Business Planning

[xyxoxy]

I'm still at least a few months away from beginning to sell my soaps. In fact I wasn't sure until recently if I even would... but many people have expressed interest and I think I want to give it a shot... at least on a small scale to start.

I've been doing a bit of research but still need to better define my plan and I have some questions.

I know I need insurance.
I believe I need to register with my state income tax board (Maryland)

I have many product ideas and proven recipes and at least two if not more potential markets. One is a country store that my family owns. I will probably also look into Etsy, Artfire, or some other online venue(s). And there are several local markets I could probably set up in.

I'm wondering if anyone uses two or more different business names geared toward the different clientele they are taregting. For instance many of my ideas would work well in the country store setting but many would not work at all. So is it possible, advisable, or NOT advisable to market those under one name and then have a totally different company name and logo for other lines? Does that sound weird? Would something like that mean double the fees and insurance etc or could everything still be nested under one business?

Finally (for now) I live in Maryland but the country store is over the line in PA. Are there any tax or other implications I should be aware of. And if anyone has any specific experience doing business in Maryland and/or PA any advice would also be appreciated.

Thanks in advance.

 

[kwahlne]

Hi Mickey,

Whichever state you have a location in, you will need to collect sales tax. However, if you are selling wholesale to someone who will turn around and sell it retail to their customer, just collect their resale certificate/number and you won't charge them tax.

I wouldn't do 2 different business identities. What a lot of extra work that would be! Why not have different lines of product? You could do a country line, a fancy line, a line geared towards teenagers, or whatever. Labeling could be completely different for each line. Maybe let your client be your guide regarding their styles even.

I just got back from a meeting with my first wholesale customer. I presented them with the test batches I had made for them to their specifications (my own soap recipe but made with their wine). They chose not to use my cutesy names I came up for them and rather named the soaps themselves after their wine styles. It was an exhilirating experience working with them and they may be even more excited than me!

Anyway, that's my 2 cents! Best of luck in all your planning!

 

[Guest]

I also would not create two business entities, just create different products under the same name.

I'm in a totally different business but in 10 years of business I understand why Philadelphia business license applications and my corporate filings are very broad in scope. If you start a business enterprise consult an attorney or business advisor to help you write a broad statement listing all you are doing right now and ALL you plan to do in the future even if realistically you never reach that point, it simplifies things greatly. (I know I'm rambling but example below)

My non profit serves families who use daycare, daycare providers and the providers families, supports affordable childcare...

therefore in 10 years-
I operate daycares
host a website about daycare
rehab and purchase properties where daycares are operated either by my org or others (so that opens up us to property management and developement...I could even go further into residential property developement to stabilize communities for young families)
I produce programs that further the causes of childcare

so go BROAD in your business definitions, like saying personal care products instead of soap production

 

[xyxoxy]

Thanks... that helps a lot.
So if I understand I could do something along the lines of "Country Suds" by Mickey's soap Co. with several rustic sounding names and recipes. Then maybe a "Supernatural Soaps" by Mickey's soap Co. with more ethereal names Etc and so on.

I guess the dilemma is that I have not settled on a business name/identity yet. And I was imagining the name I choose somehow clashing with a target product line. For instance something Shakespearean sounding might seem out of place in a country store. But I have several ideas and I believe at least a few of them are broad enough (Not really considering "Mickey's soap Co.").

As for the scope of my company... I'm not sure what else I would include aside from various cosmetic products. I do plan to donate a portion of my profits to a local animal shelter but I don't think that would make me a non-profit or change my business plan.

This would be my first independant business venture... though as I mentioned my others in my family have some experience. For someone just starting out and not planning to even cover the cost of insurance... how important is it to set up the business properly as far as creating an LLC, creating a tax identity etc?

Thanks again for the great input.

 

[Tabitha]

Would something like that mean double the fees and insurance etc or could everything still be nested under one business?

I have an LLC under one generic name & everything I do just falls under that. I have multiple lines, like you said, marketed at different customer bases. Each has it's unique logo & label. The fine print on the back of each & every label no matter which line it is, lists my LLC as the contact address. I also have a brick & mortar craft mall/shop/gallery, paint children's murals. etc & it all falls under the 'umbrella" company. 1 set of paper work, 1 insurance provider, etc.

The downside to having more than 1 line is which do you spemd you time & money on when you market? If they are both/all available on the same website, that less effort. If you have seperate websites, seperate etsy shops, etc, you find you favor one or the other, spend more time marketing it & it will be more successful.

One one hand. You need to pour all of yout time, efforts, strength & money in to one line to make it work on the other, the greater uyur varietey, the greater your customer base.

So do you refine 1 line & make it strong or have several and split your resources?

That's a **** good question.

 

[xyxoxy]

That is a **** good question.
One I had not considered.

I suppose I would have to devote a lot of attention initially to the country store line because they have been asking when I can have some things ready for them. I tried to explain I can get them soap any time... but there are small matters to deal with like not being sued by a customer or jailed by the IRS.

However they are a "sure thing" and the rest would simply be my best guess as to what would sell. I've been busy doing test batches and trying new methods and recipes so I have lots that I CAN do. But I still have a lot of details to work out before I can go live and start selling.

 

[xyxoxy]

Hi Mickey,

Whichever state you have a location in, you will need to collect sales tax. However, if you are selling wholesale to someone who will turn around and sell it retail to their customer, just collect their resale certificate/number and you won't charge them tax.

This just made me think of another question.
The store I'm planning to sell wholesale to currently carries NO bath or personal care products. It's mostly knick knacks and furniture. Do THEY need anything special to start reselling my soaps? It would probably just be a small crate on their counter. Does the resale certificate you mentioned have to be specific to B&B products?

I've been doing A LOT of reading and still have many questions but right now I'm focusing on writing a business plan. But generally speaking... what are the absolutely CRITICAL steps I must take before I begin selling and what could I possibly let slide for a while if necessary? I'm cool with obtaining product liability insurance and registering a business identity in my state. And I am pretty sure I can find out about getting a tax ID. But do I need to setup an LLC, report quarterly taxes, get an accountant, trademark my company name?

The thing is I'm not quitting my regular job or going out to craft fairs every weekend any time soon. It could be months before I would try selling online. For now I just want to keep making soap and cover some of the costs while slowly testing the waters to see if I might want to go larger. I wouldn't really anticipate a meaningful profit until I kicked things into a higher gear than I am planning for the near future.

Again... any advice is appreciated.

 

[Tabitha]

The shop does not need anything special.

You may resell anything w/ your certif.... errr, most anything....maybe not live stock.

If I were you I would add the words "and gifts" when you fill out type of business. That way if you are ever auditted you are covered no matter what you have bought or sold.

I think mine says art, craft, gift, supplies as type of business.

 

[Tricky]

I have a question regarding an LLC...
as far as an filing for an LLC goes, would making and selling soap be classified as "Manufacturing" or "Retail"?

Also, after getting an LLC, do you still need to obtain an business license to sell your product, or is that covered under your LLC?
(Or does it vary state to state?)

Thnx!