Is there anything you wish you'd done from the start?

[Wick'n'Wax]

Hiya

I'm in the process of setting up a website for when I'm able to sell my candles.... theres also the option of doing a christmas craft fair, although it may only be votives by then lol. Still testing everything else.

I was sat thinking today, of what I should be doing now, for if it takes off as a business. I know you don't make any profit for the first 3 years apparently.

But is there anything you wish you'd have done from the start?

Should I be saving receipts for things? If I sell something, how do I keep records etc? For those in the UK, when does the tax man kick in?

Do I have to have a business bank account? I'm hoping if I sell anything it will come through paypal, but there may be occasion of cheques etc.

Any advice? thanks xx

[MissMary]

I'm still starting but what I've done is the following:

Saved every SINGLE receipt and the credit card statements are highlighted with the items from the receipts. I've made an Excel spreadsheet of how much I've spent so far, versus how much I've made (zero right now lol).

I bought a different file cabinet for business items ONLY.

I got folders for each month, with the receipts separated by month, the statement for that month as well. A separate set of folders will hold sales receipts. (All this will be used next year on taxes, not sure if it's the same for UK.)

I do not have a business bank account at this time, simply because Paypal is doing all the processing, so I'm printing out Paypal statements instead. If you do take checks though, that *may* be something different since the check should be made out to your company. I don't know for sure, especially in the UK.

In my cabinet, I also have all my sheets for labels, business cards, flyers, etc. separated by size, and a secondary label indicates what that label is used for (I.E. 2" round vinyl white labels - 4 oz./6oz. tins, 2" warning label - 4/6 oz. tins, etc.)

As for sales records, I plan on printing out 'invoices' to send to the customer and will make a copy to keep for myself. It has my letterhead on it, along with a place to insert detailed info, such as scent, size, tax if applicable, etc.

Another section is cordoned off for fundraisers (which I plan to start doing for the Air Force sports and base activities), but there's nothing in there yet...

Another section in my file cabinet is recipes for each candle, each size, each scent, each wick, etc. I organized it into size sections first, then from there by scent and put those test sheets in there.

I have Excel spreadsheets that section off quite a few categories. I start with the candle size/type and then the sections are wax/wicks/labels/warnings/packaging/etc. broken down to the cent. Total that up in another category, put in my retail price in the next, then the final category is profit per candle.

Oy, after reading all that, I think I may be a bit obsessive!

ETA: Forgot to mention, I made another set of Excel's that lists what items I've bought and will buy again, the whole price, the item is linked to the webpage I bought it from, then list supplier with a link to the main page and the last category lists price per use. I.E. I paid 32.00 for a scent 2LBs scent from Peaks, the last category would list $1 per oz. That really helps when I do my price lists with all the categories.

[MissMary]

P.S. As for those receipts, ask your accountant how long to keep your receipts for tax purposes. My family in their several businesses keeps tax receipts for 7 years, in case of an audit.

[Wick'n'Wax]

thanks for your reply and...........

oh my god lolol.

so........ I need something more than this notebook and 1square foot on my desk then?

I need to get organised I know, but it was knowing where to start. Probably by buying a new ink cartridge seeing as I 've got to print loads out

I'm having to buy labels in at the moment, trying to source some round blank ones in UK to print myself.

Do I really have to look at what I've spent so far? (although the biggest 'lump' of that was birthday money, so does't really count )

I have one of those deep drawers in my desk (albeit its full of 'stuff) that holds the concertina? files you can get.

I'll get some and start using that

thanks

tidy desk, tidy mind

[beck180]

Planning is everything. I really wish I would have been a little more careful when ordering supplies, I've spent good money on things I never ended up using or some things i wanted differently. I'm sure you know how that can get, especially when you have a new inspiration.

Every dollar wasted could have gone to something that could have helped me reach my true goal. So... I'm really trying to think more before I spend.

[Wick'n'Wax]

I know what you mean. I nearly got sucked into a massive ebay auction. I pooled my saved money, my birthday money but managed to stop myself. I sat down, and decided what I really needed. Fo's, moulds, wick, wax etc and ordered it that way.

I now get wax at a good price (thanks Nat ), wick I get very cheaply, my fo's are all great and from the same lady and moulds, I've got a couple on order and saving for a few more.

I've also got some put by for a couple of embed moulds. Then, I need to watch myself

Although I'm writing everything down, I need it organised and central, so I'm nagging hubby to empty a filing cabinet tomorrow at work, for the suspension files lmao

[MissMary]

lol, I'm obsessive when it comes to anything to do with money!!!

The rest of my house.... not so much!

