Business Start-Up Toolkit
You have been making handcrafted soap and/or cosmetics and now you are ready to start selling your products to the public, but you aren’t sure where to start…
Well, we have made it easy for you with our step-by-step "Small Business Start-up Toolkit"!
You put so much care and detail into your handcrafted soap and cosmetics, starting a business requires the same amount of energy to do it right. Taking the necessary steps will take some time but we have done a lot of the legwork for you and have answered many of the questions that we get from people going into business for the first time.
Follow these steps, tips and links and you will have your handcrafted soap and cosmetic business set up in no time.
Select Your Business Type
There are several business types under which a business may be established. The business type determines which income tax return form you have to file, personal liability, applicable state filing regulations and other factors. Each different type of business has advantages and disadvantages. Choosing and setting up the right type of business for your operation can make life much easier down the road. The most common forms of business are:
- Sole Proprietorship
- Limited Liability Company (LLC)
- S Corporation
See Business Types for a detailed discussion of each type of business and what it might mean for you.
Choosing a business name
Choosing a business name is one of the most important steps in starting a new business. The right name should help forward your brand identity and set your business apart from your competitors. Conversely, the wrong name could inadvertently pigeonhole your business into the wrong niche market or make your business indistinguishable from the crowd. See Choosing a Business Name for issues to consider when selecting your business name.
Getting an Employer Identification Number (EIN)
An employer identification number (EIN) is a number assigned by the IRS to any employer or potential employer. People have social security numbers; businesses have EIN's. If you choose a partnership, S-corporation or limited liability company, the first thing you'll need to do is get an EIN. If you have a sole proprietorship you MAY get an EIN - unless you have employees, in which case an EIN is required. See Getting an EIN for additional information and links to online forms.
Using an Assumed Business Name
Also called a trade name, ficticious name, or "doing business as" (DBA), an assumed name is a name you are using other than the legal name of the business. If you are a sole proprietorship, your legal name is your own name. If your business is a partnership, LLC or S-Corporation, the legal name under which the business was registered. To use any other name is operating under an assumed name and requires filing appropriate registrations with the state you are operating in. See Using an Assumed Name for details.
If you plan to manufacture and sell handcrafted soap & cosmetics to the public, you need to have an appropriate general & product liability policy in place to protect you, your business and your personal assets. See About Insurance for an explanation of insurance coverages and options.
Finance, Accounting & Inventory
One of the most important steps to take as a start-up business is setting up a proper business checking account and having the appropriate accounting and inventory tracking software in place. Setting these up from day one and using them will save you a lot of heartache and backtracking down the road. See Finance, Accounting & Inventory for a discussion of common options.