Do You Need a Business License to Sell Furniture?

You have mastered your woodworking craft enough that you are now looking at your work and thinking “Hey, I could make some money off of this.”

Sure enough, your hobby of making furniture is turning into a business, but where do you even start? 

Do you need a business license to sell furniture? Yes, to sell regularly, you need a business license. If you have employees, you will also need an employer id number. If you are working in an area that is not zoned for this particular activity, you will also need a conditional permit to allow you to work in places like a residential area. 

Some people may be intimated by the thought of having to obtain the necessary license, tax number, and permit to get their furniture out into the world.

However, the process is not as difficult as you may think, and once you have them in your hands, you are free to sell your woodworking masterpieces as you please.

Continue reading to figure out why you need a business license, how to obtain one, and what employer identification numbers and conditional permits are for selling furniture.

Why Do You Need a Business License to Sell Furniture?

So many times it feels like we are jumping through hoops for no apparent reason.

Let me tell you though, this is not one of those instances.

A business license is something that you legally are required to have in order to operate your furniture business.

At one point, that woodworking shop was only for hobbies, but it is now cranking out masterful pieces of furniture that need to get into consumers’ living rooms. 

So, why do you need a business license to sell furniture? This is legally required to protect you and the consumer, make and receive payments, and follow state and federal law on taxation. Obtaining a business license is not overly complicated to obtain, but it will protect you, your business, and your furniture customers in the long run.

Just because your shop may have started out as a place to get your hobby on does not mean that the same reality applies when you start to sell a product from it.

If you are selling something on a regular basis, that means you are required to pay taxes on it.

Taxes stink, but what would stink even worse would be getting your woodworking privileges yanked out from under you because you chose to be dishonest with the government. 

This license also proves that you are a legitimate woodworker who abides by the law and pays those taxes that you are required to.

With the license, you will be compliant with state law but also have the permission to run your business and sell as you please without having anyone ask questions about the legitimacy of your shop and transactions.

No one wants to have to deal with someone asking questions, so get the permit and sell away. 

Plus, this license provides a level of authenticity that will earn your customer’s trust.

Sure, not every person who walks into your woodworking or furniture business will ask to see your business license, but it would get really awkward if they asked you to present it and you were unable to for the sake of not having one in the first place.

How to Obtain a Business License for a Furniture Business?

Business licenses are given out on a state-by-state basis.

Depending on where you live, the process may vary a bit, but it should all look relatively similar no matter where your business is or is going to be.

The process is really quite simple and can be done in no time as long as you take the right steps and pay all required fees in time. 

So, how do you obtain a business license for a furniture business? First, select the name and type of business that you would like to open. Then, call the city or county officials to begin the paperwork and filing process. Next, complete the application and any necessary documentation. Finally, pay any and all fees required for your business registration as your application gets approved.

So, first, before getting the application process started, be sure to have a business name decided on and the business structure nailed down. The majority of options, but not all, include: 

  1. Sole Proprietorship 
  2. General Partnership 
  3. Limited Partnership 
  4. Limited Liability Partnership 
  5. Limited Liability Company 
  6. Corporation 
  7. Non-Profit Corporation 

All of these different structures have different demographics and requirements of you as a business owner.

It is crucial that you chose the proper structure for your business because this declaration has a heavy impact on taxes, borrowing money, and even gaining investors to grow your business. 

Be sure to choose the correct structure to avoid trouble down the road, even though you may not see its implications on a day-to-day basis.

You can even work with other woodworkers to see which type of business model they have legally chosen as well as spark ideas off of one another for the name of your new woodworking or furniture business.

Second, you can either go online or call the city or county office that handles business licenses.

They will be able to tell you how to begin the process and what things you will need in order to obtain the license itself.

If you want to skip the computer and phone, head straight to their office and get the low-down in person.

After all, who doesn’t like some good ole face-to-face communication?

Third, they are going to give you some type of form to fill out in order to get your information submitted and your business permit processed and handed out to you.

This part is pretty simple, go ahead and grab that application, get it filled out, and submit it. Once you have it on its way, it should not be too long (seeing as you have no issues in your application) before you have your license in your hands. 

Last, you will have to pay a fee for the license.

This is usually somewhere between $25 and $50.

Do not be fooled though, this will not be your one and only fee.

Once your business is up and running, you will pay a yearly fee that is based on your earnings.

I know, the one-time fee is never a thing, so maybe this is no surprise to you.

If not, hooray! If so, you will totally get used to it. 

Do I Need an Employer Identification Number to Sell Furniture?

If you are obtaining a business license to sell furniture, and you have employees working for you, then you will need an employee identification number.

Fortunately, this is not too difficult to obtain for you to legally sell furniture, either.

Think of an employer identification number like a social security number for your business.

This little number is how the government keeps track of your business.

No, not in a scary way, but this nine-digit number gives the Internal Revenue Service (IRS) the ability to identify your business when it comes to tax reporting time.

This helps to keep you separated from the millions of other businesses and keeps things simple for you and for the IRS.

As noted earlier, an employer identification number is only required of you if you have employees.

If you are a one-man (or woman) show, then you won’t be required to get an employer identification number.

Come tax time, you will simply use your personal social security number.

If using your social security number does not appeal to you, you are still able to attain an employer identification number, just know it is not a “must-have.”

Do I Need a Conditional Permit to Sell Furniture? 

Many craftsmen find themselves working from their home in either a designated area or in some sort of separate woodshop within their property.

This is no problem when it comes to small projects, but when you are cranking out large pieces of furniture, that means you are also creating more noise, using larger materials, and creating more traffic in a likely residential area.

Because of this, you may need a conditional permit to work your business from such an area. 

A conditional permit consents to the use of a zone that is not allowed by-right.

It is a permit that is obtained through the approval of the city and can be denied if they see fit.

This one can be a bit more difficult to obtain, but not impossible.

Once the permit is approved, there will be a set of conditions listed for the permit by which you must abide.

The goal is to ensure that your business suits the area without interfering with the usual flow of things.

If your business was considered to be unfit for the area, causes too much noise in a residential spot, or creates too much traffic for the location it is possible that the city will deny you the permit and you’ll have to move your business elsewhere.

Also, keep in mind that this permit can be revoked at any time if the owner does not meet the agreed-upon conditions.

If you think you might be overstepping your boundaries, go on and take a step back!

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