Are You Starting a Candle Business?

For the most part, these steps are easy and relatively painless. But please remember, while I've done my research to bring you this information, none of it is intended to be legal advice. If you've got questions that aren't answered here, it may be worthwhile to hire a lawyer or accountant to help you out.

First Steps

Once you've decided on a unique, evocative name for your candle business, then it's time to register that name. First of all, check the internet to see if someone else is already using that name. You can also have your county or city clerk check that for you. If the name you choose is free and clear, then go ahead and register it so that no-one else can use it. You can do that by going to your state's Secretary of State website and register online, or you can contact your county clerk for the form needed.

What's Next?

This number will allow you to buy your business supplies, candle-making supplies if you make your own, and many items for your business at wholesale prices without paying sales tax. If you plan on buying candles wholesale, most companies require you to have this tax number before you'll be allowed access to the wholesale portion of their website or catalog.

Since you won't be paying tax when you purchase your candles wholesale or buy candle-making supplies, you'll need to collect sales tax when you sell your candles or personally use any of the products that you buy wholesale. To do this, simply multiply your state's sales tax by the cost of your candles. For example, I live in New York state, where we have a 7.0% sales tax. I retail my jar candles for $18.95, so multiplying that by .07 (for 7% sales tax) gives me 1.3265 which I round up to 1.33 - so I add $1.33 to my retail price of $18.95 and get a total of $20.25 as the total price I charge for my candles. Some people like to charge an even amount, say $20, for a candle, so figure their price and sales tax to reflect that. Choose which works best for you.

Having a tax id number means you'll be required to fill out and return quarterly sales tax forms. This needs to be done even if you haven't sold anything in the previous quarter. If you have made sales, then you'll need to include a check for the amount of tax collected. These quarterly forms are short and easy to do once you've done them once or twice.

When you start a candle business, keeping track of all your supplies, business and travel expenses and sales can be very time-consuming and confusing, especially at first. If this is something that is really going to cause you to pull out your hair, I highly recommend hiring the services of a professional accountant or bookkeeper. Try to find one who specializes in home businesses. They know how to save you money by legally reducing your tax burden, and are invaluable for answering any financial or tax-related questions that may pop up throughout the year. It's a huge relief to hand them all of your receipts and records and let them "do their thing!"

And, Finally ...

It's not necessary to set up a "business checking account" specifically. This type of account will incur more fees. Instead just set up a separate checking account in your name - that fulfills all the IRS requirements.

This is where you'll deposit all of your income from your candle business (that's the fun part - what a thrill to deposit your first check from your sales!) and pay all of your business expenses. Since your business finances are separate from your personal finances, it's easy to keep all of your business records and to determine your levels of profit or loss.

So, it's really easy and inexpensive to start a candle business legally and professionally. You'll operate your business much more smoothly and with far fewer worries if you're legal and above-board. But, if you're already operating a candle business without having done all of these steps, it's not too late! Simply follow these guidelines, and you'll be set up and raring to go.

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