Help how to start a small welding buisness

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OK I'm a hobby welder that is turning the corner to a small very small business. How do you transition to a business. I'm a science teacher this is a new world.I guess my first step is get or become an LLC and insurance. I have called a few insurance places but I'm such small potatoes they do not seem interested.Any help would be great.ReberDave ReberWadsworth Ohio
Reply:You don't necessarily need to form an LLC. You can be a Sole Proprietor. Lot's of myths about an LLC offering protection of your personal assets.Get a meeting with a CPA or a really good Tax advisor- they don't always have to be a CPAProbably need a Business license in your city- really depends on local government.Insurance for any type of small hobby/small welding business always seems to be a hurdle-Ed Conleyhttp://www.screamingbroccoli.com/MM252MM211 (Sold)Passport Plus & Spool gunLincoln SP135 Plus- (Gone to a good home)Klutch 120v Plasma cutterSO 2020 benderBeer in the fridge
Reply:I'll agree on a good accountant/tax adviser. As far as insurance, talk to a broker rather than an "agent". An "agent" works for one company. A Broker has a number of companies they deal with and can help you find one that fits you best. You'll probably end up with some sort of general liability policy that covers a wide range of general things. You probably don't need ( or want to pay for) coverage for building collapse and structural work, and so on. Your broker can walk you thru what you do and don't do and tailor your policy to fit those things and what key words can cause issues and raise your rates. Expect that you may be paying as much for a policy for doing side work as you might if you did this full time..No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth! Ronald Reagan
Reply:Thanks guys I have talked to a few people and got mixed messages. This seems like a good path.Dave ReberWadsworth Ohio
Reply:Originally Posted by DSWI'll agree on a good accountant/tax adviser. As far as insurance, talk to a broker rather than an "agent". An "agent" works for one company. A Broker has a number of companies they deal with and can help you find one that fits you best. You'll probably end up with some sort of general liability policy that covers a wide range of general things. You probably don't need ( or want to pay for) coverage for building collapse and structural work, and so on. Your broker can walk you thru what you do and don't do and tailor your policy to fit those things and what key words can cause issues and raise your rates. Expect that you may be paying as much for a policy for doing side work as you might if you did this full time.
Reply:LLC is not worth it for a one man shop. Neither is insurance, until it's required. Liability insurance doesn't help you, it helps your customer. If you are found to be at fault for an accident your insurance company can sue you for their losses.Ian TannerKawasaki KX450 and many other fine tools
Reply:Buy a self help book on running a small contracting business.  I have this one and like it:http://www.amazon.com/Running-Succes...ntracting+bookIt's going to cover a lot of these basic questions you're asking yourself.  And probably a few other questions you haven't thought of yet.Register to collect sales tax if you have to in your state.  Since you're in OH I can help with more specific advice.  Go to the Ohio Business gateway site.  Register your business name and setup an account with the state to collect sales tax.  Registering your business name is about $75 every 5 or 10 years.Open a business account with a bank.  Learn how the rules differ for business accounts.  Things like, you're responsible if someone steals your business checks and writes bad checks.  I don't even keep a business checkbook.  I have a debit card and a business VISA I use to handle all purchases and banking for the business.  DO not mingle your business banking and personal banking in one account.  If you get audited sorting them out is a nightmare.Deposit every red cent you make, even if you're paid in cash.  Create a record in case the IRS comes sniffing around.  Pay your federal income taxes.  Think twice about writing off any equipment, and talk with a tax professional about depreciating equipment versus writing off the whole value in a single year.  Think three times about writing off a vehicle.  But do track your mileage for the standard deduction for business miles.  Learn about the difference between a business and a hobby.  there's lots of good advice on line, but a good accountant can help with this too.  Do the necessary things to ensure that the IRS treats you as a business.  Advertise.  Collect sales tax.  Carry insurance.  Maintain a business bank account.  There's lots of other ways to "prove" you're a business.  Try to do them all.  Rmember, the IRS considers you guilty until proven innocent.  Keep every receipt for every single thing you buy for the business.  Most of it can be used to offset the tax you owe on the money you earn.  Pay your sales tax 2x per year.  At least this is how I set up because I don't have a fixed location.  Don't forget.  The state treasurer's office likes to send collections notices, and if you fail to file, they'll guess how much you owe based on some average revenue for your type of business.  The bill you'll get for failing to file or filing late will make your eyes bug out.  (This is the voice of experience talking).  So make sure you collect Caesar's due, tuck it away in a savings account, and render unto Caesar every six months.  I remit the sales tax I collect with by using my Business VISA to make the payment.  