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I listen to the podcast and know you guys are growing in a similar fashion as I am. My most recent journey has involved making it to anchor store level, constructing an office/warehouse building on my property to expand into, and hiring my first employees. Perhaps you need a forum alone to discuss this adventure, but for now, this appears to be where such a discussion would fall.
A few revelations I have found recently that hurt a bit I have not heard you discuss on the program.
Hiring an employee – Per at least Indiana law, I am required to purchase workers comp for any and all employees I hire. This may be relegated to W9 employees, but I recall you have gone this route. So far that cost appears to be a minimum of $50/month. There appears to be no minimum hours associated, just employee = workers comp.
Buildings – I’m a wee bit unclear on this one, but here is my understanding. If you run a business out of a building on your property, that building is in no way covered by any of your homeowners insurance. This would also include just a storage building or any building you are storing inventory in. Building insurance, inventory insurance and liability insurance must be purchased separately and will likely far exceed the cost of your homeowners. I am unclear on if they business is in your actual home or not, but I’m guessing it doesn’t work in your favor. It would appear that this insurance alone can exceed $300/month.
There is also some confusion on my end about running your business under sole proprietor vs LLC and liability for your business and employees. It is sounding like your building should be under an LLC as well as the business to best protect your personal assets. I am also wondering how that works if you “own” your building and “rent” it to your business.Sales tax – I collect sales tax on all sales within my state. I have been listening to the podcast for a long time and have never heard you mention sales tax. Just wondered if you were doing that or not.
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Sounds like you’re on a fun adventure. Most folks here won’t be as crazy as either of us. Building large buildings and hiring employees is a big step. It’s taken us eight years to get here. We’re still unsure what level of scavenging we want to get into. We’re looking for balance of a nice income and the freedom of our time.
–Hiring an employee will be different state by state. We definitely pay into Workman’s Comp. It’s just an added cost each month. That’s the price we pay for a civilized society. When I was a worker, I’m glad my employer had to protect me. We use https://squareup.com/payroll which automatically fulfills all our obligations and files our taxes. We love it.
–You’re correct that the insurance on your living space doesn’t cover the business. We must buy extra insurance. More stuff, more insurance. That’s the cost of growing a business.
–You should sit down with a paid lawyer to discuss what protection an LLC actually gives you. There’s a myth that an LLC is some magic cloak that as soon as you pay $99 for the paper, you’re off the hook for all liability. That’s not what we understand after discussing it with local professionals. Obviously you should structure the business the way that works best for you and lets you sleep at night. The US system lets you get as complicated as you want. We encourage other business owners to be honest about what real risks they have in running an eBay business.
–State sales tax. Yes, we pay it on sales in our state. It’s not many items a year to be honest. Our accountant helps us figure out. It’s boring but necessary.
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I guess I hadn’t realized that the square program will also cover the workers comp. How mcuh does that end up costing you? Have you compared it to just purchasing a workers comp package through an insurance firm?
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