes along and steals it right from under you. The business license is a necessary evil and if you plan on wholesaling, you may want to get your business license from your county and State tax id (the state tax ID I believe is free, and FEIN federal tax ID and its free). I know it may seem to be a lot, but secure yourself from woulda, shoulda, coulda and the "just in case" situations. ;-)

 

[innerdiva73]

Also, Don't believe that you won't do well because you can do well. Though this business is not a get rich quick business but it can be very rewarding in so many ways. Your local market is going to be the best course of action when it comes to marketing and getting your name out there. There are so many ways to market yourself and your product. Also, Steer clear of naysayers.

 

[eyeroll]

I assume you are in the US. The federal employer ID number (EIN) is free and fast to obtain. I don't have any experience with insurance so I can't speak to that.

You said you may be moving soon. That EIN will travel with you wherever you go in the US. Depending on where you move, it still may be possible to sell at the wholesale level, either now or in the future. Of course, you know better than I do whether that's realistic, but in general, I would say it's worth your effort to get things set up legally and properly first, if only for the peace of mind.

 

[honeysuds]

It seems like ALOT of work to get started, and maybe I'm feeling this way because I don't really intend to have a business out of it. Yes I love to make soap and would be glad to even make and sell the soaps to the co-op at cost basically to support my addiction. I don't need the extra money, but feel if I do that then I am hurting any other potential soap businesses in the area. I just want this to be fun and affordable for the ppl in my area. Guess I gotta think hard and really wonder if this is what I want after all. Thanks for the responses.

 

[judymoody]

It is really not that difficult to apply for a tax number, business license, web domain name, insurance, etc. A few days of your time should be more than enough to make sure you are complying with the law.

If you decide to go ahead, get the domain name first. If you register your tax ID under your business name first, chances are somebody will discover this, buy the domain name, and then try to sell it to you for big bucks.

For me, the major headache would be the ongoing paperwork. But if you were to do only wholesale, you'd not have to collect and report retail sales tax and that would simplify things. (At least that's what I remember when I looked into the possibility of selling; I may be wrong.)

For me, I decided that I was too busy to add a business on to raising my kids and holding down a full time job.

By the way, basic liability insurance from RLI is cheaper but is limited to $5,000 worth of sales per year. Don't know what kind of volume you envision.

 

[honeysuds]

Thanks for the info judymoody those things are definitely helpful. And that's just it...not to get too personal but I have a 10, 7, and 2 year old and a husband that is super busy, as well as soon to start deploying again next year. Which means I have to do it ALL, and starting a business in the midst of all that :wtf: I was stressing out just figuring out how much it would cost to make each bar of soap! I truly broke down every aspect it took me over a week to make sure I had it all right so that I could show the ladies running the co-op but I was exhausted by the end of that alone! The thought of everything else made me want to run for the hills lol. While some people have no problems juggling all of that, I have never handled overloads of stress very well. Again...lots to think about.

 

[Buttsmom]

If you decide to go ahead, get the domain name first. If you register your tax ID under your business name first, chances are somebody will discover this, buy the domain name, and then try to sell it to you for big bucks.

That is one of the best pieces of advice!!!!! Back in 2006 when I started my bird toy company I did it the opposite way. The day I found out my name was approved by the state I went to buy my .com and it was already taken. The person/company that bought it did contact me and offer it to me for $1500, needless to say I had to come up with a new name. So when I started making soap I bought a .com for the name I wanted. Don't know if I'll ever use it, but in the mean time no one else is buying it and going to try and ransom it to me

 

[savonierre]

I wish you well whatever you decide..

 

[Robert]

You don't need a d.b.a. or an EIN. You can start out operating under your own name and with your personal bank acc't. If you want to change to another name, you can always do so later. In some states soap is exempt from sales tax, so no sales tax ID may be needed either, even without a resale #.

 

[Jencat]

Depending on what you want to do, using a company like LegalZoom can make setting up a business much easier. We used them to set up an LLC for our eBay business and I'm planning on using them when I set up an LLC for my B&B business too. Things like getting the Federal and State tax numbers I do on my own, but for the LLC we need things like a Registered Agent and paying LegalZoom to do that is easier than finding someone local since we're pretty new here. You can pay them to do as much or as little as you want. We decided to create LLCs to protect our personal assets. I'm also planning on joining the Soap Makers Guild and getting insurance through them when we start selling. Selling without insurance is just to scary for me. Too many things can go wrong.

What state are you in honeysuds?

 

[honeysuds]

Hi Jencat! I am in the very south of Georgia, about 5 minutes from the Florida-Georgia border. There are a few local lawyers in town I supposed I could call and find out info about what the laws are on selling B&B stuff. Would be nice to have help from a legal standpoint to make sure I have all of my bases covered.

 

[judymoody]

Lucky you're on the GA side of FL. It is very complicated to set up a soap biz in FL.

 

[honeysuds]

AWWWW don't tell me that! Hubby wants to retire in FL once we're done in the Navy! I'm telling you I feel like a circus dog jumping hoops, and I haven't even applied for anything yet :think: Can you give me a little more insight into the difficulties? I was thinking of just going for it, working hard and making it happen from now until we're out of the Navy so that way I'd have my customer base and everything figured out with the legalities. But not if the Sunshine state is gonna give me grief just when I will need it to work out the most kwim?

 

[judymoody]

I have seen threads on this topic - you might want to do a search. I think you might need a dedicated soaping facility or have to undergo inspections or something of that nature. I don't remember the details and I don't live in FL. I just recollect that it was complicated.

 

[Robert]

No, actually Fla. exempted soap from its "cosmetic" regul'ns. However, the regs for everything but soap preclude doing it as a home biz. CocoaPink LLC couldn't afford to comply, so went back to soap only, sold the rest of the biz (including the name) to someone in Ga.

 

[honeysuds]

You all are really great! I think for now I will make a list of what I need to get things going and shop around for options and prices. Then, if we end up staying in GA will go ahead with the legalities and start selling even if its just through the co-op. Never know where it goes from there!

 

[soap_rat]

You may be able to get some great business advice from a SCORE office, which is supported by the US Small Business Administration and gives a lot of free advice. They have offices in a couple spots in GA, and I'm pretty sure they do phone consulting for people farther away.

http://www.score.org/