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  • What qualifies as a "business"?

    Can I call my side job of helping people with their computer problems a business?
    If so, then do I need to pay taxes, advertising, etc?

    How do people startup their own business?
    How'd I get so white and nerdy?

  • #2
    Re: What qualifies as a "business"?

    Start here. And here. Get a good accountant, too.

    Miulang
    "Americans believe in three freedoms. Freedom of speech; freedom of religion; and the freedom to deny the other two to folks they don`t like.” --Mark Twain

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    • #3
      Re: What qualifies as a "business"?

      doc1456 asked:
      Can I call my side job of helping people with their computer problems a business? If so, then do I need to pay taxes, advertising, etc?


      If you charge money for your services on a regular basis, then you are operating a business in the eyes of the state and must get a GE Tax license and pay 4% tax.

      You will also have to pay State and Federal income and Social Security taxes if you make above a certain amount. Ask an accountant for advice at what level that kicks in for you.

      Technically, even children mowing lawns, walking dogs, washing cars and babysitting must pay GE Taxes in Hawaii, although I've never heard of them going after youngsters.

      If you don't charge money, then this is a hobby.

      I'd recommend you attend and join business networking groups such as Small Business Hawaii to learn from other entrepreneurs.

      I've been in business for myself since intermediate school.
      It's not easy to get off the ground, but I found it to be very rewarding.

      Good luck.

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      • #4
        Re: What qualifies as a "business"?

        One thing to watch out for though is when applying for certain business related marketing tools such as credit card machines. In some cases these service companies will ask for proof of a physical business location called a Brick and Mortar establishment.

        With today's virtual marketplace it's easy to give the impression of having a large corporate style business with pictures of mirrored corporate headquartered buildings and impressive letterhead. But it's just a laptop and a P.O. Box.

        Here's what you need to do to establish yourself as a business here in the State of Hawaii in these exact steps:

        1) Get a GET license from the Department of Taxation fill it out and pay your $20. Choose cash instead of accrual method of paying taxes so you are taxed only on income received and not income still pending from deadbeat clients. Choose Sole Proprietorship because it's the cheapest way to start a business. With a corporation, yes there is personal liability protection however there are many federal hoops you have to jump thru and it's just not worth it.

        2) Pick a name and register it with the DCCA (Department of Commerce and Consumer Affairs) from there you will get a DCCA number that you will need in order to go to the next step.

        3) Establish a business checking account (as most vendors you will work with such as credit card processing companies) will only do business if you have a business checking account. When applying for a business account one of the things needed will be a DCCA number.

        4) Print out some business cards with your cell number as your business number (cheaper than to actually go with a business number from Hawaiian Telecom but you won't get yellow page listings)

        5) Get a good invoice/billing tracking software such as Quickbooks.

        6) Find a good CPA to handle your books for tax time

        7) Make sure you deduct from any sales your GET taxes and personal income taxes and put it in a savings account so when it comes time to pay it you can.

        8) If you're gonna do business with large companies or even the federal government you'll need a fax machine. Subscribe to those online fax services as their servers are always on as opposed to a fax with a jamed paper feeder. Also if you're selling product to a government agency you will probably have to submit UPC barcode information for their tracking and inventory management control. There's a few online companies that can assist you with that.

        And last but not least, don't go into partnership with a friend!!!!! Unless you want to make him your worst enemy. Trust me on that, I've lost one of my best friends that way. Keep it a proprietorship for now.

        Oh yeah and don't quit your day job until you have completed at least one taxable year in business for yourself.

        Buy a coffee pot, lots of aspirin and a comfy sofa to sleep on as you will have many sleepless nights.

        If you can hire an answering service as no one likes to call and listen to a voice prompts.

        Welcome to small business 101! Oh yeah and do what my VP cousin for Smith Barney recommended to me...join a civic group such as the Rotary or Elks club for some prosperous networking!

        Good luck and remember, you WANTED to start a small business. Remember that everytime you're rubbing your sore head whenever you're tired and pondering why you got into this in the first place...Oh yeah that's right...this is supposed to be fun!
        Life is what you make of it...so please read the instructions carefully.

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        • #5
          Re: What qualifies as a "business"?

          I remember in Economics 101 class I took in the 80s the teacher mentioned only 10% of business' survive the first year. I don't know the current stats.

          Comment


          • #6
            Re: What qualifies as a "business"?

