I’m an Artrepreneur. When Do I Need a Business License?

As an artist, you probably don’t have a ton of experience with the legal side of business. In fact, one of the most common questions I hear from clients is: When do I need a business license?

So let’s talk about business licensing.

A business license is a registration with your state, county, and/or city that allows you to conduct business in that area; it allows you to legally exchange goods/services for money. So, it’s a good idea to obtain your business license before you exchange your product or service for cash for the first time.

Seems easy enough, right? But we can’t forget that there are multiple kinds of business licenses. To fully prepare you for obtaining your business license, let’s talk about the following:

NOTE: Business licensing varies from state to state, but the following information is generally the same no matter where you live. For more detailed information regarding special rules in your state, reach out to your local Small Business Development Center!

Sole Proprietorship / General Partnership

Becoming licensed as a sole proprietor or general partnership might be a good fit for your creative business early on. As a sole prop, you ARE your business. Generally, your business license will be registered under your name, and you can obtain a DBA (see below) in order to operate under another name. Come tax season, all your income is taxed as personal income. In this scenario, there is no separation between yourself and your business. Most independent contractors and freelancers file for this kind of business license. In Nevada, you might expect to pay about $225 for your initial registration.

Limited Liability Company (LLC)

A Limited Liability Company gives you a bit of separation between yourself and your company. In this case, you’re creating a separate business that is strongly connected to you, the owner. In order to maintain separation, all your business finances must be separate from your personal finances. Otherwise, you could still be held liable on the company’s behalf. What’s special about an LLC is that, come tax time, you will have two filing options: 1) You can be taxed as a general partnership and count all your profits as personal income–they will be taxed accordingly. 2) You can be taxed as a S-Corp, allowing you to take your own salary, then have the leftover profits taxed as earned income. Each taxing structure is different and will give you a different net profit after taxes are removed. I usually recommend that clients don’t file their taxes as an S-Corp until they’re making at least $75k a year. Consult with your tax person to learn more and find out which option is best for you. To file for an LLC in Nevada, you might expect to pay $425 for your initial registration.

NOTE: An LLC is a cool hybrid that gives you flexibility come tax time. But remember, you must keep all finances and operations separate from your personal life in order to avoid liability in the case of a lawsuit.

C-Corporation

When you file as a Corporation, you are creating a legal entity that is entirely separate from yourself. It acts, and can be prosecuted, on its own. This means that you are (usually) completely protected from liability should the company be sued. However, Corporations must have their own Board of Directors and are often run in the interest of the shareholders, which isn’t always just you. Filing as a Corporation gives you the most protection, but can also reduce the amount of control you have over your creative business. In Nevada, you might expect to pay about $700 for your initial registration.

(Non-Profit)
If you’re interested in becoming a non-profit organization, you must first become a C-Corporation, and then file additional paperwork in order to obtain non-profit status. When thinking about becoming a non-profit, you must think about your potential revenue streams. If your most likely revenue streams are grants and donations, then becoming a non-profit might be a good fit for you.

Don’t Forget

EIN (Employer Identification Number)
After filing for a business license, you must register your business with the IRS. You will receive an EIN to help you identify your business when you file federal taxes at the end of the year.

State Tax Registration
You must also register with your state tax agency. Most states have an online portal where you can create an account and pay your taxes digitally. State taxes are generally paid quarterly, so make sure to stay up-to-date to avoid unnecessary fees.

Doing Business As (DBA) aka Fictitious Firm Name
Some businesses file their business license under one name (i.e. Kayla’s Business) but want to operate under a different name (i.e. Kayla’s Super Awesome Business). If this applies to you, you’ll want to file for a DBA with your county. DBA’s usually cost about $25.

Special Licensing
Depending on your type of business, you may need to file for additional licenses and/or permits (such as liquor licenses or cabaret licenses). Reach out to your local licensing office, or your local Small Business Development Center, if you think you might require additional licensing.

Remember: Licenses are generally renewed every year, so don’t file for your state business license until you’re truly ready to start conducting business. Practice truth and evaluate your business model realistically… is your creative business ready for launch?

What other questions do you have about the legality of starting your own art-based business? Drop them in the comments below! And don’t forget to follow Artrepreneurship – where ‘art’ and ‘entrepreneurship’ meet to get helpful content sent straight to your inbox.

Peace, Kayla

NOTE: I am not an attorney. This article is educational, and therefore not meant to provide legal advice.

Tips for Naming Your Art-Based Business

Naming your business is an important step in developing a recognizable art-based brand. Here are some tips to help you find the “perfect” name!

1. Be clear about the product or service you offer

Every see or hear a business name and have no idea what the company actually does? Be careful with creating a name that is hard to directly relate to your business. Many artrepreneurs choose a descriptor word that follows the core business name to help give customers a hint about what they do. For example: Creations Film or John Doe Design. Others select names that play on the product or service provided. For example: The Sound Station or Artist’s Cafe.

