I am trying to be a responsible small business owner. I am trying so hard to follow all the rules and guidelines (of which there are MANY). I have a tax ID for my business so that I can report any and all sales taxes to the IRS in April. I carry it with me to all vending opportunities (OK, so my first real vending opportunity is actually later today, but I will be bringing it, and plan to continue this practice in the future, just FYI). This means I’ve had to look up tax information. Did you know there is not only a state sales tax but also county and local taxes as well? I’ll be honest, I didn’t. NC sales tax is 4.75%, but if I sell in Durham County, the sales tax rate is actually 7.5%. When I sell at the Apex Farmers Market this fall, I’ll be in Wake County, where the sales tax is 7.25%. Basically, the final price of my product depends on where I sell it. As I’m not a brick and mortar shop, primarily a mobile and online retailer, it gets pretty complicated fast.
I have also applied for a LLC (Limited Liability Company) via LegalZoom. What is a LLC and why do I think I need one? According to Legal Zoom:
“Forming an LLC gives your business its own legal identity. In the eyes of the law, it’s a separate ‘person’ that can own money and property, have a bank account, make agreements, sue people, and be sued.
Because of this, your business’s creditors can’t go after any money or assets that aren’t owned by the LLC. Your home, bank account, and other personal assets are protected. By contrast, if you operate a sole proprietorship or general partnership, you and the business aren’t legally separate, and everything you own is at risk”.
As I am a home owner, the idea of losing my house or retirement account because someone wants to sue my business is terrifying. So yeah, I want a LLC. But it’s not cheap (nothing ever is). Do you know how many bath bombs I need to sell to cover the costs of a LLC? Let’s just say it’s a lot.
And this brings me to QuickBooks. I’ve always been a TurboTax user, and find its interface pretty user friendly. QuickBooks is serviced by the same company, Intuit. After doing some research, I decided QuickBooks was the right fit for my small business book keeping. So I signed up.
First off, nothing about QuickBooks is particularly quick or easy for me. Unlike TurboTax, it is not designed for bookkeeping newbies, or at least, not ones with absolutely no business savvy like me. I tried to set up rules to organize my business expenses. Then, after reviewing, realized I used the wrong category and had to manually change 90% of the hundreds of entries. And when I was done? When I had painstakingly entered in all my expenses and profits? When I had synced my Etsy page, my PayPal account, my Square reader, and linked my credit card and bank accounts? I got to see in plain, easy to read numbers exactly how in the red I am. As a result, I am now officially calling QuickBooks “SadBooks” (or “MeanBooks”, or “BrutallyHonestBooks”, or “IfYou’reHavingABadDayDon’t LookBooks”).
I haven’t even started on the rabbit hole that is FDA requirements for selling cosmetics (which bath bombs, lotions, and scrubs are legally considered). I’ll save that post for another time.
On the bright side, I have my first real vending opportunity today! If you’re local, please consider swinging by 1415 E. NC HWY 54 Durham, 27713 and saying “hi”! Also, am pretty excited about new product labeling that will be rolling out soon. Stay tuned!