How My Hobby Became a Business

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Let me preface this post to say that these are just my steps that were taken for me to turn my hobby into a business.   Every state/country has its own rules and guidelines, so things may be different where you live.  With that being said, here's what I did:
  1. Found a business name that would be broad enough to encompass what I do, but specific enough that people who come across my business name would have an idea of what to expect.  That's also why a tagline was needed.  I also wanted a broad name so that if I ever decided to create a subset business, I could do it underneath the same business name.  For example, my official business name is "Artistic Expressions by Elisabeth" and the tagline (for now) is "inspirations in photography & the fiber arts".  But now people are contacting me for photo shoots and I don't want that mixed in with everything else, so I created "AEE Photography".  And yes, the "AEE" stands for Artistic Expressions by Elisabeth, but it has its own website (coming soon).
  2. I had to change the name I wanted because there was an art store with the same name in a neighboring county, so that didn't work.  Here are two helpful sites:  Starting a New Business, Choose to Register Your Business/DBA.
  3. I also checked registered names through Go Daddy to make sure that if I wanted to eventually have a website that I could reserve one for the future.
  4. I filed for a Sales and Use Tax/Tax ID # with a CPA.  I chose to do sole proprietorship instead of a LLC.  You can always change that later.  I think it may have cost me around $100-150, but LLC was $300.  And I also registered my business in my county court house.  That cost $15.
So why did I do all of this?  In NC, there's a certain amount you can make and consider it a hobby, but there are some craft shows that require a Tax ID# just to participate and I was afraid to sell online and not be covered by the law.

Once I became an official business, I opened a different Etsy account under the new name and started all over.  When I file my taxes, the same accountant that did the paperwork for my Tax ID also does my personal taxes.  And now that more funds have come in from my crafting and photography, I'm able to write off a certain percentage of my house bills because I am a home-based business.

The next segment will be on how I manage my business.

Until then, I hope that this information can be beneficial to someone.

Happy Crafting,

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  1. You are so sweet Libby. Thanks!!! Great starting off points. :)

  2. I probably should do this...sometime things seem complicated and required time...but it would probably be a good idea

  3. Libby,

    This is very important! Here in Brazil there SEBRAE, organization that guides small business owners.

  4. Libby, this is very helpful! I have been terrible about this aspect of my business, I have made a commitment to myself that this year I would do it RIGHT! So I thank you for this information! Always, Connie

  5. I don't have a tax id, which is bad, but fortunately, I never seem to sell to people in my own state! I will be combining my Etsy sales with the antiques booth sales, so I think I'm going to have a net loss for tax purposes. Are you required to register with the county? Is that because you do local sales?

    1. Truth be told, I don't really charge tax. I just try to put it in the total cost. I know now on Etsy you can fix it where it automatically collects tax from certain states, but like you said, I never seem to sell things online from my state. But for shows whatever the tag says, that's what it is. I'm not sure if every county requires you to register, but when I file my quarterly taxes with my state, I also have to pay like 2% to my county. Each county has a different % rate. Also I know some that have a business registered in their county, but not with the state, depending on what they're doing. And they have it because some farmer's markets or places where people vend like every Saturday may be required to show their business license. It really all depends. Honestly, I asked a bunch of hypotheticals to my accountant before I ever did this.


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