If you do it to the point that it's any legitimate portion of your income, you'd darn well better do it legally...the IRS isn't known for hiring Telletubbies and Care Bears. They're especially nasty if you're audited and they find that you "fudged" things.
go about going into business, i mean getting it all legal with uncle sam? I'm trying to start up a similar business to yours in louisiana. i just dont have a clue how to start an actual business...
Well, the best thing I can say is that the rules differ by state, so check your state's SCC (State Corporation Commission)(or whatever they call it in LA) website. This would
appear to be the website in question:
www.louisiana.gov/wps/wcm/connect/Louisiana.gov/Business+in+Louisiana/Starting+a+Business/Anyhow, outside of that...
STEP 1. Build capital. You need to have a few thousand bucks saved up first. You'd be surprised how costs add up. There's the cost of registering your business, the cost of stuff to have on-hand, and--most importantly--the cost of advertising. If you actually want to have a prayer of making money at this, much less having it be enough to qualify as a source of income, you need to build a decent customer base (more on that later). Business cards and a website--most importantly a website--are a start. Newspaper ads, signs on bulletin boards in grocery stores and other public places, etc., are all good things.
STEP 2. Figure out a name and register your business. Honestly, go with an LLC. An LLC (Limited Liability Company) is a fabulous setup. With an LLC:
* People can sue the LLC itself, but cannot sue you or any other owner(s)/employee(s)
* You don't have to put sales profits into business accounts. You can pocket all the profits--making the LLC's net worth $0...which is great if someone tries to sue
* Your company has almost zero legal liability--so you don't have to cover your ass all the time (more on that later)
* You can invent whatever title you want for yourself (owner, president, general manager, supreme potentate, emperor, etc.)
* In most states, there are no taxes on LLCs. And if there is a tax in your state, it is far less than the taxes levied on corporations
Check with your state's SCC about how to register your LLC. It is completely illegal to operate an unregistered business, and when you fill out your income taxes, the IRS will see you have income from a "questionable" source, and your life will end. This of course only matters if you make money. Also, if you're unregistered, 100% legal liability in any lawsuit or electrical fire or accident rests on you--and you will be sued into the poor house. In Virginia, it cost me $100 to register it--I just sent in a check with the completed application (which I got off the SCC website).
STEP 3. Get your shiite together. You need to do some comprehensive thinking about where your work space will be, who your parts suppliers will be, etc. I've said this to other people many times before:
**Your average customers are morons.**
It doesn't matter how smart you are, how much experience you have, how much you know about fans compared to the pimple-faced dweeb down at Home Depot...first impressions matter--if a customer looks at you and doesn't get an instant and overwhelming sense that you're experienced, professional, and reliable, then they will go elsewhere and you've lost them permanently. In other words, you need to come off as a well-established, multi-employee company--not some guy running a fly-by-night hobby thing out of his basement. One thing that helps is to have a dedicated phone line. In my case, I just use my cell phone--if the number calling isn't one I recognize, I answer as "Seville Fans" (not "Hello"). Also, I've changed the answering machine message on my phone to be the "company message"--it makes no mention of Pierce Phillips. Also, your website needs to be professional-looking. Registering a domain name and getting hosting costs $$$, but it's important that you have a real-looking website...not some free piece of crap like "
pages.yahoo.com/geocities/free_web_pages/myceilinfanpage.html", laden with banner ads and popups. Anyhow, like I said, people are morons--this culture is based on fear (just turn on the 6 o'clock news)...when someone finds your company, they want to be immediately reassured that it's 100% cool, detached, professional, experienced, etc...not some kid running a half-assed thing out of a van (not that that's you, but IMPRESSIONS matter is my point, and people are very quick to assume and judge).
STEP 4. Get some connections. It helps to have people you can turn to for advice or questions--and lucky for you (and me), this online community exists. However, it's also good to know folks in the business--so that you can get hard-to-find or discontinued parts. If Lowes or Home Depot is out of stock of something, you're screwed unless you have another source to turn to. For me, I have friends in fan/lighting stores all throughout the area.
STEP 5. Get organized. As you've seen in one of my other threads, I designed invoice software. You may just want to buy a program (this one is excellent AND free:
pages.prodigy.net/daleharris/pos.htm). For me, I did the following:
* Bought a dedicated computer (just an old clunker, cost me $20)
* Bought 2-part (carbonless copy [white/yellow]) paper for my dot-matrix printer--if you enclose the yellow part with shipments, it makes you look like you've been in business since the 80's...a VERY good thing
* Wrote software to manage customers, invoices, sales, inventory, etc.
* Opened an account with UPS
* Made warranty cards and had them printed on heavyweight paper (as with EVERYTHING in business, make sure your spelling and grammar and design/formatting are 100% professional)
You need to figure out how you want to manage your business--what forms of payment you'll accept (you may want to consider buying a credit card reader and getting an account with one of the companies that those things dial into, because most people want to pay by plastic), and stuff like that. It helps to "know before you go", so that you're not trying to figure this stuff out while a customer is waiting. Figure out your prices for things (not just fans, but parts too), etc.
STEP 6. Decide what products and services you'll be offering. I do mail-in fan repair and mail-order restored antique/vintage fans. For now, I've elected to not rent store space downtown and run an actual store. This way, I can do everything out of my living room, which is very convenient for me. However, I'm running into limitations when it comes to work space. It's important to have all the tools you'll need on hand--desk-mounted clamps are priceless in many applications, for example. I also have a sandblasting cabinet and compressors...which is priceless when it comes to refinishing fans, but pisses off the neighbors. So, it doesn't hurt to have workshop space. But again, all this stuff depends on what services you offer, so figure that out ahead of time. I offer stripping/repainting, because I consider that to be an essential part of a competent, professional-looking restoration. I tell customers to pick out any paint chip they like, and read me the code off the back. I then go get the paint at Home Depot and [after sandblasting the fan] spray it on. Whatever you do, do it professionally (don't use spray paint and scotch tape).
