I know this is kinda O/T but then it isn't. I finally got a shop to work out of and I'm thinking about trying to get a business license and what not to start my own shop. I know there is alot to it but what all do you have to do to go about it? What all do you have to get also like licenses and tax permits that sort of thing? Any help would be appreciated. Thanks. Don
Visit your local City Hall and start asking. They can guide you to the right departments. Do the same with your county government. Make sure you have all your state stuff taken care of too. Keep asking do I have the proper licenses and premits. It ****s to get shut down after you've started. Most of these governements have an office specifically for licensure and business affairs. Talk to your insurance agent too. You'll probably need some form of business liability insurance. I'm sure a lot of guys on here can fill in the stuff I overlooked. Good luck, and keep on trying.
Also set up a separate checking account and put some funds in it. Then write all of your expense checks from this account so you can take it off of your taxes. The first few years of setting up my business I bought lots of equipment and it was all deductable from the taxes so Uncle Sam paid a large portion of it. And keep good records so you know where the money is going and if the feds ever come looking you will have the proof you need.
Everything above plus: Write up a business plan. Look in the phone book and call SCORE - the Service Core of Retired Executives. They exist to give you free advice on making a succcess of your business. They will look over your plan (or help you write one) so you can succeed. Good Luck!
The small business administration has a packet (including a checklist) of the things you need to do to get your biz rolling. First and foremost - incorporate; I recommend doing so as a limted liability company. That way, when some goof wants to sue your for his stupidity, he can't go after yer house, yer dog, or yer rod. I believe everything you need is at sba.org to get rollin'. Not a lot of money is needed for licenses, incorporations, and such - just some time and some patience.
Form a corporation for your business and run everything through it. This will protect your personall ***etts: life savings, kids college tuition fund, couch, TV from law suits and creditors. They might wipe out your business but not you. It is easer than you think and the best insurance you can have. Also, become friends with all your customers so they don't want to sue you.
What if you have no intention of actually making any money? Ha Ha Ha How can I write off all of my expenses (since all I do is go to hot rod shows and spend all of my money on cars) as "business"? I suppose you actually have to show a profit somewhere. My fic***ious shop "Hot Rods From Ur****" has failed terribly at that. I suppose you actually have to get rid of something every now and again.
First off look into forming an LLC with your business to isolate your personal property from any business property as was said to insulate your private stuff if the business has to liquidate. You can get this done through your attorney for a reasonable fee. Licenses and permits may vary from state to state but you will have to have a Federal ID# in any state. In my state we have to cover workers compensation, unemployment compensation, state and local taxes in addition to the federal taxes for medicare, social security and federal witholding. This may sound goofy and a bit of overkill but last year we purchased an accounting package for our business. Download in your PLC and it's pretty easy to set up and use. Keeps all your expenses totaled and does any and all payroll. We print out all the business checks to our vendors with it as well as all payroll checks. We bought Peachtree and I think it costs about $200.00. I had a local CPA set it up and train my son (my partner in the business) in operation for a nominal fee of around $150.00. At the end of the quarter we take him a disk and he prints all the reports for Feds, state and local. This costs another $100 each quarter but I'm not worried about an audit. Aat the end of the year he does all the business IRS stuff and my & my son's taxes for $400.00. We get audited by insurance companies periodicaly and by workers compensation about every year. My son prints all the reports they request to see before the auditor arrives and we've never had a problem. Insurance can eat you up but it's an item you can't overlook. Liability in case someone other than you gets injured, liability for building contents and liability for the work you do for your customers. We pay $3700/year for liability of 2 million just to get in the customers gates to do work. Phew! No wonder we didn't make any profit last year.
I started as a sole proprietor then as an "S" corp and then finally a corporation. The sales tax and Fed ID # are needed to get any break on prices from any supplier. Otherwise you are just another retail customer to them. My local county gov. required a 2000.00 performance bond from my insurance co. (cost me 75 bucks a year) Check your local gov.
Lots of good advice here. One other thing you might check is with your city or county economic development agency. It's a government en***y (it may be called a RE-development agency) that often offers incentives for new business like tax breaks, permit waivers, etc. It's worth a check. Good luck.
Don't forget to register your ficiticious name.... As far as showing a profit, your allowed show a loss for up to three consecutive years. So, for your first three years you don't have to show that you made a dime.... After the third year though your business is downgraded to "hobby" status if you don't show positive cash flow by years end. Only the federal government is allow to run a business that looses money every year... and they don't like no compe***ors!
What everyone else has said, insurance is #1. A good Lawyer, preferably a good friend, because at one time, you will have to deal with being sued. You will still have to pay a lawyer to talk to their lawyer. DONT HIRE FRIENDS!!!!! is the other one.
Oh, ya. One other thing. If you are going to spend the next 20 or 30 years building up your brand name and logo, you might want to get them registered as trade/service marks and copy right them. You want to do the trade/srvice mark thing in your state and at the federal level. May not be worth much now but your are gonna be POed if 30 years from now you get your mark snaked by some *** in the state next door or someone else gets your mark registered federally before you do...all that work building your reputation only to hand it over to somone else does not sound like a good deal.
