Jewelry Business Questions

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BeadingMitsu wrote
on Mar 19, 2013 9:47 AM

I had intended to start this off as only one question, but after reading some of the other posts on the board, I've got roughly a million more and am completely frazzled. 

Here's the breakdown: I'm running a small shop on Etsy as of right now. I've had a whopping four sales(Woohoo!) since the opening of it. I want to do my best to turn it into a real business, owned by me, that is (hopefully) self sufficient. I've broken the questions down into stuff that's beading related, and stuff that's paperwork related. Any help that ya'll can provide will be much appreciated by a very confused college girl. 

Business Stuffs

1) Inventory? I've been doing 'hobby' beading since I was 16, how the heck do you keep an inventory of everything? 
2) Where is the best spot online  to buy supplies from? I know everyone has preferences, but are there any tips? Buying from JoAnns is killing my checkbook. 

Official Stuffs  

1) Business license? Is that needed at this stage? Is there a cost to it when you're only a one person show? 
2) Taxes? I already have the shop set up to charge taxes that are accurate for every state (at least as of last year) . Do I need to set aside a portion of the amount I get in my bank account from sales for taxes at the end of the year?
3) How in the world does one go about filing taxes for a small business and yourself?

4) Right now I've only  saved the paperwork from each of the sales I've made, the transaction sheet? What else should I be holding on to for tax purposes? 

5) Business ID#, needed/not needed? 

 

Again, many thanks for any and all help ya'll are willing to provide. I want go about this the right way and all the books I've read have just left me rather confused. 

P.S. I would like to point out that none of this is stuff they teach you in high school or college and damn they should.  

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ottercat wrote
on Mar 19, 2013 8:11 PM

BeadingMitsu:
Buying from JoAnns is killing my checkbook. 
From what I understand, you could cut your costs by buying wholesale instead of retail (JoAnn's); but for that, you need a number (tax, business, ?).  Would suggest doing a search (this site)' there are some posts regarding some of your questions (inventory, contacts, etc.).  Check with your local state government (Chamber of Commerce, tax board, .....); Etsy should have some answers (?).  Best to you and your search.  I agree -- there should be somewhere to go for a business setup (and probably is) and hopefully someone will provide that information.  Best thing to learn is how to think and navigate -- the information is out there.

Ottercat Coffee

03-19-13 (1810 PDT)

Be yourself.  Everyone else is already taken.  ~ Oscar Wilde

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shanks wrote
on Mar 19, 2013 8:26 PM

It is nice for you to want all the information put in front of you, but if you are going to run a business the best way is for you to do the digging.  That way you will understand how to think things out and get answers for yourself. Let your fingers do the walking on the internet.

1) Inventory:  You need to set up a spread sheet or purchase some software that will work for beading. There are several programs that are beading specific.

2) Purchasing:  Go on line and search for wholesale sites for what you need to purchase for what you are making. Some sites will require a business lic. number.

3) Contact SCORE

4)Do a search on taxes in your state and city

This should keep you busy for a while  Geeked

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D.M.Z wrote
on Mar 19, 2013 9:05 PM

In addition to shanks' very good advice, I'll add a couple more. 1)  look for a Small Business Development Center, sometimes they are affiliated with colleges, but they offer a TON of free (and some charge small fees for classes) advice and can set you up with a business plan outline or software. You NEED a business plan as that will also help you with what you need to do and save and will help you formulate the questions you need answered. There are some rules both local and federal that they should be able to help you with also. If you get down the road two years and turn into a real business and find you haven't kept track of what you should have, well it won't be pretty. I used to do this for a living and every SBDC and every community is different. SCORE can help you also, but usually they are more for existing businesses, but if you find one ask for help and they should direct you.

2) Contact a CPA in  your town and ask for the information on what you should save, they will usually grant you some time like half an hour at no charge in trade for your potential future business. that is a CPA.......not some bookkeeper or bookkeeping service there is a VAST difference and you have so much more protection and good advice from the CPA that it is worth it. Donna

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yorkeylady wrote
on Mar 27, 2014 5:38 PM

I worked for a lady who did bead shows.  I asked her how she managed her inventory.  She said she didn't.   She only kept track of what she purchased by cost.  And she only estimated what she sold by how much she had left at the end of the year.  I asked other vendors how they did theirs and they answered the same way.   It is very time consuming to track as business gets bigger.

