Thursday, October 28, 2010

Transitioning From Hobby To Business

כ״א בחשון תשע"א
Phasma Priscus 23

Well, I did it! Yay! I really want to make this go while I have the opportunity. This is my chance to do it. Oh Goddess, make it happen!

I've started the transition of my witchcrafting from hobby to home-based business! I just got through filing an application with the state of Illinois to register WITCHCRAFTS by Liorah Lleucu as a business and to get a business tax ID number. This year I've had enough sales to make it worthwhile to at least try to grow WITCHCRAFTS into a full fledged business.

I am so excited, but a little bit intimidated about trying to figure out all that is legally required of a business. So, I bought "Home-Based Business For Dummies." I need to get it figured out by April 15th for sure. I need a bookkeeping system too. Right now, all my receipts and records are in a big box under my desk. That is not going to work at all if my sales really start taking off. I've got to get this organized or I may go insane.

I think I also may have to register WITCHCRAFTS by Liorah LLeucu (my "Doing Business As" name) with the County Clerk too, so that is next on my 'to do' list. Then, I'm going to create a business logo, and as soon as I get the money, I'm going to Trademark my business name. I wonder how much it costs to do that? Anyone out there know?


Harold Roth said...

Saving your receipts is a good idea, but a better idea is to save all your bank and credit card and Paypal statements that show any expenditures for your business, plus statements from your credit card processor(s). You'll need them to do your taxes to figure out what you paid out for what. I use these mostly instead of receipts, since everything I buy is with debit cards. I suggest getting the book Deduct It! from Nolo. Very helpful. Don't forget to make estimated tax payments quarterly. Self-employment tax is hefty. This is the portion that is normally paid by the employer instead of the employee.

It costs $500 last time I looked to trademark a word or phrase, but that for one specific use. I would not bother with doing that with this business name, because no one is going to take it. Trademarking is more worthwhile doing if you are using something fairly common for, say, the name of a product.

I wish you the best of luck with your biz. I have been selling items related to magic for ten years, and although I have made more money doing other things, I have not ever enjoyed another job as much as I enjoy this.

One piece of advice: try not to compete with anyone else. Carve out your own territory that is unique. That way you only have to worry about your customers, not your competitors. I suggest taking a look at "Blue Ocean Strategy" for a full description of this business technique.

Myfanwy said...

I do save all my receipts for supplies I buy online or through Paypal but I don't buy any supplies with a credit card, although I do use my debit card for supplies. I'm not sure if I have kept all my bank statements, but I think I can print all my bank transactions off electronically if I need too (as I can with all my Paypal and Etsy transactions as well).

Thanks for the book recommendation! I'll check it out.

Right now I'm not really self employed. In no way do I have enough sales at this point to make a living. I've had a total of only about 200 sales since I opened my shoppe in 2009 - I'm far away from being self employed - maybe some day. It is a goal of mine, for sure.

Estimated quarterly tax payments? Oh, I'll have to find out how to do this. Any information you can provide me on how to do this would be great! I'll ask when I go to register my business at the County Clerk for info on this, and/or call my tax preparer and find out what I need to do to keep legal.

I'll have to think some more about the Trademark issue - while it would be highly unlikely that someone would want to take my rather unusual name, one never knows the depth of catty maliciousness that can lurk in the heart of enemies or competitors who feel threatened by me.

I'm not sure that it's possible to be in business and not have areas of competition to some degree. When it comes to handmade items, one person's artistry and craftsmanship tends to make his or her items unique from another person's items. When it comes to art and magic, I think a person should do what they love to do and use themselves and not just do something because no one else is doing it, otherwise there is no art and no magic in it.

Business philosophy aside, I thank you so much for your sharing your expertise and well wishes! I'll check out "Blue Ocean Strategy" as well!

Blessed be you and your business!

Myfanwy said...

BTW, I love your blog!

Dare to be true to yourself.