# New part-time business venture



## Les (Jul 31, 2010)

Maybe you guys could advise me on this. 

For the past several years I've been acquiring and refurbishing lighting fixtures (mostly 360Q's) from ebay. I've got about 20 now (not including one that [user]ship[/user] built for me -- I'm keeping that one!), which I've been looking at selling in order to make room for fresh inventory. I posted an ad on Craigslist and got a call from a video guy for a church in Frisco, Tx and he is interested in buying all of them. 

Here's where my question is. He asked me if I would be willing to service their current fixtures (they already have about 20 360Q's) and then continue to come up on an as-needed basis (he mentioned annually) to do an inspection on their lights and possibly place orders for parts and make repairs as necessary. It would be an hourly thing, where I start the clock when I leave my house, and stop the clock when I return. He also encouraged me to make business cards, because they are having a seminar in October where the representatives of about 300 area churches will be in attendance. Since they may ask about lighting, he would like to be able to give them my card and say "well you know, we have this great lighting guy who offers this service...".

Should I think about naming this service and creating something like an LLC, or just consider keeping it an informal service? How about taxes? Should I keep a record of what I'm paid and claim it as income every tax season? This would be a one-man operation, most likely very part-time. 

I'm also thinking about purchasing "junkers" on ebay and fixing them up and offering them to sale to these churches with a small margin going to myself depending on what parts I would need and how many hours are put in to them.

This service wouldn't touch rigging or major electrical repairs/additions. Mostly, I'm just focusing on fixtures. I can advise on what dimmers and how many to get, but I would refer them to a certified electrician for their installation and wiring needs. 

Thanks for your help!


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## soundman (Jul 31, 2010)

Creating an LLC mainly protects your assets should any one try and sue you. If this would not be the main source of income I would look into setting it up much like an artists that only sells a handful of pieces a year and makes more than $600 but can not live off the earnings. This will allow you to deduct expenses like parts and mileage. I would call an accountant, this time of year they should have some free time and they will be able to give you better advice and steer you in the right direction.


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## ruinexplorer (Aug 1, 2010)

I agree. I think at this point, you would be looking at "hobby" income. I don't know where the exact threshold is for that designation, but then again, before talking to a tax advisor, you would need to estimate what your income and expenses might be for the year. Before I knew of that tax designation, I had gone out and got a business license. After the first year, they started having me report my earnings annually instead of monthly since I didn't do enough business. After a couple years, I found out the hobby designation and returned my license (totally unnecessary at the time).


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## museav (Aug 4, 2010)

You may need to consider that you apparently would be selling commercial products and parts, thus you are selling, or reselling, manufactured products rather than just services. And as those products would apparently sometimes be the entire transaction rather than just being used to provide the services contracted, that may impact what you can do.

A business license is usually separate from income tax issues, so you need to check local regulations on that and things like sales tax IDs. You may even run into zoning and county code issues with running a business out of your residence, for example our county code prohibits 'home based businesses' that have daily deliveries, thus some people get a post office box or a box at a UPS Store or similar to use as the business mailing address and for deliveries. And a friend ran into major problems with their HOA when they started a part-time home based business that involved having any clients or deliveries at their residence.

Another consideration, you don't want to find out after you make up business cards and start getting known that the business name you're using is already registered by someone else. I know some people that registered companies just to make sure they had rights to the name.

So talk to someone who really knows the local regulations. If you're lucky, there may be a SBA office nearby that could help you or at least point you in the right direction.


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## ruinexplorer (Aug 5, 2010)

Thanks for clarifying Brad. When I got my business license, the city actually provided Small Business Administration assistance in the form of classes and plenty of reference materials. They provided a lot of great advice for what I could do out of my house. Some restrictions were that I could not have customers come to my residence. All stock materials had to be minimal enough that they could be stored in a standard closet. I could not store anything dangerous (something that required a flamable cabinet for instance). I could not have employees other than family members. 

So, definitely go find your local SBA office as Brad mentioned. You never know if this might be a good venture. You might be surprised.


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