            Originally posted by craigwatanabe
            [...]
            3) Establish a business checking account (as most vendors you will work with such as credit card processing companies) will only do business if you have a business checking account. When applying for a business account one of the things needed will be a DCCA number.
            [...]
            A curiosity question...
            I'd guess Adrian will be starting out slow as I believe he's young (19?) and in school. And, he refers to it as a side job. Do you advise he hook up with a credit card processing company to begin with? I ask because after 27+ years in business I've never accepted credit cards...with one exception. I decided to try PayPal to accept payments online for seminars I occasionally teach. I was surprised at how few people paid that way, instead preferring cash or check! Considering the nature of his business do you think Adrian could get away with PayPal vs a regular cc processing company? As a side job, I'd guess Adrian would like to keep the administrivia as simple as possible...not that there is any such thing with a small business, side or otherwise!

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            • #7
              Re: What qualifies as a "business"?

              Originally posted by Creative-1
              <snip>
              If you charge money for your services on a regular basis, then you are operating a business in the eyes of the state</snip>
              What if I don't get paid everytime? Sometimes I help out people who PM/email me via forums.

              Originally posted by tutusue
              A curiosity question...
              I'd guess Adrian will be starting out slow as I believe he's young (20) and in school. And, he refers to it as a side job. Do you advise he hook up with a credit card processing company to begin with? I ask because after 27+ years in business I've never accepted credit cards...with one exception. I decided to try PayPal to accept payments online for seminars I occasionally teach. I was surprised at how few people paid that way, instead preferring cash or check! Considering the nature of his business do you think Adrian could get away with PayPal vs a regular cc processing company? As a side job, I'd guess Adrian would like to keep the administrivia as simple as possible...not that there is any such thing with a small business, side or otherwise!
              So far, I only had cash paying customers, and everything was by word of mouth or online linkage.


              The largest this will get, is probably when I got time to build a working website and having that link (along with my email and cell) on a business card (which I already have, but its free, so that doesn't count) and that I've named my business.

              IF I do get a car, then probably I can increase customers, but it will never force me to move into a physical location (other than my house), sign advertising, or paying via credit card/check. But then again, it won't be a side job, it'll be a part time job with me juggling my soon to be job and schooling (plus all of the things a young adult should be doing).

              And just to clarify: I'm not doing this for money; I just like helping people with what I learn. This side job actually got started because my cousin needed computer help and my Mom pushed me to fix her problems, then Aunty Lynn asked me to do a few jobs, then someone else here, and it just snowballed into the situation today; with me having a business card, soon to be website (or sort-of-working website) and a dedicated email address for it. (maybe I am naivein about this whole thing)
              Last edited by adrian; January 25, 2006, 07:46 PM.
              How'd I get so white and nerdy?

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              • #8
                Re: What qualifies as a &quot;business&quot;?

                Besides the good advice you have received so far, DCCA offers a "one stop shop" for starting a business where they will assist you in filling out most state and many federal forms. The agency is callled the Business Action Center, a link to their website is here.

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                • #9
                  Re: What qualifies as a &quot;business&quot;?

                  One thing about good business is that if you are going to do online transactions, then having a credit card processing company is a good thing. Of course hooking up with one is much like applying for a credit card...how good your credit rating is.

                  For now I guess cash only is okay. But once you receive money for services rendered, then it's a business.
                  Life is what you make of it...so please read the instructions carefully.

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                  • #10
                    Re: What qualifies as a &quot;business&quot;?

                    Originally posted by doc1456
                    What if I don't get paid everytime? Sometimes I help out people who PM/email me via forums.
                    I don't get paid everytime I cast a film (because I like to help starving, struggling indie filmmakers and I also comp my services for PSAs when everyone else involved is comping). But, I'm still a business in the eyes of the State.

                    Originally posted by doc1456
                    So far, I only had cash paying customers, and everything was by word of mouth or online linkage.
                    This is great, Adrian, but it doesn't negate that you are a small business person! Ok...very small! But the State wants it's cut! You're just working "under the table" right now...something lots and lots of people do in your situation.

                    Originally posted by doc1456
                    The largest this will get, is probably when I got time to build a working website and having that link (along with my email and cell) on a business card (which I already have, but its free, so that doesn't count) and that I've named my business.
                    Free is a good thing! Keep that overhead down! But that won't make a bit of difference to the State. If it looks like a business, acts like a business and smells like a business...it IS a business in the eyes of the State, esp. if you're getting paid to render a service and have a business card.

