artwork Friends, Family and Co-Workers say I should start a Business

[SavinaRed]

So I've been playing with hot sauce now for over a year and have come to the point where people are saying I should start a business. Co- workers reorder my sauce all the time and I'm charging them $5.00 for a 5oz woozy. I work at a car dealership and all the detailers who are Hispanic are my biggest fans and buy it from me all the time. Coming up with a name is not an easy thing as I've been thinking about this for sometime now. I have a couple ideas that I'm bouncing off a few people but nothing permanent yet.
 
A quick story that happened a couple of days ago was a local restaurant owner who has a very successful business was at our dealership purchasing a truck and I asked him if he and his wife would critique my hot sauce and they gladly obliged. He said he would buy it from me and sell it at his business as he said it was really tasty and had the right heat level. Its primarily a hab sauce and its the main ingredient. I've had a couple other similar experiences like the one above. 
 
I know a local restaurant chain and grocery chain in my area where they would carry my sauce.
 
So any tips from you guys/gals in the business would be appreciated. Thanks !

 

[Lucky Dog Hot Sauce]

What ^^^ said.



(Dangit - 2nd page screwed up mah funny!!)

 

[Sam & Oliver]

Washington is about $200 to get an LLC registered with the state.  An LLC is only relevant to business in your state.  The IRS doesn't care if you are an LLC or a Sole Proprietor, both busniess structures file taxes as a Sole Proprietor using your personal Social Security number.
 
You don't need a federal EIN (Employer Identification Number) unless you have employees and are filing quarterly reports for employees.  If you don't have employees, don't get a federal EIN. 
 
You may want to talk to a lawyer about basic business issues if/when you get to the point of looking at an LLC, but (present company excepted) most lawyers don't know squat about food businesses.  I'd suggest finding a local Small Business Resource Center in your area.  They can get you through 95% of getting a business started.  They have SCORE volunteers (retired business people) that can help you work up a business plan for free.  Use your food safety inspector to figure out what you need for licensing and facility requirements, storage of product, etc.  Do not ask a lawyer, they most likely won't know and you'll be paying their time to learn what you can learn on your own from the same sources they would get the information from.     

 
It doesn't break the bank or hurt to get a federal EIN.  The LLC is filed as a sLLC (I believe that stands for solo limited liability corporation) and only works if a human is the sole employee of the company.  The moment you hire anyone else, you change to a regular LLC.  Also, a non-human entity cannot be a sLLC.  Your taxes get filed with your personal taxes in an sLLC, but don't mingle your finances between them.
 
Having a FEIN is nice to just have it.  I think mine cost $20?  I've had people ask for it so it's not like it goes without use.  The Bank, for example, needed it when I set up my business checking/savings account specific for my LLC once I flipped Sam & Oliver from a DBA to LLC.  It cost me $100 to register with the state of CT.  So for $120 I'm a LLC, which the insurance company liked, and my FEIN is ready should I hire someone someday (dad as a salesman, accountant for $1 a year, etc).
 
In the grander scheme of things, $120 is not that much for the foundation of your company, IMO.