Grow new ideas on our Craftboard at:

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yorkeylady wrote
on Mar 27, 2014 5:39 PM

I worked for a lady who did bead shows.  I asked her how she managed her inventory.  She said she didn't.   She only kept track of what she purchased by cost.  And she only estimated what she sold by how much she had left at the end of the year.  I asked other vendors how they did theirs and they answered the same way.   It is very time consuming to track as business gets bigger.

Grow new ideas on our Craftboard at:

beadoroma.com

My Showcase:

beadedjewelry.biz

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D.M.Z wrote
on Mar 27, 2014 6:28 PM

yorkeylady:

I worked for a lady who did bead shows.  I asked her how she managed her inventory.  She said she didn't.   She only kept track of what she purchased by cost.  And she only estimated what she sold by how much she had left at the end of the year.  I asked other vendors how they did theirs and they answered the same way.   It is very time consuming to track as business gets bigger.

Wow, how vague can you get..........bet she'd be sweating bullets if she ever earned enough and accidently got audited. In a way that is how you keep track of inventory from year to year. Amount you had at Jan. 1, amount purchased during the year and amount you have at Dec 31. If you basically use the same beads all the time it might work. She'd still have to track the cost of her wire, thread, findings, her time, etc. Do you suppose she figured how much electricity and overhead it cost her? That would give her the Cost of Goods Sold, then she'd have to report how much she made on these items. Otherwise her profit would show up too high and she'd be liable for more taxes than she should have been. I wonder how she filed her taxes and payroll for you and any other workers........ Scares the heck out of me. My immediate thought is that she is not reporting herself as a business, so it is only a hobby and she doesn't have to keep as detailed records. I am not a business and I keep every sales slip where I buy materials anyway, just because I want to know what my design hobby is costing me to support. DMZ

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Posts 262
on Mar 29, 2014 9:15 AM

I know that in my state, we have a small business owners association. They have a website to go to where it helps you step by step. Mabey you should check where you are and see if they have one? I think I found it with our chamber of commerce. It was really helpful- it's amazing how many different avenues you have. There are a lot of personal decisions that you can make. 

marutibeads.com - some really cool beads..

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Posts 299
Sharon Mc wrote
on Mar 30, 2014 4:55 PM

I just recently got my business license and my tax ID so that I could be all legitimate and buy wholesale. I did all the research myself and learned a lot! For instance, New Mexico does not have a sales tax we have a gross receipts tax, which is handled in a completely different manner by sellers and re-sellers than sales tax.

I found out buying wholesale was not worth it because everyone wants me to buy $1,000 worth of stuff at a time (I'm exaggerating just a little here) but there isn't just one place that has everything I need otherwise I would be happy to spend $1,000 in one place.

I keep all my receipts and use beading inventory software, even when it was just a hobby and a few people "paid" me to make things for them because, like Donna, I want to know where my money is. I purchase from internet stores that sell what I need at the least expense possible, I have a few favorites. There are no stores in my area that sell what I need.

My sister is an incredibly talented artist in Nevada and she told me that the state sends her tax paperwork when it is time to file for her art related business, so I completely ignored my first state tax filing because my paperwork did not arrive. Turns out New Mexico does not send it out, I'm supposed to be responsible and file on my own. I was fined 5 whole dollars--not much, but I was pissed at myself for being an idiot.

I think in the long run you will find out that it is not as complicated as you think, including the tax. The fact that you have sold 4 items on Etsy is something to celebrate, there are shops that can't get a single sale. Good luck to you!

Sharon Mc

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shanks wrote
on Mar 30, 2014 8:21 PM

Hi Sharon,

For your information, there are many wholesalers that do not require that sort of minimum.  I can see where you would have a problem if you only wanted 4 or 5 af any one thing, but all in all you can save money purchasing wholesale. Check around a little more.

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Posts 29
SegBead wrote
on Mar 31, 2014 12:08 AM

The first thing you need to do is to find another place to buy. Somewhere with a much better inventory, selection, and especially price. This can be difficult as it's nice to have the items in front of you with jewelry components, but this alone can greatly increase your profits even if you're not buying at wholesale levels. 

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