                    Here's an example for you. I house sit several times a year for a couple in town. I get paid. The pay I receive isn't much in comparison to my real (make that 'reel'!) job. I do have a GET license and I report the house sitting income. I don't have a business card or a separate email addy, phone #, web site, or anything else. Taking into consideration both time and money, the consequences of NOT operating it as a business are much larger than the income I make! The chances of the State finding out about this extra income were probably extremely slim, had I not started out reporting it. But, peace of mind is, well, priceless!!!

                    Originally posted by doc1456
                    IF I do get a car, then probably I can increase customers, but it will never force me to move into a physical location (other than my house), sign advertising, or paying via credit card/check. But then again, it won't be a side job, it'll be a part time job with me juggling my soon to be job and schooling (plus all of the things a young adult should be doing).

                    And just to clarify: I'm not doing this for money; I just like helping people with what I learn. This side job actually got started because my cousin needed computer help and my Mom pushed me to fix her problems, then Aunty Lynn asked me to do a few jobs, then someone else here, and it just snowballed into the situation today; with me having a business card, soon to be website (or sort-of-working website) and a dedicated email address for it. (maybe I am naivein about this whole thing)
                    There's that "looks", "acts" and "smells" part! A physical location, signs and credit card or check acceptance aren't necessary to be considered a business. And, who knows...this "side job" just might turn into a bigger snowball that will net you a nice "side" income...or better. Is that something you're open to?

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                    • #11
                      Re: What qualifies as a &quot;business&quot;?

                      Thats a nice right up on business basics craig. Thanks for the info!

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                      • #12
                        Re: What qualifies as a &quot;business&quot;?

                        Guess what? My Mom is really interested in it. She's now pushing me to get my "license" (I seen a few info here, and I'll look through it). She'll put the first "advertisement" in the St Joseph Church bulletin, so I'll really need to drive!
                        How'd I get so white and nerdy?

                        Comment


                        • #13
                          Re: What qualifies as a &quot;business&quot;?

                          Adrian, you may want to consider some liability insurance. Let's say you take in a customer's computer and it's running real slow.

                          So you install Ad-aware into his Windows 98SE machine and clean out all that malware. Problem is that you also cleaned out some vital .dll files and now the computer won't boot up! On top of that you ran a scan disk and then a disk cleanup and suddenly certain data files are missing.

                          Unless you have your customer sign a liability waiver on loss of data, you'll be held liable for any loss of data. If it's a business computer that relies on that data for inventory control or client contact info, you could be on the receiving end of a really pissed off customer.

                          When I have to fix a computer where information retention is critical, the first thing I do is to remove the hard drive and attempt to make a ghost copy of it before I begin to do any registry cleaning.
                          Life is what you make of it...so please read the instructions carefully.

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                          • #14
                            Re: What qualifies as a &quot;business&quot;?

                            So, I've done the following:

                            got the GET license, registered name, distributed business cards to people, in the process of placing an ad with the church bulletin.

                            In a few weeks, I might be able to get my license (or get good enough to attempt it), then I'll get some magnetic signs to put on the car and/or family cars' bumpers. I don't know if I should get a checking account or a small business credit card (I'll need to get some accounting software and other stuff), so I'll be battling over that for the next few days. Oh, gotta print out the pricing lists, TOS, and other things for the customers, and I'll need to get some way to track the customer's info (address, when it was last serviced, etc) - which I might use my programming skills to whip up a simple vb.net to database interface. Almost forgot about the tshirts (aka my uniform), so I'll be recognizable.

                            The ball is rolling now, and it won't stop!
                            How'd I get so white and nerdy?

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                            • #15
                              Re: What qualifies as a &quot;business&quot;?

                              While we've got all these business people in here I have a question for you all too. What all does the GE tax cover? Goods and services rendered in the state itself?

                              I'm asking because I own half of an LLC that's based in Texas. I would assume that if I lived there and I'm just receiving income from the business it would go in the state+federal tax pot, but not GE (since we're not really "doing business" in Hawai'i).

                              BTW, for what it's worth, the LLC hasn't been too bad for us. It differs per state, but in Texas it's as simple as filling out a form, paying a $200 startup fee, and filing franchise tax forms each year (which are nothing-due if you gross less than $20K or so). You also have to file another IRS form, but again it's usually pretty easy once you see where all the numbers go (have an accountant do it at least once). 'Course it may be more trouble than it's worth if you aren't doing a lot of business, but it might provide a bit more liability protection as long as you do your books carefully and thoroughly.

                              Oh and congrats on getting your business going! That's great.
                              Last edited by Bard; July 29, 2006, 05:37 PM.

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