First, a disclaimer; 1) I am not a lawyer and am not in any way qualified to offer legal advice. 2) I am also not qualified to offer business advice more than relating my own personal adventure into the world of retail. 3) Finally, everything in this post reflects my opinion gained from personal interaction and research.
Here are some helpful resources if you’re more inclined to seek professional legal services for starting your business:
- A Trusted Registered Agent: Northwest
- Most Trusted LLC Companies with the Best Services
- My Assessment of Nolo.com Services
- A Full Review of Rocket Lawyer against LegalZoom
- An Analysis of ZenBusiness Services
- A Business Service Option: Incorp
- A List of the Best and Cheapest LLC Services
- A Guide on How to Setup an LLC
- Which Should You Pick: LegalZoom or Incfile?
- Bizfilings Reviews
- Full Assessment of Legal Zoom: A Personal Review
- Reviewing A Top Business Service Provider: Incfile Services
- A Roundup of the Best Registered Agent Services of Today
If you’re interested in knowing how I DIY-ed the process, read on.
Every day we see advertisements, on the TV, the internet, in magazines of ‘normal everyday people’ who decided that they didn’t want to work for other people anymore. They wanted to be their own boss, do their own thing, live as they want to live. We see them floating in their pool, sipping on their drinks with the little umbrella’s in the glass, smiling and laughing. The came from nothing, and ‘in just a few short months’ they were making more money than they could ever decide what to do with! Well, my wife and I both like pools, and, come to think of it, we both like the little drinks in the small umbrella adorned glasses too. So, we decided, ‘why not’, and proceeded to start our own retail business. Well, it’s a month later, and we still don’t have our pool.
Of course, few if any of us believe the advertisements. Selling their plan for getting rich to you is how they plan to get rich. A few of the more legit ones will even be honest with you and tell you that you will have to be willing to work for it, but they slip that in real quickly and then just as quickly go back to telling you about how much money you will make.
After reviewing several of these different types of programs, we decided that we could save the up to thousands of dollars that some of the programs cost and start a retail business on our own. Lesson number one; legitimate wholesalers will not sell their products to you without a tax ID number. This make sense if you think about it, they’re wholesalers, which means they want to sell only to people who resell their product. The best way to prove that you are a retailer is to provide your retailer’s tax ID. This is also good for you, if you can buy their product as a ‘normal’ person, then so can all of your potential customers. Why would they come to you?
Ok, so we need a tax ID. Well, first thing we needed to do was form an actual business. There are several types of businesses, each with their own advantages and disadvantages. After doing several days of research, we decided on a Limited Liability Company (LLC), primarily for its taxation status. Ever helpful, there were several sites on the internet where people were happy to take ‘all the work and frustration’ of forming an LLC off my hands. They were willing to do all of this suffering in my place for as low as $249.00 too! Again, not one to easily part with money, we decided to do it on our own. The worst of the suffering was trying to find a parking spot downtown near the state offices. I located and downloaded the appropriate form from the internet. After researching to make sure that the name we wanted wasn’t already taken, we simply filled out the form and drove down to the capitol to turn it in. We could have mailed it, but living only about 20 miles from the capitol building itself, it was quicker to just go there. Cost? It was $100.00 to file, period, no other fees. If our business doesn’t make it, I may just start offering to take other people’s ‘suffering’ off of their hands for the low price of $249.00. (Mention this post and I’ll give you a discount)
Less than 24 hours later, we were an official ‘entity’. The next steps were even easier. A quick trip to the IRS website allowed us to apply for an EIN (Employment Identification Number), though not always required unless you employ others, it doesn’t hurt to have. Next was a click to our state’s website for a “Sales Tax and Use permit”. Since we are getting in the retail business, we will be required to collect the appropriate taxes on the items we sell. Other states variously call it by other names, such as a “reseller’s license”, but it’s all the same, and you are required to have one. (As mentioned earlier, this is what wholesalers require too) The state revenue office kindly provided us with an online form to fill out and print. Again, we had the choice to mail it, but in the interest of time (the sooner I’m in the pool, the better) we took it by hand.
We started on Monday and by Friday we were an official business, and so far the whole trip had cost us only $100 plus a bit of gas. The final step was a local business license. Our city requires that businesses operating out of a residential office have a permit before acquiring a license. The permit and the license were applied for in the same place though, so basically it was just another fee to pay. “Home Occupation” permit; $50, Business License; $25. Two weeks and $175 later, we were real. I suggest checking Zen Business Reviews if you wanna launch a business yourself.
The biggest lesson we learned in this stage is that, with a little research, some common sense and a printer, you can do a lot more yourself than you think. My ‘suffering’ wasn’t enough to justify the $249 charge.