When Hobby Turns Into Business

[lmam88]

What is all involved if a person wants to turn a hobby into a money making business out of their home?
Thanks!

[tonigking]

Choose a name for your business, File a dba with the County and obtain a sales tax number from the State.
Good Luck!

[mayflowers]

I hope your hobby is sewing,we need a sewing supply store in Marble Falls.

[KINGCHIP]

I hope your hobby is sewing,we need a sewing supply store in Marble Falls.


Hope it's not meth, we have way too much of that already.

[lmam88]

"I hope your hobby is sewing,we need a sewing supply store in Marble Falls."
Wood working. Hubby has made a rocking Motorcycle for one of the Grand Kids and quite a few are wanting him to start making them to sell. He has made furniture as well that have turned out really nice.

"Hope it's not meth, we have way too much of that already. "
Haw, Haw, Haw Kingchip very funny!

[lmam88]

Ok, one more question. If a business is wanting him to make a couple to display in their store and people start ordering them would that still be classified as a "home business"?

[mdarling]

It could be. If you sell your product directly to the store, it would be their responsibility to collect and pay sales tax. This would be a wholesale transaction, and you would need to have the store's tax ID number to prove that it was a wholesale transaction. If you are displaying, taking orders and receiving payment from an individual, you probably will be responsible for the taxes. Know also, that "where" you deliver your product determines the tax rate. If you live in Marble Falls and sell/deliver at your house, the tax rate is eight and one-quarter percent. If you live in Kingsland (for example), the tax rate is six and one-quarter. I believe Horseshoe Bay is seven and three-quarters. It sounds a little confusing, but it's fairly easy. I have a small craft business, plus I do the taxes for another small business. Let me know if I can clarify any of this, or help you.

[kb5ykj]

Another thing to look at would be to check and see if you can run a business out of your house. Some subdivisions do not allow this and the neighbors can take you to court with a law suite.

[lmam88]

mdarling, thank you so much for all the info!

Chuck, very good point especially since we are newly annexed into the city. I am still trying to find out how or where to get a copy of all the ordinances.

Thanks!

[mdarling]

Check with the code enforcement office. It is directly across the street from City Hall on 3rd Street. They've always been very helpful for me.

[lmam88]

I will check with the building inspector out here...thanks!

[kb5ykj]

I would check with the Title company in town. They supplied the information on my subdivision when I purchased my house. Since I am a Amateur radio operator I wanted to make sure that I could install an antenna tower at my house.
They were very nice and supplied a copy of the rules and regulations to me.

[lmam88]

They did not even cross my mind as a resource, Chuck. Thank you!

[butchkemper]

Remember, there are two sets of rules that govern what you can do at your house:



City Zoning Laws - enforced by the city through the building code office.



Deed Restrictions - enforced through the civil courts by your neighbors and property owners association. The city does not take notice of deed restrictions and will NOT enforce them.


Butch

[mdarling]

Annebel, you are very fortunate. However, this is not always true. Some people have discovered that turning their hobby into a business--with long hours, payrolls to meet, stocking a shop--is not a wise thing to do. It can take all the fun out of the hobby.

[organicfoodlover]

If your business is an artistic endeavor and you won't have retail customers coming to your home, or employees coming to your home, you likely would not be risking much in the way of neighbors or others reporting you. It's not really a "commercial" business unless commercial activity is occuring. But there are always people who will try to stop you for their own reasons I suppose.

Most ordinances are designed to keep excess traffic, noise, chemicals, delivery trucks, etc. away from residential areas - as opposed to stopping someone from creating something inside their home that they sell from another location. Otherwise most artists, photographers, writers, etc. would be in breach of the ordinances.

[matokeya]

Have you ever considered selling your products at craft shows? There is one in Kingsland next weekend and they probably still have spaces available if you are interested in this avenue of selling and you have some sell-able stock on hand you can sell right there and then besides taking orders. Also, Llano has some very good shows, but they are not until September and October. If you are considering consignment, this is an okay route, but I personally do not recommend it. Need to find out what percentage the owner of the store wants when sales are made. Sometimes it's just not worth your time and effort. A good percentage is a 70/30 split. You get the 70, the store owner gets the 30. Sometimes you can even get an 80/20 split, but this is rare. Most will want a 60/40 split. Just some other helpful hints from an experienced crafter.