Starting a small business

You can basically open one for anything, except maybe things like gambling dens or some other niche businesses that aren't really common... the whole list of permitted activities is pretty much wide open to you. Of course, you'd just need to meet the professional requirements yourself or hire someone who holds the right certifications for certain jobs

There’s a massive amount of freelance work out there that doesn't require any kind of formal certification or master's license. Marketing agencies are right in the thick of it—you can practically find a way to categorize anything under that umbrella if you try hard enough.

dejoo said:Can I start a small business that covers everything? Like, not just the old-school trades like blacksmithing, carpentry, or hair styling, but maybe something tech-related... like computers...

Hi there,
could you clarify which specific area you're looking into?
For the categories listed below, there aren't any special licensing requirements; they fall under general small business services and are all software-related.

Best regards,
Amazon

72.2 Software Consulting and Procurement
72.21 Software Distribution
72.21.0 Software Distribution

This category includes:

- developing, creating, sourcing, and documenting ready-to-use standard software support.

72.22 Other Software Consulting and Procurement
72.22.0 Other Software Consulting and Procurement

This category includes:
- system analysis, design, and programming for ready-to-use systems:
- analyzing user needs and pain points to provide optimal solutions
- developing, creating, sourcing, and documenting custom software based on client requests
- writing code according to client specifications
- website creation.

This category excludes:
- mass duplication of standard software (see 22.33.0)
- providing advice regarding computer hardware (see 72.10.0).

72.3 Data Processing
72.30 Data Processing
72.30.0 Data Processing

This category includes:
- database-related activities: providing data to users in specific formats or sequences via direct search or access (computerized management) upon request
- data processing using either client software or proprietary software:
- end-to-end data processing
- data entry services
- document scanning
- managing and operating third-party data processing equipment on a regular basis
- web server services.

72.4 Database Creation and Management
72.40 Database Creation and Management
72.40.0 Database Creation and Management

This category includes:
- distributing data through direct online database access
- publishing directories and address books via direct online access
- publishing other types of information through direct online access
- web search portals.

This category excludes:
- internet-based distribution tied to other publishing sectors (see 22).
72.6 Other Computer-Related Services
72.60 Other Computer-Related Services
72.60.0 Other Computer-Related Services

If I start my own small business or go freelance, am I required to register myself or someone else as an employee? Or can I just run it as a "sole proprietorship with no employees" and just pay taxes based on whatever income I actually bring in?

Kyle Williams11 said:If I start my own small business or work as a freelancer, do I have to register myself or someone else as an employee? Or can I just operate as a solo practitioner and pay taxes based on what I actually earn?

Try asking here:

http://www.google.com/

So, let's say I decide to actually pull the trigger and start my own small business—basically just hiring myself as a contractor. Aside from the obvious stuff I’d have to pay out for my own paycheck and those inevitable payroll taxes, what does it actually cost to keep the lights on? I mean, are there constant monthly fees, various state levies, or some other random tribute I have to send to the government just for existing? And while we're at it, how does corporate income tax even work? Like, if I finish a job, send over an invoice, and finally get paid... how much of that check is the IRS just going to snatch away immediately?

Sarah Barrett6 said:So, let's say I start my own small business and basically just employ myself. Aside from the obvious stuff—my salary and the payroll taxes—what does it actually cost to keep the lights on? Like, am I looking at monthly taxes, fees, or some kind of government tribute? Also, how does income tax work? If I finish a job, send an invoice, and get paid... how much of that check does Uncle Sam grab?

If you launch a sole proprietorship, you're usually exempt from Chamber of Commerce dues for the first year.

When you register your business, you have to tell the IRS your projected income. Based on that, they’ll send you a bill for estimated quarterly tax payments.
You'll also get a bill from City Hall for local business fees based on what you expect to make, though they usually double-check those numbers after you've been running for about three months.

Since you're operating as a sole proprietor, you aren't subject to corporate income tax—you deal with individual income tax instead—unless you hit certain thresholds or decide to incorporate on purpose.

As long as your gross revenue stays under $28333, you don't have to worry about sales tax; the government doesn't take a cut of that and you aren't required to collect it (but keep in mind, you can't claim any input credits either. To put it simply, sales tax and all its headaches won't touch you until you're pulling in more than $28333).

Basically, every month you'll be paying those estimated income tax installments to the IRS and your local fees to City Hall.
Then, at the end of the year, you've got to settle up:
The final income tax based on your tax bracket, which looks like this:
Once you figure out your taxable income (that's total revenue minus business expenses), you subtract the standard deduction, which is currently $6400 (this goes up if you have dependents, and obviously if you aren't already working a full-time job elsewhere). On whatever is left, you pay:
15% on amounts up to $12800
25% on the range from 38401-$19200
35% on anything over 57601-$57600
+ state taxes (depending on which state you call home)

You take that total tax owed and subtract what you already paid in estimated payments; that leftover amount is what you owe.
On top of that, you're on the hook for local municipal fees, which vary depending on your industry, where you're located, and how much you actually earned and paid in estimates throughout the year.

So, bottom line:
In year one, you'll be paying monthly estimated taxes and your local City Hall fees. Then at year-end, you pay the difference for both.
Starting in year two, you'll be paying estimated taxes, City Hall fees, AND Chamber of Commerce dues every month, plus settling up any remaining balances at the end of the year.

