This is the last week of my series on Starting a Business 101. Last week, I talked about keeping records. We’ll close the series with some odds and ends that are just good to know.
In this series, I cover the topics below that are central to starting a new business.
Introduction - Why make it complicated?
Week 1 – Choose a name for your business.
Week 2 – Determine the legal structure.
Week 3 – DBAs and business licenses.
Week 4 – Get a federal tax id number.
Week 5 – Determine your federal, state and local taxes.
Week 6 – Record Keeping.
Week 7 – Other good information.
I’ll just do a Q&A format for easy reading since these are somewhat random things.
What is an NAICS number?
Some forms, such as the TX Worker’s Comp Insurance form will ask for an NAICS number. The census.gov site has a list – it is just a number associated with the type of business you have so that it can be categorized. For instance, the number 54140 is for interior design consulting services.
Do you need Worker’s Comp insurance?
Most states require Workers’ Compensation Insurance for certain business types. However, in some states, even if you do not need it, you must fill out forms anyway. In Texas, for instance, if your business does not fall into the category that requires the insurance, you must still file a form saying that you do not provide WCI. So, be aware that you may need to file forms anyway, even if you do not need the insurance in your state. In Texas that form is a DWC005 form.
What expenses are involved in starting a business?
You have the initial expense of starting your business entity (see that week) – that could be just a fee for a dba name or may be full on LLC fees. All of these fees vary by state. In addition to that, you will probably have the following expenses: Quickbooks, payroll costs if you pay anyone, CPA costs, taxes (see that week), office supplies, domain name cost, business cards, and costs for blog hosting should you host your own blog outside of Blogger or WordPress. Depending on your business setup, you could also have expenses like – computer, printer, software, gasoline for client visits, and even the cost of renting a retail or office space. If you do open a space, you may also hire employees.
Do I need to pay for disability insurance?
The following states/territories also require a business to pay for temporary disability insurance:
· New Jersey
· New York
· Rhode Island
· Puerto Rico
I heard as a decorator that you can get discounts. How does that work?
Many stores offer a 10-20% off discount for decorators, but be prepared to show a business card, sales tax permit, your EIN number and possibly other stuff showing that you do indeed have a decorating business. Not all businesses offer this. Just ask over the phone or when you go in. Most decorators do not pass that discount on to their client, but some do.
Certain companies such as fabric companies only sell to decorators. And, to get an account with them, you will need to provide financial information, show other accounts that you have open and that history as well as things like your ein number and sales tax number. It’s not a super quick process. It can be easiest to first start accounts with blinds and tile companies as sometimes they are less strict. And, then use them as your other accounts when it comes to the fabric vendors. If you don’t want to bother, you can always try using another decorator’s account, but it’s likely they will require upfront payment if they are comfortable doing it at all.
As a disclaimer, I am not a CPA, lawyer or business expert. I am simply sharing what I’ve learned in case you have no idea where to start.
I hope this series has helped! Feel free to email me for any other information. I’d love to hear about your personal experiences as well.