Not sure what Wadsworth requires for a business license.  I haven't worried about this in Dayton.  Seems like welders in Ohio do not require any professional licensing; unless you're doing steam, potable water, or refrigeration piping.  Then you'll need the appropriate Boiler stamp, Plumber's, or HVAC license.   I'm not sure what the actual requirements are when it comes to carrying a general contractor's license.  But I haven't done all my homework here, and I haven't had any issues yet.  Your experience may differ. Business insurance can be a back breaker.  A good agent will ensure you're covered for all sorts of potential problems.  The insurance cost will depend on a few things, # of employees, gross annual revenue, what type of work you do, and whether you're mobile or shop based.  Heavy structural steel, Oil & Gas infrastructure, and a few other categories are very expensive due to the high risk nature of the work.  stay away from those areas and don't do mobile work if you want to keep your insurance reasonable.  Your homeowner's insurance has all sorts of loopholes if you're running a business and you're robbed or your home is damaged as a result.  Generally speaking your homeowners policy will not protect your business assets.  They also won't pay if you burn the house down by welding for your business in the garage.  Be extra careful about this one.  It's probably the single best reason to get business insurance.If you have a business vehicle, register it with commercial plates.  I have a 3/4 ton truck.  the commercial plates registered at 12000lbs GVWR are about $150 a year.  The DOT fine for not registering a commercial vehicle start at $250.  Get commercial coverage from your auto insurer.  This is separate from the rest of your business insurance and is a much simpler matter to take care of.  if you're using a truck and pulling a trailer for business purposes, make sure you register for the combined weight.  The small increase in fee is tiny compared to the the fine for being over weight.Look into the standard terms you use for your quotes and estimates and contracts.  If you do work for a big company read the fine print.Setup an account with paypal or square to accept credit card payments.  Bump your standard rate to cover the transaction fees and then offer a cash discount for immediate payment.  That's all I can think of for advice for now...Benson's Mobile Welding - Dayton, OH metro area - AWS Certified Welding Inspector
Reply:A DAB- Interesting you mention Sales tax and takes in general. State of California doesn't mess round with sales tax either. You need to pay them or they'll show up with the Sheriff and and padlock. I worked at a shop and witnessed it.You don't get a payment plan with the sales tax office here :0Accounting/taxes is my main advice to young photogs trying to get their business started. DON'T PHUCK AROUND.  I have seen a few go under because they skirted the tax rules and tried to write off every purchase they made or didn't plan ahead for when Cesar's part was due.City of LA offers 3 years no Taxes to help people start a business- just gotta follow a couple rules but some idjits don't.Ed Conleyhttp://www.screamingbroccoli.com/MM252MM211 (Sold)Passport Plus & Spool gunLincoln SP135 Plus- (Gone to a good home)Klutch 120v Plasma cutterSO 2020 benderBeer in the fridge
Reply:I disagree about the LLC. It does depend on your state . I am in wisconsin and I am a single party LLC some states do not allow a single party LLC. It cost me $125 to become an LLC and $25 per year to stay an LLC. It is not a liability cure all but does help and I would do an LLC before sole proprietor. From a tax stand point a single party LLC is looked at as a sole proprietor but from a legal stand point their are some pluses. I would not incorporate as a one man shop. Their are some social security issues that most do not know about that comes with it. The LLC does not have those issues.  It was very easy to become an LLC here in wisconsin. you just need to find out what is involved in your state. I did mine at home on the internet through the state commerce site after my accountant told me he would charge me $650 to do the same thing and told me where to look and to do it myself. He said most states are set up that way. Easy and legal.
Reply:^^ come down to IL. LLC will cost you over $1kTorchmate 2x2 CNC with Flashcut CNC controlsHypertherm Powermax45 Esab ET220i Razorweld 195 MigRazorweld 200ac/dc TigTormach 770, Tormach xstechRazorweld, Vipercut/Vipermig, SSC Foot Pedal Dealer
Reply:Check with your current insurance rep, maybe getting or increasing a umbrella policy could be a option.
Reply:Originally Posted by thegaryI disagree about the LLC. It does depend on your state . I am in wisconsin and I am a single party LLC some states do not allow a single party LLC. It cost me $125 to become an LLC and $25 per year to stay an LLC. It is not a liability cure all but does help and I would do an LLC before sole proprietor. From a tax stand point a single party LLC is looked at as a sole proprietor but from a legal stand point their are some pluses. I would not incorporate as a one man shop. Their are some social security issues that most do not know about that comes with it. The LLC does not have those issues.  It was very easy to become an LLC here in wisconsin. you just need to find out what is involved in your state. I did mine at home on the internet through the state commerce site after my accountant told me he would charge me $650 to do the same thing and told me where to look and to do it myself. He said most states are set up that way. Easy and legal.