- Restrictions – Some subdivisions have very strict restrictions about home business, whether or not you have clients coming to your home and whether or not you wish to put out a sign advertising your business. Check on this before investing the money in a longarm. I have no clients who come to my home and it hasn’t hindered my business at all.
- City Ordinances/Codes – Find out what the local rules are governing home business. I had the hardest time conveying to the city officials here what kind of business I run. They finally categorized me as an artist.
- County/State Tax Authority – Check with your local authorities. Some states require sales tax to be charged on everything – your time included. I argued with Kentucky about this and they insisted I charge sales tax on my quilting charges, as well as batting and/or backing fabric sold.
- Insurance – Most homeowner’s policies will not cover anything regarding business unless you have a business endorsement (which costs extra, of course!) and not all policies offer the endorsement. Get everything in writing! When we had Allstate, the agent told me that if my machine was used at least 50% for my own use, it would be covered under my homeowner’s policy. When I asked for that in writing, he went to underwriting and found out that if I did just one quilt per year for a customer, then the machine was not covered. While I would not want to have my machine not covered, I would be more concerned about liability of someone falling or getting hurt on my property and not having insurance coverage. One thing to remember: Anyone can sue you for anything! Whether it’s frivolous or not, you will still have to defend yourself at least until the lawsuit can be dismissed by the court. If you have insurance coverage, the insurance company will provide your defense . . meaning they pay for an attorney to defend you whether or not you are actually liable. But, if you do not have insurance coverage, you’re on your own! Attorneys are not cheap!!
A fellow longarmer I met through the internet only quilts for herself and does quilting for various charity projects. She never quilts for the public so she didn’t get the necessary business licenses. That was perfectly within her legal rights to go that route. But .. one day a friend asked her to quilt a top for her. At first she refused but finally agreed to do it and charged her some minimal amount . . maybe $50 — I never remember the details. The friend took the quilt to work and showed it off to all her co-workers. Just so happened she worked in the same building with the county taxing authority and someone there asked who did it and the longarmer got hit with some pretty hefty fines for doing business without the required licenses. I’m not saying this particular longarmer was trying to skirt the laws but there are some longarmers who do. It’s better to comply with all the rules and regulations and not have to be worried that you’re going to get caught doing something wrong. And, remember . . ignorance of the law is no excuse. Just setting up your business, without checking to find out what the rules are, and then saying well, I didn’t know . . is not going to get you out of trouble.
This is not meant to be an all-inclusive list of everything that needs to be done before beginning your business — just what I can remember at this time.