4 ms·
Why you are not afraid: you make enough money to hire experts to shield you from making any business and tax mistakes. An emerging hobby business makes enough
by dosman33 4y ago
Why you are not afraid: you make enough money to hire experts to shield you from making any business and tax mistakes.
An emerging hobby business makes enough money to warrant hiring some VERY limited services, but not enough money to hire a book keeper, a CPA, and any other services that a "real business" needs.
I converted a side-hustle into a "real business" that paid taxes for several years. It's not super hard to start a business as a beginner but you've got some hurdles to clear, more-so if you are selling durable goods as opposed to "apps". I made one single mistake while conducting out-of-state commerce that cost me thousands of dollars in one fell swoop: that was more than all the cash the business had on-hand. I had registered to do business in the other state and was trying to dot my i's and cross my t's and be above board, but the mistake was till mine though. I could have spent those same thousands of dollars to hire experts over the same course of time preventing all the wasted money, lost time, and headaches but my business would have made so little profit it would have nullified the reason to be in business as a real tax-paying business.
Along the way I began to see various things as "cost of doing business" which was useful. I was glad to have the experience, I reinvested heavily into the business to save myself time and effort. But I never made enough money to hire others to do anything that I could do myself. The "cost of doing business" part only works if you have regular positive cash flow too.
So again, you are trying to serve hobby businesses who are not profitable enough to warrant them hiring experts to dot their i's and cross their t's for them. They are correct to be afraid of lightly stepping into this world and you won't change that.
- moomoo11 4y agoI only know how to make apps thus far at least as far building any products is concerned. I’m curious if you can enlighten me how it works with apps. If I’m living and based in California and I launch an app that people/biz can pay for anywhere in the world, how does that work? If someone in Mew York buys a module on my app is that considered out of state commerce?
- londons_explore 4y agoEvery state and country has different laws. If you're doing things properly, you shouldn't start selling your product in a state or country till you have checked your product meets all the laws there and registered a business entity able to sell there. Then, you will need to submit taxes to that country, and in some cases even have an office there.
- tpetry 4y agoAns as all of that is really complicated I suggest everyone to partner with a "Merchant of Record" (MoR) like paddle.com and some more. Basically you are not selling your app or service anymore, paddle.com is doing that. They are doing all these complicated things (globally!) and pay you the price minus some percent, totally worth it.