When did your hobby become a business?

[Draconias]

I have been making pens for some time. My story is probably the same as yours, I started out giving them to friends, Family and co-workers. Word gets out and people ask if they can buy them. You show them off in a gift shop and they want to sell them for you. Up until now I have been treating it as a hobby and figured it is not much different then people that sell stuff with garage sales. I am wondering about those that now have a business, when did you change from Hobby to Business? Also what did it intail? Did you get a business license, business checking account, did you start saving reciepts, hiring an accountant. I am just wondering what I would be getting myself into if I decided to start supplying pens to a gift shop, lol.

Thanks for any insight you may have,
Ron

 

[jallan]

As for me Ronald, I got a tax number from the state, started a web site got a DBA (Doing Business AS) and set up some pens at the local Jewelry store on commiission. Also sell on E-Bay. I also print my own business cards which I hand out to people. Everyone does it diff. This is how I do it.Hope this helps some.
Jallan
www.cedarcreekcustompens

 

[JimB]

Once you sell your first pen you are in business and should have set everything up. I got a Sales Tax number from the state. I had already saved all my receipts and reported sales and expenses to the IRS the first year I started turning pens.

If you are already selling to a gift shop you really need to be reporting. The gift shop is showing you as a supplier and accounting for their inventory. Even on consignment they need to show where the money is going when they pay you.