The essentials for transforming your craft from hobby to business.
Ready to make the leap from crafting as a hobby to crafting as a vocation? The transition can be a bumpy one, especially if you haven’t done your homework. As a crafty business owner, you’ll have to grow comfortable wearing many different hats, not just making them.
Designing and creating your products is just one facet of the job — you’ll also be responsible for accounting, marketing, shipping, customer service, and more. Time management is also an issue, as you’ll need to be prepared to put in far more hours than you’d work at a day job. However, as entrepreneur Susie Ghahremani ( boygirlparty.com) notes, “Every day I enjoy my business and feel satisfied, and I can’t say I ever had a ‘real’ job that made me feel so proud of my work and personal growth.”
Before handing your walking papers to The Man, take time to educate yourself. Many community colleges offer classes in small business management, web design, and bookkeeping. Full-time crafter Tess Lee ( madebytess.com) took a few classes in Dreamweaver and Photoshop, and highly recommends the experience for anyone interested in working for herself. “Even if you don’t design your own website, you can do your own updates,” Lee explains. “I’m a big DIY-er and want to do everything with my own two hands, if at all possible.”
The vast majority of crafters operate their businesses as sole proprietors, which means using your Social Security number to register your business. Call your State Board of Equalization (BOE), and follow their instructions on how to obtain a resale license, which allows you to legally sell your goods. You’ll be required to collect and file taxes on these
sales, so be sure to factor this into your prices. Having a resale license also means you can purchase craft supplies at wholesale prices, which is a must if you hope to make a profit selling your wares. Some states allow you to file your license via mail, but visiting your BOE in person can be a valuable experience, especially if you have questions — they are often free and easy with business advice and useful reading materials for new business owners. Overall, filing for your resale license is a simple (and usually free) process.
If you plan on using a business name other than your own, you should also file a fictitious name statement (also called a DBA for “doing business as”); this too is as simple as filling out a form, usually at your County Recorder’s office. Once your paperwork is filed, you’re usually required to publish a notice in a local newspaper announcing your DBA. When you get your DBA paperwork back, it will be accompanied by offers from various newspapers to run your DBA notice. Choose the best deal, and you’ll probably end up spending less than $75 altogether.
Once your DBA is in place, you’ll be able to open a bank account under your business name, which comes in handy if you want to be able to cash checks made out to “Kuddlekrafts,” or whatever your business name might be.
Depending on where you live, you may also need a city business license and/or home occupation permit — contact your city’s Office of Finance to make sure. The filing fee (if any) will vary from city to city, and many cities offer small-business exemptions, meaning you won’t pay any city business taxes if you make under a certain amount
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