Business license or not?

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HazeBlazer

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For those of you who run offline businesses dealing with clients whether it's SMS or SEO or just google places or whatever, do you own a business license?

This is the only thing keeping me from picking up that phone and making 40 calls (EDIT: I mean 40 calls per day). I'm not sure if I should wait till I get a sole proprietorship since I'm going to be dealing with many clients. Should I just screw that license, start making those calls and worry about that later down the run?

Also how do you folks get your contracts written? Contacting an attorney is kind of expensive right now.

Any thoughts appreciated.
 
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I don't know how it is where you live, but here in dallas it only takes 10 minutes and $16 to get a sole proprietorship. I do that with all of my offline businesses.
 
HazeBlazer said:
For those of you who run offline businesses dealing with clients whether it's SMS or SEO or just google places or whatever, do you own a business license?

This is the only thing keeping me from picking up that phone and making 40 calls. I'm not sure if I should wait till I get a sole proprietorship since I'm going to be dealing with many clients. Should I just screw that license, start making those calls and worry about that later down the run?

Also how do you folks get your contracts written? Contacting an attorney is kind of expensive right now.

Any thoughts appreciated.
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If you're serious about your business get a license. It doesn't cost a lot.

As for contracts there is a lot posted here already just edit them up and you'll be good to go.

Also, 40 calls is not enough to get clients try 150+ calls.
 
I have a llc for whats it worth. Just get a sole prop. from your county, a mailbox with private address. You can apply for a bussinesss license in most cases for a home based business. It never hurts to have a business license, just in case and when the client ask's why should I go with you. I usually go with the taktical method which is a all star thread. My llc cost 350- and when I send the link to my LLC the clients usually gives up. GOOD LUCK
 
It doesn't take long to get a tax ID and business license. I guess it depends on the city.

Here's the process in my city/county in the US.


  1. Go to: https://sa.www4.irs.gov/modiein/individual/index.jsp and register for an EIN (for the name you want to use)
  2. Register the fictitious business name (if you want to operate as anything other than your name).
    1. Pay the registration fee. Here, it is $60.
    2. Run the FBN statement in the local paper as required by your state laws. Here it is 1 post per week for 2 weeks and costs $40. This step is to only to make public record of your DBA. You don't have to complete this step to get a business license.
  3. Go to your city hall and get a Home Occupation Application.
    1. The HOA is completed by you and your landlord (if you have a landlord). It's basically identifying what business you intend to perform and that the owner knows it will be partially used for this purpose.
    2. Take the completed application to the city hall and pay the inspection fee ($90 here) and schedule a home inspection. The home inspector makes sure that you're A) using your residence for the type of business you specified and B) to ensure your home office is code compliant. Really, they only care that your home office doesn't generate traffic that it's not zoned for and that you don't have daisy chained power strips. I was able to schedule my inspection for the next day and it only took about 15 minutes.
    3. Once he inspects he can usually file the report same day, if not next business day.
  4. Estimate your earnings for the year (DO NOT BE AFRAID TO LOWBALL). Here any business that projects $24,999 or less pays the minimum fee of $25. It is on the honor system. They ask you every year. They don't judge or distrust you.
    1. Pay the $25 (DO NOT FORGET YOUR EIN YOU GOT FROM STEP 1)
    2. They print out a receipt and that serves as your temp license until your receive the official one in the mail. (Took about 5 days here)

So...to answer your question, you should get one - it's worth it. It also further legitimizes your business. Getting used to cutting corners from the get go (even if no one will check up on you) is a bad way to start a business in my mind. And despite the multi-step process - it's really simple.

On the black hat side of things, however - businesses are audited significantly less than individuals - especially new businesses. Yes - sometimes an auditor will check if a business has a license to operate but it's honestly a rare occurrence.

Also - make sure that your county/state don't have any special provisions which in my experience they usually don't unless you are selling physical goods that need to be taxed.
 
Setup as self employed if your only just starting out, If it goes well, look at incorporating a business. Biggest thing is to keep your overheads small.

Goodluck

James
 
b1step-ahead said:
I have a llc for whats it worth. Just get a sole prop. from your county, a mailbox with private address. You can apply for a bussinesss license in most cases for a home based business. It never hurts to have a business license, just in case and when the client ask's why should I go with you. I usually go with the taktical method which is a all star thread. My llc cost 350- and when I send the link to my LLC the clients usually gives up. GOOD LUCK
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I went the LLC route as well. Establishment only cost about $150 but the state LLC fee in California is $800/yr. Absolutely ridiculous.

