The below questions relate to starting a small business in Williamson County, TN. Please check with your local county offices and/or city hall for the specific licensing requirements in your area.
To sell cakes from my home do I need a business license?
Maybe not. Check with your local city hall or county government administrative offices regarding business license requirements.
For example, in Williamson County, TN you don’t have to register your business until you’re making at least $3,000 year. That was a few years ago, though. It might be a different amount now.
What are the advantages to having a business license?
It’s a good idea to set things up in the beginning so that there’s room for growth, which will hopefully allow you to handle any changing needs of your business. Maybe your gross sales aren’t over the minimum requirement just yet, but one day soon they might be, and then you’ll be too busy handling all that extra business to fill out forms and submit paperwork.
Plus, you’ll need a business license to set up wholesale accounts with vendors and for other business-related services.
Of course, once you’ve registered your business, then you’re no longer operating “under the radar” and will also need to file sales tax. You can apply for a sales tax ID number online: http://www.tn.gov/revenue/forms/sales/index.shtml
My sales and services don’t exceed the listed minimum amounts, but I have to file sales tax because I get nearly all of my supplies through CK Products, which is an out-of-state wholesaler that doesn’t collect TN sales tax.
How do I get a business license?
You can apply online (https://apps.tn.gov/bizreg/) or visit the appropriate municipal office to register your business. There will be a fee, usually the minimum business tax.
I did all this in person because I looked at it online and knew I needed help filling out the forms. Since I operate my business from home, and my house is within the Franklin city limits, I had to register with both the city and county government. I had to pay the fee twice ($22 to each, so $44 total) to get my business license.
Do I need liability insurance?
I think so and highly recommend it. I have an umbrella liability policy.
You never know what may happen, so it’s a good idea to be covered. Seek advice from your insurance agent or someone trustworthy who is knowledgeable in this field. More than likely, your homeowners insurance policy won’t cover your business.
What is a tax ID number, do I need one, and if so why?
A tax ID number, or EIN (Employer Identification Number), is like a social security number, only it’s used to represent your business instead of your personal SSN.
Technically, I don’t think you need one unless you intend to hire employees, but I have one and use it for registering wholesale accounts, etc.
Again, I think it’s a good idea to set things up from the start so that there is room for growth and expansion. While you may not need a EIN at the moment, applying for one online is super easy and only takes a few minutes. Then, you’ll already have it if you ever need it.