Starting a business -- bare basics, help?

Discussion in 'Homesteading Questions' started by Cygnet, Mar 4, 2005.

  1. Cygnet

    Cygnet Well-Known Member Supporter

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    Help!

    I can find all sorts of resources on fairly advanced concepts of starting a business -- things like how to get loans, accounting, advertising, etc. I don't need THAT. I've got most of the "stuff" I need already built/purchased and I don't need a bank loan.

    I want to start a business selling started, vaccinated, healthy exotic and rare-breed pullets to the "pet" market (a friend calls them foo-foo chickens) and selling most of the cockerels for meat. I HAVE people literally knocking on my door already, the customer base is there. I just want to be "official" and not working under the table.

    What I need is the absolute bare basics. WHAT DO I NEED TO DO TO KEEP THE GOVERNMENT HAPPY IF I START A BUSINESS.

    Do I need to register with the IRS or not? How are taxes handled? Will I be filing twice in the future, one for me, one for the business?

    I've established I don't need a state business license and I'm specifically zoned for raising poultry (as in, it's written specifically into the zoning in so many words that you can raise and sell poultry).

    *beats had against the wall* I want to be official, do it by the book, not get into trouble with the govmn't, etc. And I just can't find the nuts-and-bolts never-owned-a-business-before information that I need. I've even talked to friends and family members who don't seem to understand that I KNOW ABSOLUTELY NOTHING AND I AM STARTING FROM SCRATCH AND I FLUNKED ACCOUNTING and start talking in terms way over my head, or profess not to understand things either.

    I'm not stupid. But I haven't a clue even where to begin. Help?

    Oh, they're trying to incorporate this area. Developers. I want to be officially a business on the books so if they incorporate and try to change my zoning I A: have grounds to fight it and B: can make them pay me for lost business if they zone me out of business. Grr. Hate developers. Hate politicians. Grrr. Grrr. Gives me more of a legal leg to stand on if I'm "official", no?

    Leva
     
  2. BCR

    BCR Well-Known Member

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    For free confidential business advice online, go to SCORE.org and sign-up for an e-mail counselor.

    Meanwhile, go to IRS.gov and request the information/publications which have to do with self-employment taxes (you pay Estimated Taxes quarterly) and small business information. They have a Virtual Small Business WOrkshop available to help you out as well as a CDROM called "Intro to Federal Taxes for Small Business/Self-Employed".

    Do a search on line for whatever state you are in and "business license registration". Also call your county clerk and ask about any requirements for your county. Outside of city limits- then don't worry about the city clerk. Contact your extension agent for farm use rules in your state.
     

  3. Jen H

    Jen H Well-Known Member

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    Is this going to be a sole-proprietorship? Meaning, are you going to be the only owner of the business? Do you intend to have any employees?

    Yes, you do need to register with the IRS, and yes, you will be filling out different sets of tax forms. The IRS will want you to pay estimated taxes quarterly. The income you make from your business will be reported on your annual tax return, along with the estimated taxes you've already paid.

    The paperwork doesn't have to be complicated. I run our ledgers basically the same way I handle the check book register (I didn't do much better in accounting than you did). Every month or so I hand the works off to a bookkeeper who spends about an hour making everything look official. With the scope of business you're talking about, the checkbook ledger thing would probably be fine. The other thing that might get a bit complicated is if you have to collect sales taxes - if your state doesn't require a business license then you probably won't have to collect tax.

    I hear ya about establishing your rights to keep animals! With all of the partitioning going on around me I contacted the previous owner and established 150 years of livestock on this land. No matter what, I'll always have some critter wandering around, just to remind the eventual neighbors that this is indeed farm land.
     
  4. Mike in Ohio

    Mike in Ohio Well-Known Member

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    Jenn H,

    I disagree with your statement that Cygnet will have to register with the IRS. IF it is a sole proprietership she will need to fill our schedule C and if she has depreciable assets she will have to fill out that schedule (I forget the number off the top of my head). For employees she would use her SS# as her EIN (Employer Identification Number). She is better off avoiding employees to start or using contractors.

    Quarterly filings for estimated taxes would only need to be made if you are actually making enough money to have to pay the taxes. I would recommend a basic tax/accounting course through a local school.

    Cygnet, you may want to get a State sales tax ID number even if your poultry isn't subject to sales tax (don't know if it is or isn't....depends on your state). The reason is that you will be able to give that number/show the certificate when you are buying supplies for your business. This (generally) will allow you to not pay sales tax on the items you are purchasing for your business.

    Good Luck.

    Mike
     
  5. Cygnet

    Cygnet Well-Known Member Supporter

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    How would quarterly filing work if I'm only making money half of the year?

    Our summers out here hit 115. Sometime around early May, when it starts consistently getting into the triple digits, I'll put most of my breeders in the freezer or sell 'em as layers, next year's breeders get moved into the breeding pens, and I go into "survival mode" until sometime around mid-october when it gets cool enough to start hatching again.

