What is the story here:

[Patrick62]

This is in regard to earlier post concerning providing bundled wood to store.

Boss man told me that I would have to be a "business" because I already work there. Evidently someone else could be simply handed a 1099 to satisfy the tax man. I dunno much about this.... :newbie:

I have looked into this a bit, just enough to scare myself a bit. I could become a "sole proprietorship". Maybe "Doing Business As". Or a LLC, that would be a "very Limited Liability..."

Or I could just simply leave it like it is, and forget about it. So far, there is very little in the way of a paper trail selling a few cords.

The fact is that if I were to do it all by the book, and pay all the taxes then a cord of wood would be "veddy, veddy expensive indeed!" Nobody would pay for it.

What to do?

-Pat

 

[sperho]

Look into it. Note that with a tax number, purchases for business use (chainsaw stuff including gas, bundling equipment/supplies, delivery costs, etc.) should be tax deductible. But I ain't no tax guy.

 

[Ductape]

If it were me, i'd just drop the idea of selling the small bundles to the store. Too big of a can of worms to open just for that. If you are selling a few cord each year for extra bucks, keep it that way. You know what they say, K.I.S.S. !

 

[Billy_Bob]

So far as I know, you can be a business with just your name. If you use a business name which is something other than your name (doing business as - DBA), you need to to file the name with your state. In my state, the "Secretary of State" office handles this.

Search google.com for [your_state] Secretary of State, to find their web site and information on this.

Corporation, inc., LLC, LP, etc. is for limiting legal liability. This is if someone was to sue you in court. They could go after just the business in theory. But there are exceptions.

The key here is what the accountant for the business you work for says about all this. What does she/he need from you for you to be considered a business? Perhaps a tax ID is all they need. The following page says you can use your SSN for this...
http://www.irs.gov/businesses/small/article/0,,id=115045,00.html

If they insist you get a business name, and want to give you checks payable to the business name, then you would need a bank account in that name and a DBA. (Ask bank what they would require to open a business account.)

Also may need local/state business and/or sales tax licenses, then if selling whoesale, might need their sales tax number for your records.

Seems to me it might be easier to start by selling wood to a business other than where you work. Some businesses take their time paying their bills. They get interest on the money if they wait until the last minute to pay. Or they may insist on a long time to pay for what they order with no interest charges. The business you work for may do this and may not want you to get ticked off at them when they do this to you too!

If I were you I would start by selling to another business. Do the minimum required to become a "business". If this thing takes off, THEN get a DBA, business cards, etc., and then sell to the business you work for.

Might just want to go to another retail store and talk with their accountant or purchasing person. Say you are thinking of starting a business. Ask what they would need in order for them to buy products from you. (Tax ID? Business license #? Nothing but your name?)

This is all an accountant thing...

 

[mga]

Look into it. Note that with a tax number, purchases for business use (chainsaw stuff including gas, bundling equipment/supplies, delivery costs, etc.) should be tax deductible. But I ain't no tax guy.

he can write off his truck, computer, any and all equipment used to process firewood, clothing, shoes, etc etc...the list is endless. however, you have to file, i believe, quarterly and there is a certain amount of time they give you to show a profit in your business.

firewood could be a lucrative business adventure becasue there is no tracking record of how or where you got the wood...only what you claim. and, since much of it is always paid in cash...need i say more? however, selling to a business, like a store, you will have to record because they are doing the same.

like any business, it's a pain in the ass, but, nothing ventured...nothing gained.

 

[Poindexter]

You would need a dba or "something" to sell to a business that already has you on the books as a W-2 employee.

You would not need a dba or an LLC or "anything" else to sell to some other company that does NOT have you on the books as a W-2 employee.

Just the way it is.

As far as selling to grocery stores, I am going for that market segment this year, but not through the grocery store.

Once the firewood starts showing up at the grocery store (at $8 per cubic foot), and cord wood is in the classified section at probably $100 dropped/ $150 stacked - then i will strike.

I am going to run an ad with my girlfriends cell #, advertising well seasoned red oak, heart wood only, split small. Somehow I am going to work 'old world charm meets sophisticated modern living" into the add.

Anyway, it is really nice wood, and I am going to offer it at $6 per cubic foot. So it is nicer wood than the grocery store, cheaper than the grocery store, and I am going to deliver it to your house. And I will sell in increments starting at 8, maybe 16cf. Only $768 per cord...don't care if I sell any of it, the price is not negotiable.

 

[mga]

Only $768 per cord...don't care if I sell any of it, the price is not negotiable.

:jawdrop:

i can see firewood doubling in price in the near future.........

 

[Steve128]

Never say I wish I would have....

If one day you intend to work for yourself, this could be a good learning experience. You already have equipment, so start up money low if at all, and you will learn about running a business without incuring many of the dangers.

Others have already mentioned advantages of doing it.

I kinda think mga summed it up well.:greenchainsaw: I am sure he meant doing everything on the up and up and taking advantage of every legal choice!

 

[Patrick62]

Thanks a bunch (bundle?)

I will keep this in mind, and have a few further discussions.

Certain amount of time before it makes money? I can answer that right now! There isn't any money doing wood! I have spent a pile making piles, and so far it is a interesting hobby. I watch the "big outfit" that I work with cut many, many cords of wood, and sometimes they have something to show for it. Last year a truck blew it's engine, it still sits waiting for a engine.

I could have a lot of fun learnin' the ropes.... so to speak.

It may happen, :biggrinbounce2:

-Pat