2. Reflect your brand

In this article, we talked about building a brand around your art that acts as the core to your business image. Keep your brand in mind when developing a business name. Does your proposed name fit with the messaging style that you’ve decided on?

Some artrepreneurs name their business first, and then build their brand around that name. This is a slippery slope that can cause you to lose sight of the value you’re trying to offer. Instead, think about the value you’re providing your customers and how your business name can help to enforce it.

3. Be original, but easy to remember (and even familiar)

Originality is often praised in artrepreneurship, but Derek Thompson, author of the book Hit Makers, makes the argument that originality on its own is not king. People are more drawn to things that feel original AND familiar. Familiarity makes a business name easier to remember and creates a positive feeling in the hearts of consumers. So when naming your business, think about names that are somewhat original, and somewhat familiar or recognizable. This meet-in-the-middle method will help you create a business name that is preferred by most consumers.

4. Do your research

So you’ve gone through tips #1-3 and think you’ve found the perfect name for your business. Before you get too attached, make sure you do your research to confirm that the name is not already in use. There are 4 main places you’ll want to visit:

Google

A simple Google search can tell you right away if your potential business name is already in use. Is there another business or blog that floods your search results? If so, you’re going to have a hard time getting to the front page of Google, and a harder time becoming the very first search result that people will see. Check out what already exists online so that you can get an idea of the plausibility of your new business name.

NameCheckr.com

If you don’t see any competing online presences that might threaten the success of your new business name, it’s time to check out NameCheckr.com. This site allows you to simultaneously check all top-level domains and social media sites for your preferred business name. For example: You might want to name your business: Artist’s Cafe. On NameCheckr.com, you can see if that name is available for a .com domain, and as a username on Instagram, Facebook, and Twitter. Using this kind of resource helps you to think about name consistency across your many digital presences.

USPTO

The United States Patent and Trademark Office should be your next stop. Here, you can search all trademarks to understand if your potential business name has already been trademarked. You can search all US trademarks here (search for “Basic Word Marks”).

NOTE: Trademarks rely much on the “Likelihood of Confusion.” If your trademark is too similar to another in your same goods or services category, you may get denied. However, let’s say there is another “Artist’s Cafe,” but the associated goods and services category is Clothing. Since you want to open a Coffee Shop, this other trademark will not be a problem, because it exists in a completely different industry.
But, if there is a trademark registered for “Artist Cafe” in the Coffee Shop industry, you might have a problem. “Artist’s Cafe” and “Artist Cafe” are too similar, and are considered to have a high likelihood of confusion for consumers–so you will most likely be denied a trademark under that name.

State Business Entity Search

The last place you’ll need to visit to confirm the eligibility for your potential business name is your state’s business entity search portal. This search engine will populate any competing business names in your state. If another business has already filed a business license under your potential name, you’ll need to choose another. To find your state’s business name entity search, go to Google and type in: ‘Your state’ business entity search.

Here are the Business Entity Search Portals for both Nevada and Oregon:
Nevada Business Entity Search Portal
Oregon Business Entity Search


Naming your business is one part heart and one (large) part strategy. Work through tips #1-4 as you develop the right business name for your art-based business! Remember: There is no formula for developing the perfect business name, so don’t drive yourself crazy trying to find the perfect one. Once you find a name that checks off tips #1-4, stick with it and get started on building your very own creative business!

Follow Artrepreneurship – where ‘art’ and ‘entrepreneurship’ meet to get more straight-to-the-point information that will make your artrepreneurial journey easier!

Peace, Kayla

Artrepreneur Caitlin McCarty Shares Her 3 Main Tips for Artists Turned Entrepreneurs

VLOG: Want to create your own art-based business? The importance of learning from real artrepreneurs cannot be overlooked. Caitlin McCarty, Founder and Artistic Director of contemporary dance company Collateral & Co., is here to share her top 3 tips for all artrepreneurs!


Don’t have time to watch? Here’s a RECAP:

1. Don’t be afraid to ask for what you want.

“The worst they can say, is no.” Ask others for what you want and need–you’ll be surprised at how willing they might be to help. But remember, don’t just think about WHAT you want–think about the HOW behind implementing what you want.

2. Use your contacts to make more contacts.

“Someone you know probably knows that person.” Take advantage of your network. Each member in your network has a network of their own. Your contacts will be able to help you make new contacts. Like #1, don’t be afraid to ask those in your network if they know anyone who… or if they know a contact at… You’ll be surprised at how quickly your network will grow when you use your existing contacts to make new contacts!

3. Be consistent.

#1 and #2 are more likely to work in your favor when you are consistent in what you do. Be consistent in:
– Creating and delivering your product or service
– Building and maintaining relationships
– Branding yourself and your creative business

Caitlin writes about how to startup, market, and manage your own business. Check her website out here:
Creatively bringing your goals to life | https://caitlinmccarty.com/

If there are additional topics you’d like to hear about from real artrepreneurs, leave a comment below!

Peace, Kayla