Tips For Starting Your Own Business 1. Kiss your wife, kids, hobbies, friends, and everything else GOODBYE. 2. Choose which 18 hours of the day you would like to work. 3. Choose which college you would like to send your insurance agent's children to. 4. Give your lawyer the keys to your house and cars. (He's going to own them someday anyhow.) 5. Change your calenders to exclude weekends, holidays, and birthdays. Your week now reads: M M M T W Th F. 6. Get your head examined... Seriously, a lot of good advice has been given here, IMO the most imprtant are incorporation, insurance, and good legal advice. If you don't have these 3 things, chances are good that you will take one in the cheeks at some point. Good luck!
If you think that the IRS can't sniff out guys trying to write stuff off, you are wrong. They don't play games and they aren't kidding. They will allow a few years of losses, but then you are in the scope. If they find an infraction they have the power to padlock your doors and ask questions later. You pay what they ask or your stuff gets sold and you are responsible for what still owed in their opinion. Small business is not a game and you better have your stuff together or you will surely fail. Your original post pretty much gives the clue that you aren't prepared for this until you gather more info. Been there, done that and it any always fun. Your chance of success is statistically 2 out of ten. Now go out there and get'em tiger, and remember that we love you.
Great advide on the board. Here are my suggestions as we just went through this too: 1.Call your local town hall- find out IF the garage is legal to use as a body shop (you may be surprised that the location may not be legal to be operational as a business) . 2.Get a lease from whomever you are renting from - most of the places you will deal with once you are a 'real' business will require a copy of a writte lease- especially insurance companies. Make sure they understand and agree it will be Ok to operate a business from there- even if the town says OK- Get everything in writing. 3.Grab yourself a FED ID # (TIN) for tax ****. You can apply right on the Web. 4.Apply for a state ID # too if your state requires it. 5.Get a business certificate from your town- this may be easy/hard to do based on # 1 above 6. Call your insurance agent- your state may require insurance to protect the property (yours and customers) as well as Workers comp insurance- yep in our state (M***) even ONE employee (meaning yourself) requires workers comp insurance - an extra $1300 a year . Our total cost for insurace alone was almost $3K 7.Get a checking account separate from your personal one. May require #3 and 5 to do so (our local bank did)- deposit $$ in there ,leaving extra for a rainy day so you dont bounce any checks 8. Get more cash - you will need it- set up ran us almost $30K this year to become a legal business in our state and we have now been open in our current location about 6months. (Our spray booth alone was $12K) 9. if you accomplish all of the above and still want to do continue, get in touch with OSHA and the EPA to find out what the rules are for waste oil , spraying and the like- you may need a company to haul out your hazardous waste when you get some . 10. contact an account & attorney- no more explanation there. -------------------------------------------- A couple of thoughts in addition: Beleive in yourself. you CAN do this. Understand your limitations. Don't say you can handle a chop or channel if you havent done one. It will only get you in hot water later with a customer. If you want to be able to sell them to customers learn on your own **** first. Do everything LEGALLY- it will only bite you in the *** later if you don't . The last thing you want is someone official guy coming down and locking your doors one day.... Have a contract for customers to sign- it protects THEM as well as YOU. That way if they decide to pull the ride or you decide you dont want to work on it anymore, you wont have as many legal troubles as you could. Again- get it in writing- I cant say that enough. Let your buddies know you are serious- this will be a business- not a hobby with checks from people coming in. That was the first problem we had- our pals didnt realize this is now where our bread and ****er comes from- it aint a hobby no more.... Set some ground rules- when they can stop by and hang around..... Dont hire friends or people you THINK are your friends. Hire who is BEST at the job. Dont let other dreamers talk you into (or out of) doing what you love . If you have true talent and p***ion, you WILL succeed. Good luck ! Feel free to PM me with any questions - Ill be glad to answer anything I can .
A license is sometimes needed depending on what you're doing. You'll need a waiver and a "hold harmless" form for your customers to sign so you can test drive and be certain that THEIR insurance is primary on the car you're working on. Otherwise the insurance is very costly. You DO NOT want to insure some 6 figure ride gettin a re-finish. The hold harmless is in case some dip-**** hits you on the road...as is THEIR insurance. The rest is good advice especially from STIFF. It will own you for the 1st 10 yrs MINIMUM. The independence is awesome but serious dedication is 24/7. And your boss? He'll become a complete ***hole at times. You'll meet him every morning...over the top of your bathroom sink. Good luck man...been there, still there, but part-time now. And pay your help either flat rate or commision if you can. Hourly is approx their wage plus 17% costs to you.
I didn't read every post, but here's something I did: Go to a couple different Mom & Pop shops (anything--florist, hardware store, hobby shop, baseball card shop) and see who they're using for an accountant. I **** with numbers, so I found an accountant that had a very good word-of-mouth reputation. When I went to him, he helped me set up my S-corp. He has an attorney he works with to handle the paper work, he filed for the fic***ious name and placed the ad in the newspaper, filed all the governement paper work, and charged me $600 TOTAL to do it all. When it was done, I had all my numbers, articles of incorporation, etc. Again, I did it with someone who I came to trust, based on a friend I know who has a family business that had gone through a couple of accountants. Even if you can't find one to do all that for you, find an accountant to handle your taxes (gotta do them four times a year baby!), and he'll explain to you at what point it goes from business to hobby because you didn't turn a profit. Poor accounting has ruined more businesses than anything. -Brad
When you promise to get a 4 barrel intake for a Y-block, Keep Your Promise! Unfulfilled promises have a long tail.