    It's just too hot for adequate fertility, the air's too dry to run the incubator, and I lose a significant percentage of two-year birds.

    Sooo ... I only hatch from October through around March.

    OTOH, as far as the tax ID goes, it's occurred to me that I might as well have other "stuff" at the swap where I sell my birds -- feeders, waterers, incubators & fertile "hatching" eggs (clearly marked "do not consume" ... *grin*), etc. Most of which would be taxable.

    Leva

     
  6. snoozy

    snoozy Well-Known Member Supporter

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    I am surprised that your state doesn't require you to have a business license. Where are you? I can't imagine a state (also, check the county or municipality) foregoing a source of revenue :haha: !...

    There is a great book called "Small Time Operator". It's in its 20somethingth edition, and available everywhere and in every library. Get it.

    The basic things to record for your accounts are:

    A] What money came in, from whom, for what, and when?
    B] What money went out, to whom, for what, and when?
    C] What's left?

    A - B = C, and C is positive if you made a profit and negative if you lost money.

    Schedule "C" is the IRS form which you fill out to present this information to the IRS. See? Not too hard to remember. If you get a copy of a Schedule C, you will see the categories into which your expenses will be sorted (that's money out, or "B" above.)

    You need to contact the county or state about what taxes you need to collect from your customers for the two different categories of goods you are selling: live pets/animals, and meat, if you are selling them butchered. You need to call up your dept of ag to find out the regulations pertaining to selling meat. If you are selling them live, then pet or farm animal should be the same category, I would think.

    That's about as basic as business gets: Money in, money out, what's left.
     
  7. Jen H

    Jen H Well-Known Member

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    When I ran my landscaping business, for the first 5 years I used my SS# as my business identifyer, but the IRS certainly did have me classified as a business. The IRS does have a website that answers most basic questions about who should/should not register with them and how to do it.

    For the quarterly taxes, during the half a year that you're not selling birds at all you simply write "no business activity" on the form and mail it in.
     
  8. BCR

    BCR Well-Known Member

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    You pay your quarterly taxes based on quarterly earnings...no earnings, no tax payment. Don't forget to pay quarterly to your state if it has an income tax.

    Youe local Small Business Admin Office, as well as your local SCORE (Service Corps of Retired Executives) often host very low cost or free workshops on "Getting Started in Business in [your state here]". An online SCORE counselor can walk you through your business plan and provide you with other resources as well. It is a free service.
     
  9. goatlady

    goatlady Well-Known Member Supporter

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    snoozy, lots of states do not require business licenses, mostly it's cities that require them for businesses within the city limits. I have had several home-based businesses, out of the city limits, and only had a state sale tax license. You can use a SS# for income tax purposes. When a business is not the sole source of income there is a LOT less paper work and regulations.
     
  10. stonefly71

    stonefly71 Well-Known Member

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    Goto H&R block and ask them what you need they will give you a booklet that has all the tax info in it you should need I know they did back when I was a sub-contractor. They gave me a few books and told me how to go about keeping records and all and it didn't cost me a cent.
     
  11. snoozy

    snoozy Well-Known Member Supporter

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    That may well be true. In WA we have a Master Business License. My first business was a travel service in Seattle and was a sole proprietorship. Then I did a teahouse & tea importing business, again in Seattle, and that was an S-corporation. Now I'm doing tea importing and internet sales, and I am maintaining my corporate status just so's I have a history with the Customs Dept. If I changed to a sole proprietorship, then I'd lose my tax ID which is used in importations, and I'm thinking that having an unblemished record of honest importing will be helpful in future importing. Perhaps i'm delusional. :haha:
     
  12. roncarla

    roncarla Well-Known Member

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    If you don't have any employees, you shouldn't have to get a FEN. We have always run our business for Ron's SSN (for 17 years). However, we are going to hire employees this year so we will get a FEN. Although, if you are charging sales tax, maybe that requires a FEN. We are a service company so we don't charge sales tax. Your county may or may not require a business license. Our county does not which I think is rather bizarre. Our state doesn't even require that we register a business unless we are charging sales tax. Either that, or I didn't get a correct answer when I called the county officials and state officials.

    At times, we have had a business checking account and at times we just run it out of our personal account. A business account costs more so if you don't care, keep it all in your personal account instead.

    About filing taxes quarterly, although I sometimes wish we would have done that in the past when we were making more money, it's really not necessary.

    Get a two-part invoice book to start with! It's much easier in the beginning to keep track of your sales. Once you are comfortable with a filing system, I suggest going to single two-part invoices. Then you can drop your copy into a file for later tax figuring. Keep a 9x12 manila envelope for receipts for anything you purchase for your business. Mine is labeled 2005 Receipts and I can just pull it out at tax time. Makes life easier.

    Our philosophy is keep it as simple as possible. Your goal should be to sell your product, not take care of endless piles of paperwork.