Also, for legal just use any template for a service contract. Plenty on the forum. Make sure to include (but maybe not limit to) the services you are offering, the monetary terms of the contract and when the contract is complete (or up for renewal). A contract can be as simple as a word document with their name, the job to be completed, cost, time and your name and signature with a box for them to sign that says, approved.
 
GuinnessMan said:
I went the LLC route as well. Establishment only cost about $150 but the state LLC fee in California is $800/yr. Absolutely ridiculous.

Also, for legal just use any template for a service contract. Plenty on the forum. Make sure to include (but maybe not limit to) the services you are offering, the monetary terms of the contract and when the contract is complete (or up for renewal). A contract can be as simple as a word document with their name, the job to be completed, cost, time and your name and signature with a box for them to sign that says, approved.
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Same boat, I'm going to file out of state because of that high fee.
 
Checkmate said:
Same boat, I'm going to file out of state because of that high fee.
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Be careful filing out of state LLC's. As an LLC you may have to file in every state you do business in. Not sure how strong the auditors are but everything catches up eventually. If you're going to go out of your way to evade requirements, just get a PO Box out of state and file for an S Corporation. You'll pay more to form and run but it certainly won't be anything near $800 a year and at least you'll be legit.
 
GuinnessMan said:
Be careful filing out of state LLC's. As an LLC you may have to file in every state you do business in. Not sure how strong the auditors are but everything catches up eventually. If you're going to go out of your way to evade requirements, just get a PO Box out of state and file for an S Corporation. You'll pay more to form and run but it certainly won't be anything near $800 a year and at least you'll be legit.
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Yea, I'm definitely not trying to evade anything. My case is a bit different because work will be done in that other state where I want to file.
 
You really do need to talk to a local attorney and/or tax pro, but I run my business(s) through LLC with tax id with a checking account and I keep all my business separate. I have affiliate business in LLC(s), off line in separate LLC. I do have a personal adsense and so does my wife, but we are moving those in to llc as well. Maybe I am over doing it, but I feel comfortable this way. Plus, I am not limited to one Adsense acct ;)
 
Yes, or you will end up owing the Gov a shit load of money at tax time.
 
yes, i do it myself. it is not hard and make sure you file it when they send you that mail or its a $50 charge or some shit.
 
I would recommend setting up a business license and merchant account before you start working. You will seem like a legit business to your clients and you will cover yourself legally. For me it cost around $400 total + the merchant account.
 
Funny just got off the phone with my local business license rep when I found this thread. I mentioned that I was ready to do the paper work on the LLC and asked what I needed for my business license. The rep told me since it was from my home and I had no inventory and my address was outside the city limits I could overlook the business license.... I will be following up with second opinions but just thought I would share that.
 
Interesting. Thanks for all the responds guys. I immediately went over and set up an EIN, and I will be going tomorrow in the morning to set up a fictitious business name.

Is it necessary to set up an HOA like GuinessMan above stated? Anyone have any input on this?
 
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In some countries you dont need a business to sell, you just need a business that will send your invoices and pay your taxes.
Its like you are a regular employee in the "invoice company". We have i few of them in Sweden.
 
HazeBlazer said:
Interesting. Thanks for all the responds guys. I immediately went over and set up an EIN, and I will be going tomorrow in the morning to set up a fictitious business name.

Is it necessary to set up an HOA like GuinessMan above stated? Anyone have any input on this?
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Unless you have an actual office that is zoned for a business, the HOA is required by the city to get the business license. The EIN is really only useful if you are going to have employees or will be getting the FTN and getting a bank account in the name of the FTN.
 
bhspiderz said:
Funny just got off the phone with my local business license rep when I found this thread. I mentioned that I was ready to do the paper work on the LLC and asked what I needed for my business license. The rep told me since it was from my home and I had no inventory and my address was outside the city limits I could overlook the business license.... I will be following up with second opinions but just thought I would share that.
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I didn't believe it at first, but a quick Google search confirmed this. The catch though - you need a business license for any city you do business in. So, you may not need one when you're on the outskirts...but they will require one if you ever come into town to do business.

I'm surprised he would say that over the phone. Most city officials have a little more reservation giving away advice like that. In either case, I'd get some official documentation stating the rules.
 
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