Cheers :-)

Unknown! 🙂)

Hannah Allen58, I cannot thank you enough! As you can clearly see, your handle is incredibly fitting for this particular thread—you’re the only one who actually bothered to reply in several days!

Thanks again for such an exhaustive response! 🙂

Anyone know what I’m looking at if I want to open a grocery store selling perishables? Like, what kind of space requirements am I dealing with, and what exams do I actually have to pass? I don't have a background in retail, so I'm pretty much starting from scratch here.

So, I’m currently working a full-time job, but I’ve been thinking about starting my own little side business to bring in some extra cash. How does the whole tax thing work in this situation? Specifically, what happens with things like Social Security and Medicare contributions? Do I even have to worry about those if they’re already being deducted from my regular paycheck at my main job?

Under Section 3, Subsection 2 of the Small Business Act, there isn't some massive legal wall preventing an employee from starting their own small business. Essentially, a full-time worker can run their own shop provided they meet the specific professional qualifications required by the Small Business Administration regulations on preferential treatment, or they simply hire someone who actually knows what they're doing.

Now, looking at Section 4, Subsection 2 of the Small Business Act, it’s laid out that working for your own business still counts toward your employment rights—meaning you're still entitled to things like Social Security and health insurance. If you're juggling a W-2 job while running a side business, you're essentially double-dipping into the system; you have to cover your Social Security and health insurance obligations both as an employee and as a business owner under the Social Security Act. This means you're on the hook for those mandatory contributions, which covers both retirement and medical, all according to the Social Security Administration regulations regarding contribution bases.

Following the Social Security Act amendments, the rules shifted so that these contributions are based on what you actually earn, as reported on your annual income tax filing—which was a huge change because, previously, the law forced small business owners to pay a flat rate regardless of whether they were actually making money or just scraping by.

Since I am currently a student and my university doesn't offer any part-time or flexible degree tracks, I was wondering if there are any specific student protections or benefits I might forfeit if I decide to launch my own small business?
Also, is there a way to avoid those heavy self-employment tax contributions if the business is technically registered under the name of someone who is already a full-time employee elsewhere? I came across this note stating, "If you are already employed and then open a small business, you only pay social security and healthcare taxes based on your actual net earnings from the business." Could someone perhaps provide a bit more clarity on how that works in practice?
Lastly, taking all these variables into account, what would be a realistic estimate for my monthly overhead and expenses?

@Rebecca Booth12 Thanks so much!
@media_boy Honestly, I don't know what I would have done without you; I probably would have just been left scratching my head trying to figure it out all by myself.
My sincere thanks to everyone!

Is it actually legal to start my own side hustle if I’m already pulling a 9-to-5 at another company?

True enough.
But you have to account for the fact that you’re footing the bill for your own payroll taxes, health insurance, and social security—essentially everything an employer would typically cover for you. On top of that, you’ve got those extra levies and miscellaneous fees that seem to pop up out of nowhere.
And let’s be realistic: just because you’re paying these additional taxes and contributions doesn't mean you're actually going to see better healthcare or a more substantial retirement fund down the line. It’s often just money vanishing into a black hole.
If you’ve managed to run the numbers and you have a solid survival plan—meaning you can actually afford to hand over all those tax dollars to the government while you're grinding through those first couple of years of building a business—then sure, it might eventually pay off.

I see a lot of questions popping up about running a small business, so I figured I'd start a thread where we can swap stories, ask questions, and help each other out.
As someone running my own shop, the biggest headache is being forced to pay dues to Deloitte—it’s a massive annual bill, plus extra based on what I pull in, yet I have zero clue what they actually provide in return. I walked into one of their regional offices once, and honestly, all I saw were people sitting comfortably in high-end leather armchairs. It makes me wonder if these organizations even serve a purpose anymore, or if they're just another layer of bureaucracy acting like the government.

Hey there!
I just have one quick question.
I'm planning on starting my own small business, and I was wondering if anyone could give me an idea of how much cash I should set aside annually to cover all those federal taxes and fees? From what I've heard, the total amount can end up being quite overwhelming...
I'm just looking for a rough ballpark figure.
thanks

man $600 a month just to cover social security, pension funds, workers' comp, plus those self-employment taxes and prepayments... I think I haven't even forgotten everything yet 😁

I’m looking to set up a small business selling fruits and vegetables—basically, I want my main office located right here in my home city, but I plan on actually doing the seasonal trading out in another town. I’d love to get things rolling by June 1st, 2007.
Where on earth should I go to find some solid advice on this, and honestly, what kind of price tag am I looking at? I'm a bit lost on whether this would fall under a standard retail shop setup, a mobile vending license, or something else entirely... plus, there's the whole headache of managing the paperwork and whatnot.

Jonathan Alvarez3 said:I’m looking to set up a small business selling fruits and vegetables—basically, I want my main office located right here in my home city, but I plan on actually doing the seasonal trading out in another town. I’d love to get things rolling by June 1st, 2007.
Where on earth should I go to find some solid advice on this, and honestly, what kind of price tag am I looking at? I'm a bit lost on whether this would fall under a standard retail shop setup, a mobile vending license, or something else entirely... plus, there's the whole headache of managing the paperwork and whatnot.

Someone might know more, but if I were you, I’d head straight to the local municipal office or the county clerk's office—not entirely sure which. You could also try a local branch of the Chamber of Commerce; they usually handle this stuff. My guess is it'll fall under a standard retail sole proprietorship.