Being an Author is a Business
If you are serious about becoming an author, then you need to be serious about the fact that being an author is also running a business. There are no two ways about it. Check your state, county, and city to see what’s required for your area. Below I have given you just a quick overview of some of the things you need to think about.
Business Entity
Consider consulting an accountant or lawyer to determine how you should structure your business. Are you going to run it as a sole proprietor or limited liability company or some other form? Many authors set up their business as an LLC.
Business License
Check your city or county to see if you need a business license. Most require you to have one to do business EVEN if you are only selling online.
Sales Permit
Check your state for requirements for a sales permit.
In California, you must obtain a seller’s permit if you:
- Are engaged in business in California and
- Intend to sell or lease tangible personal property that would ordinarily be subject to sales tax if sold at retail.
www.cdtfa.ca.gov/taxes-and-fees/faqseller.htm
The requirement to obtain a seller’s permit applies to individuals as well as corporations, partnerships, and limited liability companies. Both wholesalers and retailers must apply for a permit.
If you do not hold a seller’s permit and will make sales during temporary periods, such as Christmas tree sales and rummage sales, you must apply for a temporary seller’s permit. Such permits are normally issued to selling operations lasting no longer than 90 days at one location.
If you go to another state to do an event, you must check the laws of the state to see if you need to file for a temporary sales permit.
Bank Account/Financial Tracking
It is highly recommended that you set up a separate bank account for your business. In some cases, depending on your business entity status, you are required to have a separate account. Also invest in a way to track your business expenses and income – Quickbooks, Excel, and more.
Insurance
Consider purchasing insurance for your business to protect against loss, especially if you store your books and supplies in your own home. Or check to see if your homeowner’s insurance covers you in case of a loss.
If you are required to have insurance for a craft fair, large event, etc. I have used ACT Insurance (Artists, Craftsman, and Tradesmen Insurance) for single events or multi-day events. It’s an affordable peace of mind. (Just an FYI, if you choose to use ACT, I do not receive any compensation from them for mentioning them and providing the link).
