The Rise of DIY Businesses and What You Need to Consider Before Starting

Thanks to apps like Pinterest, Facebook, and TikTok, more and more people are stepping out into different areas of the DIY business. Anything from making customized cups, to engraving on wood, and creating lotions and soaps at home is on the rise. While at first glance, it might seem simple to get started, there are some things you should think about before you go full-on. Starting a DIY business may seem simple enough, but there are vital legal considerations that your state might employ.

Making Your Business Legal

While it’s perfectly legal to run a business in most states as a sole proprietor, it gets tricky when you combine your business and personal expenses and income in one place. Additionally, some places require you to have a legit business license before you can operate. Check with your state to be sure you don’t need to register as a sole proprietor or start an LLC before you get going. While selling to family and friends is perfectly fine in most cases, making your business legal with the state does have benefits.  

Protecting Your Assets

Think about all the disclaimers on the products you buy. They are there for a reason. When it comes to furniture, for instance, you want to be sure you use sealants and paints that aren’t toxic. Things that contain lead for instance can cause brain damage and defects to children and babies. Additionally, if someone is ever injured by your piece of furniture it can get you into legal hot water even if it wasn’t due to your negligence.

Some of the ways to protect your assets include showing that you did your due diligence. Making baby products, including clothing may require you to consider parts that could cause choking or strangulation. Creating soaps and beauty products may require you to perform makeup testing to prove that there are no harmful ingredients and that it doesn’t cause skin irritation. Additionally, buying liability insurance can help shield your personal assets if there ever was any litigation.

Payment Processing and Taxes

Running a business means that you’ll need to file all the required documentation each year your business is in operation. This includes any income you receive through third-party credit card vendors like PayPal, Square, and Cash App. New IRS rules mean that anything over $600 that you make may be taxable income. If you’ve set up your business in a legit way, this also means you can claim any expenses that you used for your business. So, when you purchase your website, pay for your domain name, want to get back credit card fees, or other similar transactions, these can typically be claimed if they were used for your business.

How Will You Scale Up?

Starting a DIY business means that you’re probably the one doing everything. This is fine when you’re small and only selling a handful of things a week. But what happens when you start getting orders of over 1000 pieces each week? How will you handle scaling up? Think about training people to work for you part-time. This can not only give them an income, but it provides you with the opportunity you need to consider new ways to grow if that’s what you want.

In considering how you want to scale and grow your DIY business, you’ll need to look at the different marketing methods that are available. If word of mouth is working for you, then stick with it. But if you want to break into a new market or you need more consistent cash flow, you can do this by marketing to people where they are. If your target audience is on Tik Tok, go there. If they are on Facebook, focus your efforts there. It’s important that you don’t waste all your time trying to market everywhere. This will make you less effective in the long run.

DIY businesses are on the rise because they are often easy to start. Getting into a business making handwritten cards or baby announcements is easier than trying to start a retail store. You can share posts on your social media, put up signs on community boards, and even sign up for things like craft fairs and farmers’ markets. Think about how you’ll make money and how you’ll protect your business and family from litigation.