Following on the recent post about business models, we want to cover an equally important topic: business structures. While business models define how your business will provide goods or services and get revenue, business structures refer to the legal structure chosen for your business. This post covers structures most common to home business, though other business structures exist.
Many businesses – home based or stand alone – require a Federal Employee Identification Number (FEIN). Typically a business with employees or with a structure other than a sole-proprietorship must have a FEIN. The IRS provides a helpful link – www.irs.gov/businesses/small – to assist you in determining if a FEIN is necessary for your business.
A couple months ago I wrote an article about starting a part-time photography business from home. I started this venture because a problem presented itself: Blank walls in my doctor’s office and I had a solution – pictures taken at interesting locations including Niagara Falls, Vienna, Zurich, etc. After discussing with the physician, I contacted my accountant and asked about the business structure and what I should record for tax purposes.
Simple process: Ask a qualified expert about options, document any expenses, and market the product to your chosen niche. With a little planning, fair pricing, and a desirable product, I can make a little bit of extra money on the side. My plan is to sell primarily from a web site with a few craft or art shows added for additional exposure. Use your talents and contacts, look for opportunity, and follow through!