Jimbo2 Posted January 12, 2008 Share Posted January 12, 2008 I started a small, at home candle business this November. Right now, I am selling almost all the candles directly to friends and associates but also have a couple of beauty salons in town that are carrying my candles. I hope to expand this to about five or six salons that will carry my products. As you can tell, this is a small operation which suits me fine in retirement. I've read a few posts on insurance but would like to get some good suggestions from the veterans out there on what I should do about it given the type of operation I am running. I make my candles in my basement using two Presto pots. I put warning labels on the candles and provide a "candles do's and don'ts document. For a small operation like I have, do I really have to be worried about it at this time?I should also point out that I have not yet registered my business. I intend to do this if it takes off a bit more, but with current gross sales estimated at $2,000 or so a year, I am thinking that I am too small to bother with it. If I expand more and if I decide to try marketing the candles through a web site I will definitely do this. Right now, my goal is to make some nice candles that people enjoy burning and giving as gifts and making enough money to support my golf habit!Any advice would be welcome. Thanks. Quote Link to comment Share on other sites More sharing options...
debscent Posted January 12, 2008 Share Posted January 12, 2008 You should be a registerd business and pay the taxes, fees etc. that are required. This is more than a hobby and you are having a third party (salon) sell your product. And yes, insurance is necessary, unless you are wealthy enough to withstand a civil lawsuit and monetary award. You should think of it the same way you view health insurance, you have it in case you need it. I put out a lot of money per year for my LLC taxes, business license, website fees and insurance. It's all part of owning your own business that all of us dream about when we work for someone else. Quote Link to comment Share on other sites More sharing options...
Beth-VT Posted January 12, 2008 Share Posted January 12, 2008 I'm sure you are already in violation of your states regulations. If you are selling, you need to be remitting state sales tax (I'm assuming your state has sales tax). That means you need to register your business which is generally no big deal. You can register as a sole proprietor, the fee is usually very small if any. Then you need to get a tax number which can be called a number of things from state to state (Tax ID, wholesale#, etc.). It is NOT a Federal Tax ID (FEIN), you do not need that. Check with your states comptroller's office or Dept. of Taxes. You'll be required to submit your sales anywhere from monthly to annually depending on your sales volume. It's not a big deal to register, really, and your much better off being legal now than getting popped and fined later. As to the insurance, get it. If you're selling you need it, Period. Labels do not protect you. Your home, retirement, livelyhood can be at stake, it's simply not worth the risk. JMO. Quote Link to comment Share on other sites More sharing options...
MochaMama Posted January 12, 2008 Share Posted January 12, 2008 I had no sales when I first started out - but I registered with the state and got my insurance anyway. Debscent and Beth-VT gave you good advice. So much better safe than sorry.Good luck with your business! Quote Link to comment Share on other sites More sharing options...
Jimbo2 Posted January 12, 2008 Author Share Posted January 12, 2008 Thanks to everyone for your excellent advice. A couple of quick follow-up questions. In addition to making sure my property is covered in case of a fire or accident while I am making my product, a separate policy is needed to cover this. The policy would also protect me in case a customer started a fire with one of my candles and decided to sue. Am I correct here? I have checked out the RLI website to look at coverage. Since I would be a small operation and plan on getting a quote from them, but would anyone like to hazard a guess as to how much the premiums would be for a policy covering a small operation? I know it varies from state to state as well. I am in Missouri. Thanks Quote Link to comment Share on other sites More sharing options...
MissMary Posted January 12, 2008 Share Posted January 12, 2008 Yes, you will need product liability insurance to cover anything you sell. Premiums are VERY subjective, due to states, what's in your home, what you want to insure, piggyback coverages, etc.For just the product liability aspect, I use the Indie Beauty Network. For the insurance and the membership, it was $500 a year.But as far as home and property, that's so dependent on the type of home, size of home, state you are being underwritten in, and how much coverage you want. Quote Link to comment Share on other sites More sharing options...
debscent Posted January 13, 2008 Share Posted January 13, 2008 My business is a LLC. I work for a tax attorney and he advised me to go this way. This protects my personal assets from being attached if my business is sued. Now, it does not protect you from being sued as an independent party. I would suggest you make a consultation appointment with a reliable CPA or tax professional to answer your questions, the answers here may not be applicable in your state. Quote Link to comment Share on other sites More sharing options...
