Officially Starting a Business - Where To Get Started

[kslight]

Okay not in terms of brick and mortar opening a studio, or even bringing anyone in to my space in my home that I call a studio.

More in terms of "becoming" a business for the purpose of identifying oneself as a legal "not under the table" home business.

Where does one start on this end, from doing the necessary registration with the government as a business to paying taxes? Being able to call myself self-employed? Being able to claim a decent amount of space in my house as part of it (which is not an exaggeration, my basement has completely been taken over by my equipment that I use for recording as well as instruments I use for composing)? Being able to claim the miles I drive and my car if I take my recording rig to a client?

Its not like money is piling up on my doorstep to do work but I have grown to a point lately where I am getting some money to do work occasionally and would like to be able to pursue enough of it to actually be a worthwhile income, and be legal about it.

Thanks

[Gregg Juke]

It depends on where you live (state regs often differ from federal; you'd think they'd get it together)...

* Get a good accountant (one that understands state and federal income tax law, and understands the needs of independent/self-employed business people who also happen to be musicians/technicians)

* Another government to deal with-- Local/Regional. First thing to do is to go down to your local downtown county seat, and register your business name with a DBA (Doing Business As; unless you want a different type of set-up like a corporation, in which case you'll also need a lawyer)

* Print-up cards... hand them out

* Consult with your accountant, and keep receipts for EVERYTHING, and keep good records on incoming/outgoing

* Pay your taxes (all of them, local, state, state sales tax, federal)

There's probably more specific advice I could give, once you have specific questions, but you should know that I'm not an accountant or a lawyer (but I have both), and you'll eventually need some of that legal advice that you can't get on the Internet...

GJ

[Gregg Juke]

PS-- Stuff like equipment insurance is available from the Musician's Union, also often both property and health insurance can be acquired with the group rates available from your local chamber of commerce.

Problems you may encounter with a true _home_ studio-- noise ordinances and zoning laws, so you may want to proceed with caution until you get the lay-of-the-land, legally speaking.

GJ

[kslight]

PS-- Stuff like equipment insurance is available from the Musician's Union, also often both property and health insurance can be acquired with the group rates available from your local chamber of commerce.

Problems you may encounter with a true _home_ studio-- noise ordinances and zoning laws, so you may want to proceed with caution until you get the lay-of-the-land, legally speaking.

GJ

The home studio is truly private, geared for my composing and mixing needs only. The only recording of other musicians would be at another location, usually a proper studio on a freelance basis, sometimes someone else's home studio.

My concern and scope of becoming a business is geared towards collecting my rate for working at these studios, transportation to get there (usually long distance), and my rate for mixing at home. As well as having income from remix and composition projects. That sort of thing.

[kslight]

So in a nutshell talk to an accountant?

I'm "aware" of the DBA concept I guess I don't fully understand what that means or even who to go to for that.

Printing is a non-issue for me...day job at a print shop. Looking to change that, obviously, but for right now it has it's perks.


Thanks for taking the time.

It depends on where you live (state regs often differ from federal; you'd think they'd get it together)...

* Get a good accountant (one that understands state and federal income tax law, and understands the needs of independent/self-employed business people who also happen to be musicians/technicians)

* Another government to deal with-- Local/Regional. First thing to do is to go down to your local downtown county seat, and register your business name with a DBA (Doing Business As; unless you want a different type of set-up like a corporation, in which case you'll also need a lawyer)

* Print-up cards... hand them out

* Consult with your accountant, and keep receipts for EVERYTHING, and keep good records on incoming/outgoing

* Pay your taxes (all of them, local, state, state sales tax, federal)

There's probably more specific advice I could give, once you have specific questions, but you should know that I'm not an accountant or a lawyer (but I have both), and you'll eventually need some of that legal advice that you can't get on the Internet...

GJ

[Gregg Juke]

An accountant would be a great start.

You can have various structures to your business (I'm assuming you're in the U.S., not Canada or elsewhere)-- DBA ("Sole Proprietorship"), Partnership, LLC (Limited Liabilty Corporation), S-Corp, Inc., Corp., etc.

The various incorporated/corporation set-ups give you certain benefits, but cost in time and money to set-up. Sole-proprietorships are easy to set-up (call your county government office for contact info and details), but they are basically making "you" the business (no separation, thus protection, of personal and business assets... If your business gets sued, _you_ get sued). This is the way to start, but as you grow, one of the other set-ups may suit you better (again, talk to an accountant and/or a lawyer). It cost me an afternoon downtown and $15 to set-up my business years ago. I'm sure prices have gone up, but it is still much less expensive than having a lawyer set-up a corporation.

Having at least a DBA will allow you to get a business bank account with your bank (easier to track business funds, write checks to keep track of expenses for tax time, etc.), get insurance if necessary, etc.

BTW, if you're going to have _any_ clients at your studio, you will need some kind of business insurance. If you're going to have folks into your rented home/office, your landlord will insist that you have a minimum amount of liability insurance and a letter of indemnity to protect him against claims if someone slips on your stairs, loses their hearing from blasting headphones, accidentally drinks cleaning alcohol intended for your tape machine, etc., etc.

This is also why you'll want to be aware/careful regarding zoning laws; if the neighbors catch-on due to loud music or lots of "unsavory music-types" hanging around your house and parking their cars in all of the spots, you could get blown-in with the local authorities and fined or shut-down.

EVERYBODY wants the benefits of having a business without "being bothered with all of that other stuff I don't want to know about," but unfortunately, it doesn't work that way. Not most of the time, anyway. You might dodge a bullet for quite a while, but if you don't take care of business, and pay the various pipers, it will most definitely catch-up to you in the end.

GJ

[kslight]

BTW, if you're going to have _any_ clients at your studio, you will need some kind of business insurance. If you're going to have folks into your rented home/office, your landlord will insist that you have a minimum amount of liability insurance and a letter of indemnity to protect him against claims if someone slips on your stairs, loses their hearing from blasting headphones, accidentally drinks cleaning alcohol intended for your tape machine, etc., etc.

This is also why you'll want to be aware/careful regarding zoning laws; if the neighbors catch-on due to loud music or lots of "unsavory music-types" hanging around your house and parking their cars in all of the spots, you could get blown-in with the local authorities and fined or shut-down.

EVERYBODY wants the benefits of having a business without "being bothered with
all of that other stuff I don't want to know about," but unfortunately, it doesn't work that way. Not most of the time, anyway. You might dodge a bullet for quite a while, but if you don't take care of business, and pay the various pipers, it will
most definitely catch-up to you in the end.

GJ

This is one reason I would not be having anyone over at my space...besides the fact that I'm really not setup to accommodate a band in my house, or even interested in inviting a bunch of shifty "musician types" into my home.... It
would really just be my writing/mixing studio for commercial projects.

[percussion boy]

You might want to check out SMALL TIME OPERATOR. It has been revised many times and is aimed at someone who hasn't started a small business before. The (older) version I read seemed California-specific re state law, dunno if that's true now.

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Definitely get good tax advice. The whole quarterly self-employment tax thing is more complicated than the normal wage slave income tax. I haven't been there, but watched a friend go through it.

[Gregg Juke]

>>>>Definitely get good tax advice. The whole quarterly self-employment tax thing is more complicated than the normal wage slave income tax. I haven't been there, but watched a friend go through it.<<<<

You don't have to file quarterly, but you can. That is why you need good tax advice from a pro that understands this type of business.


GJ