Licenses & Taxes & Insurance…Oh My!
It’s not nearly as scary as it sounds.
You came back this week so I’m assuming that means you are ready to get going with this owning your own business thing. I know a lot of people who have gotten to this point and given up because they did not know where to start (*sheepishly raising my hand*). I’ve been there more than once myself. Let’s make sure this doesn’t happen to you. While you will have to do your own research based on where you live and plan to conduct business, I can point you in the right direction and hopefully make it a little easier for you.
Where and how you obtain your business license is going to vary based on your city/county/state government. I suggest you visit your local government’s website for all of the details. Generally you will first need to visit your zoning office for a valid certificate of occupancy. If you plan to use your home as an office only this is an easy step. If you decide on a home studio the process will be a little more involved. It is a possibility that you will not be allowed to have clients come to your home based on zoning regulations. Don’t panic. Ask questions and you are more likely to get the results you need. And maybe that retail/rented studio space is for you after all!
After the zoning office you will be ready to obtain your business license. In my case the correct office was located in the Occupational Tax division of the city government. You will need your certificate of occupancy (or the like), ID, an original business name not already in use, and about 50 bucks. Easy peasy! Ready to hang out the sign and bring in the clients, right?
Yuck! But get comfortable with them. They are not going anywhere. And let me just start by saying that I am in no way a tax expert. But I do know that no matter where you live you need to pay them. Make sure that you get a Federal Tax ID #. Head over to IRS.gov. You will most likely need to charge sales tax and you need this number to make sure you are getting those taxes to the right place. Sales taxes can be paid quarterly or once a year. You will report your income and expenses on your 1040 at tax time each year (so keep track!). Again, your local and state government websites will have all the information you need specific to your location. Don’t be afraid of this process. And if you know a great accountant this may be a good time to practice your bartering skills. Everyone is going to need photographs at some point and you may be surprised at how many small business owners love to trade services.
Take it from the girl who dropped her camera and favorite lens in the river at the end of a family session, YOU NEED INSURANCE! And not just for your equipment. You need liability insurance to cover yourself and your assets in case something happens to someone in your studio or on location. If you will be leasing a studio space you will not be allowed to sign a contract without proof of insurance. Again, do not be afraid. I carry a business liability policy covering my leased space, liability up to $1,000,000, and $15,000 in equipment coverage. This policy costs me $450/year. And although this will vary based on your location, lease requirements, and equipment coverage needs, the cost won’t be much compared to the peace of mind it affords. Most likely the same insurance company you use for homeowners and auto can assist you with a business liability policy.
That was a lot of information, I know. But I hope it gets you on the right path to getting your business up and running. Just take it one step at a time and you’ll get there. I’m so excited for your new adventure!
Come back next Wednesday and we’ll discuss the big decision of what products and services you want to offer. After all, we REALLY want you to continue to LOVE what you do!