Business Liscense/Insurance ?

[ChristineMarie]

Good morning, everyone. I have been making/selling candles to friends and family for the past 3 years now and have sold at a few craft shows. Word of mouth has been bringing me more and more customers over time and I was wondering how "big" do I have to get before I need to apply for a business liscense and need to have insurance? Does anyone know where I can get more info on this? Or maybe you can help me yourself? Is it expensive to have insurance? Any input would be much appreciated. Thanks!

[ChristineMarie]

Of course after posting this I looked around a bit more and pretty much found answers to the previous questions I had posted. Insurance seems pretty costly to me! But now I realize it is something I truly do need to have if I am going to continue selling candles...I will just have to kick things up a notch to be able to afford insurance cost's. One question that still remains for me is:

Do I need to have a business liscense to get insurance or vice versa?

[LuminousBoutique]

It depends on your state how much income you need to make each year before you need to pay taxes, I could be wrong but I think Utah is $600.00. So, not alot.

You should have a business license before making any sales to the public. I know there are some catches, like if you are at a boutique art sale which is licensed, and is selling your items for you and charging the tax themselves.. but again you have to pay tax on the earnings if it is over $600 in a calender year (at least here.)

Its not hard to get a buis. license, just go for it!!

Insurance varies, just call call call. I was turned down by 6-7 insurance companies when I first started, they considered it to be too much of a liability (laughable since I dont know a single person who's ever had a claim made, but its important we have it in case that does happen). Look into the indie beauty network, Handcrafted Soapmakers Guild, both of those are around $500 a year. You might be able to find it cheaper, but HSG is a GREAT organization to be with. The only downside is its required to be paid up front... but they really are top notch.

[maxie114]

If you decide to forgo the insurance for cost reasons (i.e. your just not doing enough business to justify the cost), make sure you make your company an LLC. So if some idiot does decide to come after you, they will only take the business which will obviously not be that valuable and a waste of their time and NOT your personal assets (which you could lose everything).

If you go this route search for LLC threads for advice, I think there is some good stuff out there. You will need to get a business license I am sure to get insurance. (but I'm not sure)

[LuminousBoutique]

I got my insurance before I got my license... but I agree about an LLC! Its a bit more costly in some states, but its worth protecting your assets.

[Meridith]

I would not under any circumferences forego the insurance. IMO its a must whether you are an LLC or not. A lawsuit, while not likely to happen, and whether you are an LLC would still be costly. One lawsuit is all it would take to possibly ruin someone financially. I believe that if you can not afford insurance, you should not be selling - not even to family or friends. Its better to be safe than sorry. Affordable insurance is out there but it can take time to find. Don't give up.

Also, be careful is running your biz from your house. If you are a renter, your landlord and his/her insurance might have some issues as might your HOI if you own your house. Just some food for thought.