5 THINGS YOU NEED TO START ANY CRAFT-BASED BUSINESS – LESSON THREE. LEGAL SET UP.

Sorry about that.

It took me a super duper long time to come and finish this series of blog posts. In part, I had some family stuff going on. But, is it possible that I was reluctant to write part three? Yes. Legal Set Up – gah. (To start at Part One, click here)

If you are looking for a business guru who can walk you through the minefield of creating your own business LEGALLY – then walk right past me. I am not able to advise you on what you need to set up your particularly business, with your unique circumstances and how to do it all legally. What I can to tell you after a few years in this space of craft business is – what I know, what I think you need to know and who to ask for help. *The advice in this post is for UK businesses only.

You feel scared about doing it properly? Me too.

Please don’t forget, literally everyone who ever created their own business – took these first tentative steps. We all felt like an outsider and we were all scared to do it wrong.

Use your common sense. If people are eating your food, if it creates a flame, if it’s specifically for children or if it involves working with customers in person – Google the crap out of it. You are responsible to keep people safe. Ask other people in the business what legalities that should concern you. As I wrote in Step One:“People running businesses don’t like to shortcut the answers for other people – but they do like to help with tales of caution. Listen to them! Make sure you get, real, specific advice on your craft about what legislation and insurance you need. You add these costs onto the costs of the business.”

HMRC and Trading Standards.

They’re not the scary business police – they are there to keep business owners and their customers safe. The more they can help support small businesses to work professionally and legally the better. If you have questions they can help advise. I promise. I can assure you every time I rang HMRC they have been very understanding and patient. You’re not Donald Trump bankrupting all your businesses to avoid paying tax, you’re a small business which they want to encourage. It’s better for the economy. Trading Standards is a must if you have any questions about your business and it’s safety – again, they want to encourage everyone to create legal, quality products. Seek further help for specific industries:

If it’s edible – https://www.food.gov.uk/business-guidance/register-a-food-business
If it’s a candle or similar – http://www.soapmakingmagazine.co.uk/blog/index.php/2019/02/13/clp-legislation-explained/
Making skincare – https://www.ctpa.org.uk/faqs
Toys for children – https://www.gov.uk/guidance/toy-manufacturers-and-their-responsibilities

I can’t say it enough…. Common Sense. Is there a chance it could cause a hazard? Imagine an idiot using your product, what would their potential law suit be? MAKE SURE YOU’RE SUPPORTED. If you are certified, regulated, insured – you will sleep better at night.

Sole Trader or Limited Company?

This series of posts is for micro businesses only. People crafting in their spare rooms. People that aren’t selling anything yet. For 99% of you I would imagine registering as a sole trader is the best thing. This just means you get to submit a tax return on the money you take in (even if you don’t make a profit on it.) At least until you see if there is a profit to be made and a business to set up properly. For more info see here https://www.gov.uk/set-up-sole-trader .

I‘ve only sold one thing for £5 – I don’t need to register that with the government do I?!!
Yes. You really do. It can affect benefits. It’s important that you create a business that gives you confidence, not something to keep secret. If you make under £1000 it’s possible you wont need to submit a tax return – speak to HMRC for their guidance.Do the right thing. They are not scary monsters. I promise.

This is horrible.

I know, here’s a picture of a puppy.

Insurance

This is the last bit of information in my legal set up. I promise. If you can call what I have been typing “information”. I don’t feel I have been very informative, there’s a lot of guidance out there and every business creates something different. If you have any questions please find me on social media to ask – I promise I’ll try and help or signpost for your craft or personal situation.

Business Insurance is a slightly easier subject for me to navigate.

Public Liability Insurance: Will you be at craft fayres? Letting customers visit your home to look at products etc? “Public liability insurance covers the cost of claims made by members of the public for incidents that occur in connection with your business activities”. Most craft fayres, festivals etc. will require you to have a form of insurance for your stall.

Product Liability Insurance: If that idiot from above – the one working out how to use your product in the most irresponsible way, causes themselves harm – you need insurance to protect your life and your home from their lawsuits. It protects you from any claim on the product. “Product liability insurance is a type of business insurance that can cover the cost of compensation claims if someone is injured or their property is damaged by a product that you’ve sold.”

I can highly recommend Mason Insurance Brokers for professional business insurance. http://www.masonib.co.uk/

What’s Next?

Ahh finally, we can move on from this topic onto the fun stuff. How to find your customers, how to keep them.

Find me on social media to get a notification when a new blog is ready. I’m over on Facebook at Maggie Do Design and on Instagram at @maggiedodesign 💖

NB: This post is only for micro businesses – that is people thinking about selling a few t-shirts, frames, or crochet blankets etc. Please do take more structured advice for larger craft based businesses. Starting up small and simple doesn’t mean you can’t grow bigger – but different advice will apply when you get there.