How did you know it was time to setup a home business to build rods. So far I've done more repairs and re-guides on rods. A Rockey Mountain local fishing show has seen this work and wants some custom rods, and potentially wants to promote them. So how did you know it was time to get the business license?

When you feel you can devote 100% of your time and make a living from it.
Paul

Paul@soonercustomrod.com

When you're ready to deal with the monthly paperwork (you should be doing some of that already) and the hassles of running an official business weighed against the amount of business you feel you can or are willing to generate.

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With the current state of the economy, now is the time. If you are prepared to eat beanie weenies for a littlw while.
I say this because, right now people want more for their money and as a small business you can provide a level of customer service that no big box store can. If you know your product, your customer base and are business savey give it a go. Find a GOOD accountant, H&R Block is fine for your run of the mill taxes but when you start talking about a business, personall attention is wonderful.
Now that I've said that, I staretd small just 2-3 rods a month. I know that's just a hobby but it's grown to where I barely have time to fish on the weekends.

when you dont want a life outside your rod shop (days nites and weekends)

IMO, the correct answer is ... as soon as you have tax liability. In Florida, we have to assess sales tax on repair work - not just new builds. In addition, as soon as you build a rod from scratch for any client - Federal Excise Tax is due. My business was established once I no longer wanted to restrict myself to working FOR a shop (under their business entity, with me as a contractor receiving a 1099-MISC).

So really there is no way to even build a rod for a friend if that is the case, Jim?

If you charge him, or are compensated in any way, then you owe the excise tax, your state sales tax and any positive income should be reported on your yearly 1040 form.

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As a hobby builder, if I was to setup a booth at a craft show and sell a rod, is there a way to submit the form 720 without a business license(I have not seen the form).

The IRS really doesn't care about your local business license. They do insist that every rod manufactured and sold has the tax collected and paid on it.

There is an article on the tax in the online library here.

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Thanks Tom, I've read the article and searched the forums for those really long posts on the subject, I've only built 4 new rods since I started, the rest have been simple repairs and re-wrapping new guides. I will make sure that the IRS gets theirs. I'm only building, or re-wrapping two rods a month, was not sure if it was worth it now to start a home biz.

Just my 2 cents Andrew...and it is just a little food for thought. A friend and I were fishing and talking building rods. My friend is a 35 year custom glass sculpturer/craftsman. Not blowing glass. Actually using the glass rods to melt down and be creative with it. He used to also have a custom rod building business but it grew to where it affected his glass work and so he stopped building rods. As we chatted he said do not start a rod building business thinking it is just going to be a hobby. Be prepared to put in long days and work your butt off. His comment at the time was that the custom rod building business is wide open. Apparently the demand is out there. I don't really know this...but I trust my friends comments to the nth degree. He is an awesome fly tier, rod builder, and fly fisherman as well as his custom glass work. And...since he has been making a living at his glass work for 35 years...and had a rod business...makes his living with a small business.....he knows a lot about it.

Sorry. I seem to have great difficulty with ten words or less. I would be glad provide his name and contact number or email if you wish. I would contact him first before giving out his number but he is easily reachable via an aol email id.

Good Luck with your decision and future. I am too old and though there would be some pride in having my own custom rods...I have not enjoyed life that much over the years....and do not want to be tied down to a business. It's time for me to do only what I want to do. Go fishing, and fool around with rod building. I do this because just by nature I think outside the box. Therefore I am always trying new things in building rods. I am a tinker bell...but would hate to have that as a handle on a board...although it would be fitting.

Jim
I wish you a good ride through life.

Having a home business of any kind is very demanding. You will be "Self-unemployed". That means you will wear all the different hats at some time or the other. The good news is you only have to work half a day!! But you decide which 12 hours you will work -- every day -- including the week ends. You will probably lose some of your fishing time, too. You will also be giving up almost all benefits of employment, like health insurance, etc. All in all it is a real ball and chain. But it can be very rewarding if you are good at what you do and are willing to spend the time developing a good reputation. Good Luck!
Bill

All good advice. I own a couple businesses, so doing the paperwork, and tax issues are part of the deal. If you only build a couple rods, not worth the business issues. with the business issues, you have to keep records for all expenses, of course record sales, and pay taxes if there is an income. If you do it as a business part time, or full time, this is what you must do, to take advantage of the expense writeoffs, you must report the sales and income. It cannot go both ways. Otherwise it is a hobby, where you cannot write off expenses. As Tom said, if you build and sell a rod, you must pay the excise tax. That is no big deal, but just remember that if you start, there are some issues this will also make a reality. They will want a report each quarter, or once a year. I always bounce things off my accountant and tax guy. He knows the issues. ask yours, there are some deductions you can use if you work at home.
If you give the rods away as gifts, no tax due. But it looks bad is all od a suddeen you give 20 rods away! It boils down to the fact, if you build and sell enough, want to open wholesale accounts with suppliers, do repairs for charge, well, you should create a business and start keeping records and file. Not much inbetween ground here. It is kinda 1 way or the other. Your decision.
We also own a small lure co., so we can flow the expenses through the same way. The difference is the excise tax. Ours runs $10 per rod, just keep track and file. The customer pays, you collect, file, and pay the IRS. It is just 1 more of several things we have to keep track of and pay!
Kyle Robinson

Thank you all for your answers, I'm staying a hobby builder for the time being, but in a few years I may start it up and setup a shop.

Andrew...

Make sure your "comm/IT" Gods at your base don't see your address next to your name....they will flip!

Just a word of advice....