Where to sell a new product?
Dear Karen: I launched a new product but I can’t get stores interested. Besides my own website, what sales options do I have?
Answer: Try boutiques, flea markets and consignment shops in your neighborhood. Search out niche online retailers that are looking for new products to differentiate themselves from larger retailers.
“Online stores are providing a new venue for entrepreneurs who don’t have the product line or track record that the big retailers demand,” said Jeff Gawronski, founder of YakAboutIt.com.
And don’t forget websites like eBay and Amazon, where you can list your products for a flat fee or a percentage of your sales.
There’s a tax on self-employment
Dear Karen: I recently became a consultant. Do I have to pay self-employment tax?
Answer: Yes, you must pay self-employment tax of 15.3% if your net earnings from self-employment are more than $400. Self-employment taxes fund Social Security and Medicare.
Calculate your net profit and list it on IRS Schedule SE, which must be filed with your income tax return. The net profit will be used to calculate your self-employment tax, which you must pay in quarterly installments. The IRS has detailed information on its website, irs.gov, in Publication 505.
Also, there often are city and state tax and license requirements.
Steps to set up a new company
Dear Karen: My partners and I want to start an Internet business. What business steps should we take?
Answer: Formalizing your partnership with a legal agreement is key to avoiding future problems. You should also file a fictitious business name statement (also called a DBA, or “doing business as”) and open a business bank account.
Talk to an accountant about setting up your books and paying taxes. And talk to an attorney about choosing a formal structure for your company, be it a general partnership, a limited liability company or a corporation.
For more steps, there are hundreds of how-to books and manuals to consult.
Questions? Write to Karen at inbox.business@latimes.com or In Box, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012.