STEP 7. Advertise. You will not have customers without advertising. Beg the local newspaper(s) to do a story about your business. Get business cards. Get a website. Post signs ([your company name] IS NOW IN [your town]!!!) everywhere you can. List with Google Local. Hell, list with every inexpensive advertiser you can. Post links to your website everywhere you can (however, don't post them on sites that you don't want your customers to associate you with, such as gaming sites). Be careful what you post where (this is why I canceled my MySpace account)--Google is both a blessing and a curse...you don't want someone to type your name or business name into a search engine and see you associated with something unprofessional or in any other way embarrassing. Also, BE CAREFUL what pictures you post. When you post a picture of a fan, make sure the fan looks brand uffing new--no smudges, no oil stains, no rough spots on the blades, etc. Never post a picture larger than 640x480..."detail will damn you". Make sure the fan is completely assembled, and the background is blank (no posters on the walls, etc). Make it look like a photo on Hunter's website. When people look at your fans, they're going to be cautious, because you're selling USED fans (
make SURE they know that). Your fans can either look like mint-condition classic/vintage beauties, or they can look like used, stained crap. If people see rust, tarnish, stains, dripping oil, warped blades, yellowed/faded parts, missing screws, etc., they will think your stuff is old trash that belongs in a thrift store. There is a big stigma about "used" items. And the way you present your items is the difference between...
This car from 1984:
And this car from 1984:
But seriously...one blade that looks out-of-alignment, or one drip of oil down the side of an Original's switch housing, and people will turn tail and vanish. Don't forget, when taking photos, the finishing touches--tassels, nice glass, light bulbs (turn them ON; it's nice if you have a dimmer hooked up), etc.
STEP 8. Consider branching out. Don't limit yourself too much--the more stuff you offer, the more customers you'll have. Mail-in repair, local repairs, sandblasting/repainting, stripping/refinishing, etc...all good things to offer. And don't forget that people are morons--many folks throw away great old fans, saying "well, we wanted one with a light", even though the damn thing was perfectly light kit adaptable. Speak slowly, use small words, don't get frustrated, and--as I've said before--think of your audience as 5th graders. Just because something is common sense to you doesn't mean it is to them too. Anyhow, yeah, one thing I'm doing right now is hammering out a contract with Emerson to make K55 fans for me--I'm actually trying to get them to re-make several of their old models (blenderfans, 1895 Series, Casablanca Classic ornate, etc.). Offering your own brand of products is one great way to attract customers...but it's BY NO MEANS necessary.
STEP 9. Be competitive. You're not Texas Ceiling Fans. You can't afford to have an exclusive, specialized market (at least, not yet). So, you can't charge $300 for an Original no matter
how nice it is. You are competing with Home Depot and Lowes. Your average customer, who doesn't care much about fan styles, will say "I can spend $65 at Home Depot for a brand new, clean, modern-looking fan under lifetime warranty...or I can spend $250 at this kid's little fly-by-night operation for a 20-year-old used ancient-looking thing". A fan collector would choose the Original. 98% of the buying market will choose the Hampton Bay. So not only do your prices need to be on-par with HD and Lowe's, but you also need to convince people that your products are far better. It doesn't hurt to hype up K55 motors (talk
briefly about how they're far more reliable and quieter than spinner motors), or talk about cast iron, or mention "made in America", etc. etc. etc. Be reassuring. Take a look at my website:
shop.sevillefans.com/...if you're a strong voice, people will follow you. If you're a passive voice, they'll walk over you on their way to Home Depot. End of story. Anyhow, you need to convince people--without boring them, or taking a long time, or using technical words--that your used fans are FAR better than Home Depot's new fans. And, as I said, your prices need to be on par. Just because you think a Delta II is worth $150 doesn't mean people will pay you that. 75% of people will say "really, it doesn't look any different to me than the $50 fans down at Home Depot". So, make your Delta II $65. Reality is not always the same as "what things
should be". Sure, SOMEONE will pay you $150 for a Delta II...but if you're trying to put food on the table and keep your cars on the road, it's better to have more customers now than to wait 6 months for your first or second customer to come along. And again, as a USED PRODUCTS company, the prevailing theory is that your products should cost less than NEW products. Even if they're better quality. Again, most of your customers will be morons.
One side note...
Unless you have an electrician's license, AND you are insured,
DO NOT DO NOT DO NOT put your hands on a fan in anyone else's home or business. Not only is it illegal in most states, but AS SOON AS YOUR BUSINESS IS REGISTERED, your legal liability changes. If you touch a fan outside of your property (your workshop), then not only can your company be sued but YOU PERSONALLY can be sued too...the LLC protection laws are voided the second you touch a fan. Seriously, do NOT replace switches, or even clean blades. If ANYTHING goes wrong, you are 100% legally liable for every single damage (unless you have a lawyer write a waiver and have the customer read and sign it). So if you wipe the dust off the blades of someone's fan, and by act of God the fan catches on fire that night, you are legally liable, end of story. It is completely imperative that you do NOT touch any fan outside of your work space. Also, there are some nutsty people out there who will break their own fan just to get the insurance money...and if you touched it, you're still liable (unless you have a hidden camera proving that they did it). Them's the rules...if you don't like court, jail, and being broke, then don't break them.
That's all I can think of for now.
), then I need to make sure that I'm serious about it, and honest with the people who are trusting me--I need to know what I'm talking about, and I need to do a competent and safe and complete job, with no corner-cutting or half-assing. There's a right and honorable way to treat people who trust you, and there are thousands of wrong ways, and I care about that.
