a craft show business when you're really an artist at heart may be a
rude awakening for you. Nevertheless, if you decide to turn your hobby
into a business, you need to switch hats from time to time. You wear
your artist hat when creating and producing your crafts, and you put on
your businessperson's hat when you're running the business end. Begin
successful on the craft show circuit doesn't just mean you have a great
product; it also means you have a decent head for business.
Planning your craft show business
It's not absolutely essential to write a craft show business plan if
you're not seeking a loan or partner, however, it can help you focus
your business goals from the start. There are numerous books and Web
sites on how to write a business plan, and most will fit with craft
shows just fine. The most crucial elements are the financial
projections--which include your estimated income and expense for the next several years--and the
marketing plan. The marketing plan helps you identify your target
audience and how you can best find and serve them. This is essential as
you develop your craft show product and find the right shows at which
to sell. If you are seeking capital or a partner, you will probably
need a complete business plan. If doing this overwhelms you, contact
your local Small Business Administration, Small Business Development Center, Chamber of Commerce
or local universities to find help with developing a professional
business plan for your craft show company. At this point, you may also
seek the advice of an attorney to decide what business entity yours
will be--a sole proprietorship, a partnership, a limited liability
company or a corporation. You can always grow into corporate status
later on, though it's advisable to at least know your options up front.
Licensing your craft show business
Most cities require any business, home-based or otherwise, to register
and purchase a business license. These range in cost from $15 to $100
depending on the size of your city and are obtained from the city
clerk's office in most cases. It makes your craft show company official
and enables you to conduct business legally. Find out if your city
requires any special-use permits for operating a home-based business. The rules may differ if
you have customers, supply trucks or employees coming to your location.
You may also need to file a fictitious name statement with your county
offices if you call yourself anything other than your name, such as
Posh Pottery. This guarantees that nobody else in your county is using
the same business name. From here your file the name with a newspaper,
and then you can open your business checking account. It's highly
advisable to keep craft show business income and expenses separate from
personal if you are serious about being in business. Then on a regular basis, you can "pay"
yourself from your business account. You can also now file your taxes
as a business entity and take advantage of the many tax exemptions for
businesses. Car expenses or mileage, supplies, overhead costs and more
are all deductible. Find a copy of a schedule C (www.irs.gov) to see
some of the expenses you can write off.
Now you have officially moved out of the hobby status and in to the
serious craft show business. Actually the IRS considers your enterprise
a hobby if you haven't made a profit in two out of five years that you
file as a business. If that happens, it's time to rethink taking your
goods to craft shows as a business venture.
You will probably need to get a resale (sales tax) license. This allows
you to buy wholesale anything you will be reselling and not pay taxes,
however, you need to charge tax on your crafts and then submit it to
the tax board either monthly, quarterly or annually. Check with your
local state board of equalization or state office of taxation to find
out what their rules are. It
doesn't cost anything to get a resale license.
It's helpful when starting
out to set aside a savings account for your sales tax to be sure you
have it when it comes due. Also check with your sales tax
office if you are required to collect tax when you're selling in other
states. Some show promoters collect tax from you at the end of the
show, so you
need to keep accurate records, which you can do by issuing a receipt
with every customer purchase. Make sure you find out the amount of tax
you need to charge at the show as it varies by city, county and state.
Also, it's a good idea to carry your sales tax permit everywhere--you
may need to pick up some supplies, and you can avoid having to pay
taxes on them.
Each city, county and state has different regulations regarding
licensing, so make some phone calls to find out what's required, and do
this well before your first craft show.
Article provided by:
Rob Goyette shows you how to make your craft show business profitable in his best selling ebook: Craft Show Success Secrets. Visit his site.
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