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©2015 by Charles Plesums
Austin Texas USA
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OK. You have a great hobby. Woodworking or some other craft. You are either still working regularly, or are retired. Why would you want to start a business? Wouldn't this just be a big headache?
Actually you don't have to "start a business" in the usual sense of forming a corporation or other business entity, getting a storefront, and registering a business name to sell your crafts. This web site is focused on how you can have a business very simply. And when you do, it provides a tangible financial reward for your efforts. If you seriously attempt to make a profit (and are successful at least some years), it will no longer be considered hobby by the government. It can pay for your expenses (and hopefully some more), and as a business (not as a hobby), if you have a loss one year, that loss can be carried forward to offset the profits in future years.
Sometimes I joke that I love to pay taxes. No, I am not crazy (or at least I don't think I am). But the only reason you have to pay income taxes is that you make money. If you don't make any money, you don't pay any taxes. So in that sense, paying taxes means I have made money. My wife, the accountant, sometimes frets that I spend so much on equipment and supplies, but then wishes my expenses were higher when calculating our taxes. Nice problem! We have paid taxes on my woodworking "business" every year!
A good friend says "I have the tools, I have the time, I have the skill, but I have built all the furniture needed for my home or by my kids. I need a project! He needs a business. Or in my case, I love the challenge of fulfilling somebody else's dreams and desires.
Do you have to work 40 or 80 hours per week? Or can this be a part time or "casual" business? See the discussion on hours worked
Can you answer the question "so what do you do?" in 15 seconds or less? In the dot com days this was called the elevator talk
I saw an article on the internet by someone who had spent (wasted) $20,000 developing a business plan. He gave me permission to reproduce his article here. But I have written a more practical (inexpensive) discussion of business plans.
The internet is a powerful inexpensive tool to advertise a business, even one dedicated to local customers.
Should you be a contractor - modify or expand other people's property? In many jurisdictions, contractors have to be licensed. In almost all cases, you need extra insurance (what if the thing you screw to the wall happens to go into the "misplaced" gas pipe? That is an honorable business (usually), but I choose to "not go there." I tell my customers that if they want bookcases built into an alcove, I would be glad to build a bookcase that fits that alcove, but I will not install shelves directly on the walls of that alcove as a contractor might. (Of course my bookcase can be taken with you when you move, even if it had been sized to fit the alcove.)
Should you work for other contractors? Sub-contract your services? Yes and no. I have been approached by other contractors many times - to build some bookcases (but the design was set and the shelves would sag - they were too long) or to build cabinet doors (but I am not as cheap as Home Depot), and they would be glad to pay me as soon as they are paid (yeah, sure). Generally I avoid that business. However, there is one business for whom I have built doors, legs, feet, columns, and other specialized components. We have worked together for years. He pays me when he picks up the work. We have become good friends. So there are exceptions to "don't subcontract."
Those who have seen me play golf, know that anything other than golf has got to be better. But keeping a retiree off the golf course may be a virtue. Why am I picking on golf?
In addition to topics that you may request, this section will be expanded to include topics such as
This site (layout and contents) is ©2008-2018 by Charles A. Plesums. The material is free for personal use. Questions? contact us.