I just mostly started being so detailed when I thought about writing this stuff of for next years taxes. I usually do my own, but with starting a new business and so much in losses the first year, I wanted to be able to look at my note and trust that an accountant can read it all!

[so-soy]

Oy, after reading all that, I think I may be a bit obsessive!

Ya think????? :wink2:

[Di_in_AZ]

If you're not selling, how can you be saving receipts to deduct for taxes? It is a hobby otherwise and I don't believe supplies can be deducted for hobbies. I know when I set up my business, I had to give a start date for the business, and under the IRS there is a difference between business and hobby. If that is the case, then I have a TON of things I will be deducting, all the soap and B&B supplies I have been playing with.

Edit:

Here is a page from the IRS dealing with Business/Hobby. Startup expenses, etc. are handled differently--each is handled differently:

http://www.irs.gov/newsroom/article/0,,id=169490,00.html

[MissMary]

If she plans on setting up a business before the end of the year, which I believe she was since she mentioned Christmas, all the items that were purchased go towards the start of the business as research and development, which are considered under the start up phase of a business, which are considered to be write offs.

God, I'd hate to think what would happen to all kinds of businesses if they hadn't been able to write off what they paid for before 'opening the doors', so to speak.

As she said she plans on making this a BUSINESS and not a hobby, therefore it would be included in the start up costs. She's already mentioned business several times, not hobby, so even linking (OMG, you linked??) what the difference is from one to the other wouldn't matter, even if she was using the US's IRS for ideas.

You do not need a start up date at any phase to claim items on your taxes for the year, but you must report all profits and losses and be able to account for each and every penny.

It's also quite different from doing plain website sales, versus going out into the public and setting up shop.

[debscent]

I don't know if our federal guidelines are similar to the UK.

[MissMary]

Here's a link that might be helpful for you WnW being in the UK, since the info given to you by our posts is US based:

http://www.hmrc.gov.uk/startingup/index.htm

[sudsnwicks]

If you're not selling, how can you be saving receipts to deduct for taxes?

It's true you can't deduct, but I would save those receipts anyway. Because of the 200 lbs of wax you bought today, if 50 lbs of it is leftover when you do start selling, you could deduct those 50 lbs and so having the receipt around would enable you to figure out how much you could deduct.

[BLSoaps]

I know this thread has gotten a little off topic, and most of it has been focused on things you need to do during the start up, but I wanted to add this.

I wish we'd bought a laser printer right off the bat. We make & print all of our own labels, brochures, etc. The only thing we don't do is our business cards. We only invested in it this last February, and after playing with it for a while, we seriously wondered why in the world we waited as long as we did. It was definitely a decent chunk of change, but we viewed it as an investment in our business, and it has more than paid for itself.

[Di_in_AZ]

Suds, if you will read my post, you will see what I said was not etched in stone and posted as a question. I posted the IRS guide for reference. It was someone else who apparently wants to argue who feels the need to try and tear apart my post detail by detail and make sides of this when there wasn't an issue to begin with.

I think the bottom line is, people need to go to the IRS, attend tax classes and learn the law instead listening to the advice of the google lawyers that are popping up on this message board, who are not always right.

[Wick'n'Wax]

oops, I didn't mean to cause an argument, sorry

thanks for the UK link MissMary.

At present, I guess it is a hobby, whilst I'm testing, but as soon as enough is tested to start selling, then I'll open the website.

I intend listing everything I will be selling, but only when those items are testing, will I put them as 'in stock', until then, they will be coming soon.

Re: the post about labels, I definately want to do my own, even finding some cheap in the UK ready printed, is too expensive in the long run lol.

I think I'm basically going to save everything, month by month.

Hubby is scouring his works filing cabinets for stuff they don't need, as we speak lol. Knew he'd come in handy somewhere

We hope to move house in the coming months, and I am definately 'bagsy-ing' more than half a kitchen cupboard and 2foot of worktop for my candles

who needs to cook in a kitchen anyway?

[MissMary]

You know what Miss Mary? For some reason you feel that because you donated $20--OMG! that you own this place. There was nothing in my post that was nasty, vindictive or deserving of your reply. I was posting to be helpful. I fail to see why you are trying to stir yet again. No one on this board can post anything without you trying to jump on them. It is a shame that you take everything personal. What is your problem? Get a life already.

Good grief, can't take a small joke on the links. The rest of what I said stands and was on topic for what you had posted. As long as people post in a public thread, people are *gasp* allowed to comment. Quit trying to start fights where there's none to be had and insulting people. Calm down, take a deep breath, grab a bath bomb and suds it up.