All I needed to do in Kansas is register with the State (for a sales tax #) and the Feds (for IRS purposes), named my business, keep all receipts of **** sold and **** bought, and let an accountant take care of it. Anyone can start a business... as a matter of fact, an accountant would be a good place to start, they are usually pretty cheap, and do AAAALLLLLL the paperwork involved. Paperwork makes my ears bleed. So does Brittney Spears.
you do have to do all your homework, but its not that hard. get a licesnes, and an accountant. keep all of your recipts. get inc. im not but will be soon. ive been doing this for almost 3 yearsand with the exception of one month of no work and dreams of mexican surf, all has went well.oh yeah, keep your home stuff seperate from your work stuff. and, keep the loafers out. they may be friends, but, when you got kids to feed they are nothing but a drain.
I agree with what everyone else has said...some very good advice given. Here's what I would like to add; It is possible to incorporate and file the respective legal forms for your state all by yourself without having to pay large bucks for expert advice. There are many books & software to be found on how to do this stuff yourself regardless of the kind of business it is that you want to start. I did it...so can you. But, do find a quality CPA and Business Attorney to review your paperwork and business plan (if you have one). Discuss what it is that you want to do and expect to accomplish before jumping into the water. You will find that the more respectible firms will not charge you a dime to give you the initial advice you seek. Why? Because they are hoping that you will succeed and will use their services later. Don't look up the lawyer that usually does wills & divorces at discount rates...you want one that does nothing but represent small/large businesses. Same with CPA's. Go quality and you won't ever regret it. Do some research, ask around, and you'll find the right people....just make sure they're not relatives. Good luck.
A lot of great advice! I would especially make sure that you are legal with all permits if for any reason, FUNDING. You will need money as operating capitol, due to lead times on payment and equipment. Plus you will have supplies and supply bills. Don't piss off your supply house and string them out or not pay them. Kinda like ****ting on your own doorstep. Pay your bills at all costs, it will bite you in the ***. Quickest way to get a bad rep is have 3 or 4 companies out there you owe money to. Bad news WILL travel faster than good. Good luck!!
Very good advice - Ill also add make sure to keep invoices for everything once you are in business. Your paper trail (or their lack of one) may be the only way of getting you out of any sticky issues with suppliers and vendors. Another suggestion is to have good customer service. Stand behind your employees and your product- there Aare always others out there that do what you do- sometimes its just as simple as who is nicest to the customer to get the job (not always but it does help to actually make them feel like they want to come back) and if you know your stuff and product. As I mentioned before- dont try doing work you havent done before or cant produce proof on doing (like pictures) -back it up. Id also like to add just one more thing you might want to consider before doing anything- customer base. Are you in an area where you will be able to pull work from for AT LEAST the first year? Are there 'car guys' who would come to you or is it an area where most people do it yourself? Do you need drive by exposure? Does the shop have it for what you need? Is the hobby supportive of your venture in the area? Can you obtain quality employees, supplies and advertising? All these are factors as well- if you have a shop, and do quality work , it isnt always enough if no one will travel there (or can find it!) or you cant get staff to work for you. Market research shows the best locations are one within 5-15 miles of a major city unless you are a HIGHLY specialized business. Your first year in business will be a great learning experience and probably not much of a profitable one- good thing most suppliers recognize and understand this- Definatley keep in contact with them on a constant basis- 99% of them will be willing to work with you on payments if you run low on funds- especially if they beleive in your work. Our suppliers actually ask for our business cards now-to give out at OTHER shops- and stop by even though we are no longer in their service area... its nice to see.... M*** B is right- the worst thing you can do is get a bad rep for something in the custom/cl***ic world- it travels much faster and wider than you expect to people you didnt even know existed.The hobby and industry is much smaller of a world that we all think it is. Even we have been surprised at how many people knew about our shop & work when we went to the events . We went to a show this past wekeend and people from out of state (CT & NJ) mentioned they had heard about our shop and our work- its cool when the shop starts to take off- and frightening at the same time. Good luck - you are welcomed to call our shop anytime and chat about the business of custom & cl***ic auto body- we would welcome the call-even if its just to hcat about nothing.. .
Alot of folks here are recommending forming an LLC, but from what I've read/heard from several business owners, it might be worth looking into an S-Corp. You get the protection benefits of the LLC, but the ease of paperwork like a sole proprietorship. Or something like that... Good luck! Ben
We looked into both for the speed shop and decided to go LLC. It was a few years ago and I can't remember why now, but it made more sense for LLC. I think it was either insurance deductables or taxes.
Profit from an S corp flows directly to your personal tax return as income. It is not subject to any social security tax though. That can turn into a pretty substantial amount of money in your pocket vs. sending it to DC. Get the pros and cons from a good accountant.
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