It's the law!
We have laws governing business (even small business) in our society so that no one can
take advantage of consumers... and so no one can build a meat-packing plant in your nice
residential neighborhood. Even though your modest ceramics studio has no such impact on
the environment, it is subject to the same rules.
Our laws, unfortunately, seem to be applied unevenly sometimes. Free enterprise and
initiative often suffer from the very laws that protect us from the unscrupulous. The home
ceramics studio owner must be especially careful about complying with the laws of the
community and dealing with neighbors.
Local laws
Phone or visit your local city hall or county clerk's office, and tell them you are
thinking of establishing a home ceramics studio. Find out everything you can about the
rules and restrictions before you commit to doing it. If you do not comply (or if the
plans you have are in violation of some code or ordinance), you can change your plans
before you actually call attention to yourself. If you march in and announce you are
already in business, there is a chance someone will find a reason to make you close. Learn
everything you can about zoning laws and other codes before actually applying for a
license.
Most cities require some kind of business license. Zoning approval must be given before
the license is granted, and this can involve the local zoning or planning department. The
usual procedure is to post the property where the proposed business is to be located and
invite reactions from neighbors. A hearing may be held, and neighbors may be invited to
voice their objections. If sufficient objections are raised, the permit will be denied. If
you know your neighbors and have shared your hobby with them as an amateur, they are less
likely to object to your sharing it with others professionally.
The planning commission or county clerk can give you the rules on signs allowed in
residential areas; they vary from "small signs OK" to "no signs at
all." Find out what the restrictions are on the number of students allowed in your
house at one time. Ask whether it is necessary to register your business under a
fictitious name or "dba" (doing business as...).If there is a Small Business Administration Office
near you, talk to them about what you need to do before setting up your studio. It is
better to know all you can before starting than to invest time and money fruitlessly and
in ignorance of the law.
If your business does not comply with the local laws, try to remember that they are there
for your protection, and with some modifications you may still be able to qualify. If you
choose to go into business in violation of local laws, a jealous competitor or disgruntled
neighbor could cause a great deal of trouble by reporting you.
Be aware, too, of the necessity of collecting any local sales taxes. With some variations,
the procedures are much like those discussed in the following section on state laws.
State laws
One thing you must do in most states (those with sales tax) is contact your state's
department of sales revenue and obtain a resale permit and number. (Your bookkeeper,
certified public accountant, attorney, or your city hall can advise you of the appropriate
governmental office.) This resale number will allow you to buy supplies without paying
sales tax on them. The reason for this is that you will be collecting sales tax from your
customers on this merchandise and sending the money in to the proper state tax agency.
Find out how often you are expected to make these sales tax payments to the state. '(our
resale permit should be posted where customers can see it.
Federal laws
The only federal laws which apply to ceramics studio owners involve withholding Social
Security and other taxes from employees' paychecks. We will assume you are not going to be
employing workers in your home studio. Paying employees requires another level of business
record-keeping and life suddenly gets much more complicated.
Be sure to keep track of the expenses you incur in starting up your business. They could
be important deductions at tax time.
For income tax purposes, you will probably be operating a "sole proprietorship"
kind of business. Your business income can be reported on an individual income tax return
Form 1040, Schedule C. Ask your tax adviser about this. You might also look into getting a
copy of the IRS booklet entitled "Business Use of the Home." Federal regulations
do not affect you as immediately as local laws, but there are some tax advantages you
should know about. These change frequently and apply to everyone in a different way. Find
out what you can about them and get professional advice if you can.
Insurance
The best way to make sure you are protected against fire, theft, and liability is to ask
your insurance agent to review your current homeowner's policy. Ask that your coverage be
evaluated in light of the new enterprise you are planning. Explain how the studio will be
operated, show your agent the area you will be using, and get recommendations on safety
precautions you should take.
Be well informed
It may seem as if there is a lot of red tape involved in setting up a home studio. In
reality, it's not as bad as it seems. You will need a business license and a state sales
tax resale permit. Many other things are optional or depend on your local laws. Hiding
your head in the sand will not make them go away, so the best way to attack regulations is
to find out everything you can about them. Talk to the Small Business Administration, the
county clerk, and your state's department of sales revenue... all of these should be
listed in your telephone book.
The fear of government regulations is much like the fear of the dark; sometimes it's what
you can't see that scares you. "Turn on the lights" by learning all you can
about the rules before you start. |
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