Anyways, back on topic. I got this advice directly from an accountant for more than 30 years, who does the books for the bar, contractor's and screenprinting businesses my family-in-laws owns. You do NOT only have to write off only what you sold. You can write off anything you've used to get to the point of selling within the year, as I already mentioned as part of start up costs. Google wrote off 2 years of R&D before they even went live.

If it were the case you couldn't write off anything, then no business would be able to write off their initial product, signage, rents, utility hook ups, etc. before they opened the doors, which isn't true, you can.

Also, if you care to check the references, you can look up the difference between store front and publicly sold business versus home based sole proprietor business with a sidebar for web based business. The tax laws are not the same.

WnW

It's not your fault, don't you dare apologize.

You are more than welcome, I didn't know what else to tell ya for sure, since you are UK, so that's the best help I could be to you.

Those hubby's come in handy for bringing stuff home! Mine's brought oodles of boxes, paper for packaging, the metal straight edge for pillars, and so much more! Maybe you can sneak in a kiss to get some boxes to save up for later! Though I have no clue what bagsy-ing is, but I'm trying to take a wild guess and I'm thinking I'm probably way off, lol!

[Wick'n'Wax]

rofl, thanks Miss Mary

bagsy-ing, is getting first 'dabs' on something. Like saying you are having something before anyone else does.

Can I ask a dumb question what do you mean by writing off things?

[Cetacea]

Actually, your notebook is the perfect thing that you need right now. I don't go in for loose papers...I buy bound books (all that scientific training...its become ingrained...LMAO). So keep your notebook...and guard it well. Write everything in it. LOL.

As for receipts...I'm terrible about them, I have a basket that I toss them in and at the end of the year, I put them in order and add them up. It takes me about an hour or so. Invoices and show totals go in another basket...that's about an hour too. So 2 hours at the end of the year aren't bad...LMAO.

Just an offshoot here: I believe that bath bombs FIZZ not suds---of course mine never did, all they did was go flat. LMAO.

[Candle Man]

I can tell you wat I souldn't have done.

That is not wasting all my money on things that I thought I should have or can't live without. Also buying a lot of stuff you think you will make later sometime, only to find out you don't want to or don't have time to. Also buying things like B&B stuff that has a short shelf life. Then you have to try and sell it on here in the classifides to only get 1/2 of less what you paid for it.

Thought I would throw that in there, because we need all the money we can to keep this addiction going.

[Candle Man]

About receipts...

I'm very bad with paperwork and receipts but I try this when I can.

I have found some receipts to be very vage in the discription of what the product is. When I get back to the office I try to scan the receipt into the computer and then explain what each and every line on the receipt what it is & what I use it for (ex- office supplies, candle making equiptment etc.) That way IF you ever get audited you know exactly what the item is and what it was used for. Aslo about the scanning in the computer. I find that thermal receipts will fade or turn black over time, so if you scan them into the computer you have a back-up copy. You can also print out the copy of the receipt, with the detailed info on it, and attach the original to it and file that. I would still have the original attached, even if it turned totally black, because just the copy will not fly with the IRS.

[MissMary]

Candle Man, that's genius!

[MissMary]

Just an offshoot here: I believe that bath bombs FIZZ not suds---of course mine never did, all they did was go flat. LMAO.

Lol! I just meant to take a relaxing soapy bath, after some bath bomb fun.

I'm looking at some in a swap, been pretty curious, cause I think my 3 year old would giggle like crazy.

[MissMary]

what do you mean by writing off things?

lol, gotta love the slang confusions!

K, my first explanation I typed was as clear as mud, this might be a bit clearer!

In income tax calculation, a write-off is the itemized deduction of an item's value from one's taxable income. Thus if a person has a taxable income of $50,000 per year, a $100 telephone for business use would lower the taxable income to $49,900. If that person is in a 25% tax bracket, the tax due would be lowered from $12,500 to $12,475. Thus the net cost of the telephone is $75 instead of $100.

[Ramaroa]

There is a lot of public information out there on the inner web which can help you, of course there's also a lot you can ignore, but you can get a lot of your questions answered at places like this:

http://www.businesslink.gov.uk/bdotg/action/layer?topicId=1073858805

Tells you what you need to register for, tax and what records to keep. You need to get a good understanding of what is allowable as business expenses and keep everything. If you are using a portion of your home you can claim a % of your electricity, telephone, insurances, council tax, possibly petrol and milage expenses etc.

UK Tax year ends 31st March and you have to keep records for 6 years and anything up to 12 years for some tax records. It will pay you to become au fait with some basic accounting and get yourself an Accountant.