Meridith Posted January 13, 2008 Share Posted January 13, 2008 Be careful too as your homeowners insurance might not appreciate you running a business from your home. I'd make sure that it is O,K with them as well or you could run the risk of losing your HOI. That would not be a good thing. If I was you, I would get my business registered and get insurance pronto!! And I would do it before I made another sale. I would never run my business without either one. To do so, IMO is like asking for trouble. Regardless of how small you are. Better safe than sorry. Good luck. Quote Link to comment Share on other sites More sharing options...
flutterbye Posted January 13, 2008 Share Posted January 13, 2008 Jimbo2, I am in Missouri as well. I chose to go with the Indie Beauty Network for insurance because I couldn't find anyone to offer me the same type of coverage for that price. Some companies quoted me as high as $8500 a year! You need to register your business as well. If you are caught or ever audited, you may be in some trouble. It's really simple in MO. Just register as sole proprieter for a sales tax # (for what you make, the bond should only be $25) and register you business name from the secretary of states website, if you have one, (it's only $7). Here is a link to the MO DOR http://dor.mo.gov/tax/business/register/ you will find alot of useful info here. You should be collecting & remitting sales tax on anything you sell. You'll find your sales tax rate through the DOR website link. It seems like it's gonna be a big pain at first to do all this, but it's really pretty easy to take care of. HTH! Quote Link to comment Share on other sites More sharing options...
kat88 Posted January 19, 2008 Share Posted January 19, 2008 I am in Ohio and thinking of maybe expanding my candlemaking hobby to selling (homebased business only). Does anyone have any suggestions on whether I should start with a sole proprietorship? I know the differences between sole proprietorship, llc, etc. and have already researched insurance. I only want this to be a small homebased business with desired sales of $5,000.00/year or less. Any tips/suggestions would be greatly appreciated. Quote Link to comment Share on other sites More sharing options...
SatinDucky Posted January 21, 2008 Share Posted January 21, 2008 I am in Ohio and thinking of maybe expanding my candlemaking hobby to selling (homebased business only). Does anyone have any suggestions on whether I should start with a sole proprietorship? I know the differences between sole proprietorship, llc, etc. and have already researched insurance. I only want this to be a small homebased business with desired sales of $5,000.00/year or less. Any tips/suggestions would be greatly appreciated.You will likely get more help if you start a new thread of your own. Many people wont even see your question down here... Quote Link to comment Share on other sites More sharing options...
Suna Posted January 22, 2008 Share Posted January 22, 2008 Be careful too as your homeowners insurance might not appreciate you running a business from your home. I'd make sure that it is O,K with them as well or you could run the risk of losing your HOI. That would not be a good thing. If I was you, I would get my business registered and get insurance pronto!! And I would do it before I made another sale. I would never run my business without either one. To do so, IMO is like asking for trouble. Regardless of how small you are. Better safe than sorry. Good luck.Meredith, you are absolutely correct. I was just going to mention the exact point, I'm not too sure in the differences between US and Canada, but I'm in BC and here, your home-based business activities can void your home insurance. So Jimbo2, if you own your home...you should really look into that aspect. Good Luck!! Quote Link to comment Share on other sites More sharing options...
Draco Posted February 24, 2008 Share Posted February 24, 2008 I am starting to think about doing this as a bussness as well, but I was only thinking about selling to my coworkers and maybe at flea markets. Would I need to regester as a bussness yet, or am I to small to worry about it at this point? Quote Link to comment Share on other sites More sharing options...
SatinDucky Posted February 25, 2008 Share Posted February 25, 2008 I am starting to think about doing this as a bussness as well, but I was only thinking about selling to my coworkers and maybe at flea markets. Would I need to regester as a bussness yet, or am I to small to worry about it at this point?If you SELL, it's a business. But since you're just beginning you still have at least a few months, probably longer, before you need to worry about selling and that stuff Quote Link to comment Share on other sites More sharing options...
Draco Posted February 27, 2008 Share Posted February 27, 2008 If you SELL, it's a business. But since you're just beginning you still have at least a few months, probably longer, before you need to worry about selling and that stuff I understand what you are saying here Ducky. I think what I should have asked is if anyone knew where I could find the laws in may area that would apply to when and if I would have to register here Quote Link to comment Share on other sites More sharing options...
anceproducts Posted February 27, 2008 Share Posted February 27, 2008 I understand what you are saying here Ducky. I think what I should have asked is if anyone knew where I could find the laws in may area that would apply to when and if I would have to register hereThe way I understand OHIO laws (not sure where you are from) if you are planning on just selling at flea markets etc. and if you use YOUR name (not something like, Heavenly Candles, but just your first and last name) all you would need to do is to obtain a vendor's license. In Stark County, this is $25. If you want to use a different name you would also need to register a fictitious name with the Sec of State. I found all this info just searching online, go to your state's homepage. Ohio has a new business thingy where you put in all the info on your business, and they put together a packet you can download and print with info on loans for your type of business (not that you should need it with candling, although I know an extra $x0000 for candle making would be a ton of fun!!), loans for your specific minority, and all the forms for vendor's license, fictitious name etc etc. Maybe your state does the same thing. Quote Link to comment Share on other sites More sharing options...
anceproducts Posted February 27, 2008 Share Posted February 27, 2008 It also printed out a checklist of things you may need to look into, which was helpful. It categorized bath and body with candle making, so a lot of it was not useful to me NOW but in the future may be. I think it may have been ALL crafts, actually because I think it said something about woodworking too. Quote Link to comment Share on other sites More sharing options...
Draco Posted February 28, 2008 Share Posted February 28, 2008 I am in PA myself, will have to check out my states website after my "hopefull" move with my partner into a apt. with more than 4 small rooms. Quote Link to comment Share on other sites More sharing options...
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