# The business end of things



## VickiLynne (Feb 8, 2008)

First, I want to thank all of you for all of the wonderful knowledge and encouragement you have given me on this forum. I have been making soap for 18 months and just giving it to family and friends with great reviews. So, with that said, I would like to expand in 2010 to selling it. Being that it is January, I would like to know what kinds of things I should be keeping and recording for tax purposes. Do you all have business plans, accounting methods, sole proprietorships, LLC, etc. I want to do this correctly from the beginning. Any and all help is appreciated. I guess I should say that I'm on a tight budget, so as much of this I can do myself I would prefer that.

Vicki in NC


----------



## Aja-Sammati (Oct 26, 2007)

I wish I had gone to an accountant before I started...I know that sounds expensive, but it would have helped me a lot knowing what they would want from me later! Eventhough I did all my own accounting when I ran a day care for 4 years, I would rather pay someone now to do some of it...how much you want to do yourself is a learning process. The thing I am worst at is keeping track of mileage...


----------



## Caprine Beings (Sep 19, 2008)

Every receipt and every sale is to be recorded. Where you get your milk, your lye, your oils, scents, packaging, labeling, shipping costs, hardware (ie.pots, blenders, molds and such), advertizing, colorants, milage, table fees, rate of hourly pay. Was that everything? Probably missed eight to fifteen things.
Tam


----------



## VickiLynne (Feb 8, 2008)

Thank you all for your input.

Vicki in NC


----------



## Guest (Jan 9, 2010)

Check with your local county and get a DBA (doing business as) check with your state to find out if you must pay taxes on the items you sell.. and yes keep every single receipt and keep mileage that you travel for business expenses.. with IRS you are allowed some of your household expenses as business expenses.. for example if you use a spare bedroom for nothing but soap storage then that room is allowed and most accountants or tax software programs show you how to do this.. the electricity used in that room.. Remember there are no house police to check on this also.. 
You are allowed to deduct many many things including vehicle expenses for amt of miles you traveled while working etc.. there are booklets with IRS that you can send for that will list many of these.. 

Barb


----------



## VickiLynne (Feb 8, 2008)

Thank you Barbara, I will check that out.

Vicki in NC


----------



## jimandpj (Mar 11, 2008)

If you choose to do a sole proprietorship your first year (what we did), then google "Schedule C" and print it. That will list the expenses that you can deduct. Keep track of everything throughout the year under those categories and it will make things so much simpler at tax time. You can easily do it on a spreadsheet if you don't have quickbooks or another program.

Search for a good accountant - talk to everyone and ask them what they think of their accountant. Find out how aggressive they are about legally saving you money. Have initial meetings with each one and pick their brains - that is usually free. I learned a lot that way until I finally found a good accountant.

But if money is tight, you can do your own taxes pretty easily as a sole proprietorship with software. If you go online to www.turbotax.com, you can go through their business version (it's free until you choose to print your tax returns) and you can see what questions they ask and what they look for. That can help you think ahead and know what to track.

PJ


----------



## Kalne (Oct 25, 2007)

How many of you do this as a separate business from your farm?


----------



## Aja-Sammati (Oct 26, 2007)

My farm is separate from my soap. Both have the same name, but separate books. Soap so far has profits every year...three years ago, when we moved, the farm lost a little over 9 grand.


----------



## jimandpj (Mar 11, 2008)

Our goats and farm supplies are all treated as assets and expenses for the soap business.

PJ


----------



## NubianSoaps.com (Oct 26, 2007)

I also do as PJ. And make sure the info you are getting is for your state, for myself alot of what some do is meaningless here in Texas. Getting a DBA is a must because you simply will have to take checks if you get into stores which you want. Once you are doing it awhile getting your tax ID number or here employee ID number takes you that one more step to make more profit off each bar. On the farm using your schedule F to keep records and your C for your soap also helps you know how much to charge for your soap. I don't know how anyone sells some of the more expensive EO bars they do for $1 an ounce, there simply would be no profit in it for me unless I purchased the EO in 33 pound lots, which I would never use in years. So find out for yourself, the longer you soap the faster you get which saves you labor time, then the larger the batch the less labor, then the larger the raw product purchases the more money because you aren't writing as many checks, printing as many paypal recipets and spending time reordering, which is the biggest waste of time I had last year.

Figure a business plan and my biggest help was my daughters fried who just got out of college, she made me a spread sheet (I print it out since I like to have hard copies) and my plan of increasing sales by $5,000 each year was exceeded this year to $9,000...it shows you what direction you are going in and what helped and what didn't. More stores are my goal this year, but only certain types of stores. Vicki


----------

