Is LLC right for me??? (Long)

[Tess]

Hi all. Well I have gotten some good news, but in a way bad news from DH. Now I have been pondering over this for a whole day, and have thought about my options, but I thought I could throw this out there to see if anyone else maybe able to come up with ideas that I may not see. Heres the dillema:

DH got a decent raise yesterday, and was told a big huge promotion is in the future if he wanted it. This promotion would more than double our salary now. BUT we would have to re-locate. Right now I have a really good local clientel at a craft show here. I make about 300-400 dollars from 9-4. To me this is good, and I don't want to let this go. If we move, I have start all over again clientel wise.

Now the good side is, We will be able to afford a nice home, a huge workshop for me, and even an SUV which will help me with the buisness, and toting things around. Not to mention I will be closer to my local suppliers for Jars and Wax.

So now that I have broken the board with the bandwith of my long story, I have come down to an idea. I am thinking of having someone take over my craft show here, so I do not have to lose my clientel, while I make a another clientel or "branch out". I am thinking my best bet would be to have this person on consignment, where they would make 45% of the show earnings. Which is just under my wholesale for me. Basically I provide here with enough stock and a full set-up at the show, and all she would have to do is set-up, sell and break-down. So in order to do this do I have to become LLC? Would she be an employee or is there a special consignment or percentage thingy?

I am open to all suggestions so please help me see the light lol!! Thanks a bunch to all who were able to read through all of this!!

[Casey]

you'd need to be an LLC for that, but you should find out for sure, i could just be making stuff up . LLC's are costly to obtain and it takes time. Also, you'd have to get all your suppliers to underwrite you on their biz insurance and it will generate a lot of extra ppwk and such (legalese mumbo jumbo type ppwk, ick), and they might not be willing. Some suppliers might view it as more of a PITA than your yearly purchases are worth. My BF works for an engineering firm and they just flat out refuse to to business with LLCs.

So, just thinking out loud here...I think that the person you get to do this could be an "independant contractor" i.e self employed. That way, you pay them their percentage per month or whatever, and if the amount for the year exceeds something like $500, you'll need to provide her with a 1099 for taxes and thats it. No workman's comp insurance and whatever else you'd need to be a legitimate "employer" in your state. You claim it as expense deduction, and she's responsible for her end. Like a Rep. What might complicate this is that all the equipment belongs to you, which may disqualify the independance aspect.

Also, finding a person willing to do it long term and be reliable is not as easy as one might think. Purchasing a second set-up might end up costing you more than you'll make if they lose interest. It's your craft and the candles are your babies, so you have a lot of emotional capitol invested. Someone else has none and it might get old fast if the money isn't what they hope for. So maybe look for someone that does the show anyway for their own stuff, and adds your stuff. That would be simplest, come to think of it. That way, it's just a wholesale account .

Do ya have a website? If they are loyal clientel, many of them may be willing to continue purchasing from you online. Get a mailing list and keep in contact with them that way. I dunno how far you're moving, but you could send them postcards announcing where you'll be if you do other craft shows or send out e-mail for new fragrance announcements and such. Okay, I'm done.

[Tess]

Thanks for the info!! That was very helpful, since I did not know about the paperwork with suppliers.

I have thought about getting someone to sell my stuff wholesale also.

I am worried about losing clientel, simply because I sell at a local "market days" and they are buying because they are there. Although I do think some would buy online, not everyone has internet acess, or may want to go through the inconvienence of ordering. They buy my stuff because it is right there, they can choose scents and smell new ones, and If I am not there they buy from someone who is. Even loyal customers of my competitors there buy from me instead when they are not there. I just don't want to even give the oppurtunity to my competitors. I hope I make sense lol!!

I like the idea of a wholesaler though, I may have to look more into that at this months market days.

[sharyl55]

I know it is hard to pull up stakes and relocate but you'll have opportunities at your new location as well. Best case would be to find someone else at the market to carry your products. Be sure to factor in the cost of shipping your products back to the old market when you run the numbers.

[Paulette]

Tess, What I would do if it were me is I would have her get a business license, sell to her wholesale and then she can sell herself and pay her own taxes. If she is willing to get a license then you know she is serious about selling and will stick with it longer.

Oh and congratulations on the promotion!!!

[7Angela7]

If it were me, I would also just go around and try to find a wholesale account or consignment. You could tell your customers where they can buy your products, and if the store doesn't have the particular scent they always order from you, maybe they could put in a special order and you send it with your order? It just seems like a lot less hassle than working out the details of having an employee type.

[Tess]

Thanks All!! I think I may go the wholesale outlet. There os even a store areound the market days, that I may try to get my stuff into. HEy I already got a clientel there the store would already have a list of clients from me lol!! Thanks everyone!!

[dragonflycandles]

I just wanted to let you know about becoming an LLC. I just filed for my LLC. It only cost me $175 to have my Accountant do it for me. You can also have a lwayer do it, but that is where people are talking about it being expensive. There are many different types of LLC's and you would need to talk to your accountant to find out which one would best suit your company. The reason I got my LLC is to help protect the home I am in the process of purchasing. If you own any assets it is smart to become an LLC to separate your business from your personal belongings in case someone were to ever sue you. There are also other benefits like like your business renting a room from you personally and other write off type things like that. Your accountant will be able to tell you more about those.

Do you ship orders to customers? If your loyal customers know your address they could always order long distance and you could ship them. Just a thought. Good luck with everything. You will always pick up new customers in your new location.

Tracey