Getting Down to Business
Opening a dog-grooming business, regardless of whether it's in your home or in a shop at one of the local strip malls, means that you must take care of some legal matters, such as choosing just how you want to operate your business.
Choosing how to set up your business
You must choose between three ways that you can operate as a professional groomer. You can do business as a sole proprietor, as an incorporated entity, or as a limited liability company. All three have advantages and disadvantages.
Before you embark on any business endeavor, however, you need to seek the advice of an accountant or perhaps even an attorney who is familiar with setting up businesses.
Stepping out on your own as a sole proprietor
A sole proprietorship is the easiest way to start a business, but it's also the most risky. In essence, you hang out your shingle and get paid by customers. The money you make is yours to keep, and you don't have to mess with separate tax identification numbers and whatnot. What could be easier? Well, read on.
(V\NG/ The downside to opening for business as a sole proprietorship is that anything that you do wrong can make your personal assets (the house, the car) vulnerable. Lawsuits will be aimed directly at you and not against an entity like a corporation.
Big business: Incorporating
The second way you can operate your grooming business is as a corporation. Various types of corporations exist, but for the moment, I'll discuss the S Corporation. Many small businesses are S Corporations, because operating as one provides good protection, and the business entity can be sold, if need be.
The downside to incorporating is contending with the paperwork and the number of hoops you must jump through to get one started. Keep in mind that some types of corporations can be taxed more than individuals, so be sure that you talk to your accountant before deciding whether and how to incorporate.
The limited liability company
A fairly new way of doing business, the limited liability company (LLC) blends together parts of doing business as a corporation and as a sole proprietor. An LLC enables one or two people to operate a business like a sole proprietorship in some ways and like a corporation in others. However, because not all states recognize LLCs and not all LLCs are the same, be sure to talk to someone who's experienced at setting one up before you decide to take this route with your grooming business.
Creating a business plan
When you start thinking about operating a business, you need to put together a business plan. All successful businesses have one, and even a vague plan is better than no plan at all. By putting down where you want to go and choosing the methods you'll use to get there, you'll be ahead of your competition.
For example, your business plan needs to specify what type of grooming business you want to open. It needs to say whether you're operating:
1 A home-based business where you groom out of your home. 1 A standalone grooming business usually with only one groomer. 1 A small to medium business with employees who groom. 1 A mobile grooming business.
1 A business adjacent to a veterinarian, training facility, boarding kennels, or pet supply store.
Think about which type of grooming business you'd like and determine whether you'd like to offer other services, such as training, boarding, or supplies. The clearer you are about what your business will be, the more successful you're likely to be.
An accountant can help you formulate a business plan, or check out Business Plans For Dummies by Paul Tiffany and Steven D. Peterson (Wiley) for more information.
Securing licensing
Currently none of the 50 states in the United States require groomers to be licensed. In fact, anyone can become a professional groomer as long as he or she fills out the right forms. It's as simple as opening up a shop and hanging out a sign.
Depending on the type of business you choose to operate (see the earlier section on "Choosing how to set up your business"), you'll have to fill out the appropriate business forms, and if your state requires service and sales-tax licenses, you'll have to apply for them. Beyond that, you may want to check with your state government to find out about any requirements to which professionals who work with animal professionals must adhere.
Paying taxes
One downside of working for yourself is that you must pay your own taxes rather than having your employer withhold them for you. So you need to get in touch with an accountant who can explain quarterly tax filings and payments and provide other information about dealing with the IRS.
Now that you're self-employed, your social security tax (FICA) is twice the amount you paid before. Why is that? Because before you were self-employed, your employer paid the same amount you did. When you become self-employed, you get hit with the entire tax.
Post a comment