8 BIG Reasons You Should Talk to a Lawyer About Your Handmade Business

Business licenses? Trademarks? TAXES? Stop living like an artisan-fugitive… ensuring your business is legally compliant is not only a responsible choice but essential for your peace of mind.

Disclaimer: Every effort has been made to ensure the accuracy of this publication at the time it was written. It is not intended to provide legal advice or suggest a guaranteed outcome as individual situations will differ and the law may have changed since publication or may differ in your jurisdiction. Readers needing legal support or considering legal action should consult with an experienced lawyer to understand current laws and how they may affect their unique situation.

Spoiler alert: DON'T WAIT UNTIL YOU HAVE AN ISSUE TO SEEK OUT LEGAL ASSISTANCE FOR YOUR CREATIVE BUSINESS.

I’m someone who believes in people. In both my personal life and my business, I often lead with my heart instead of my head. Passing the vibe-check and a genuine, old-fashioned handshake is as good as a signed contract in my books. 

Most of the time, trusting people—and my gut—hasn’t steered me wrong.

I’ve also learned the hard way that it’s important to get the legal stuff sorted out. I’m lucky I haven’t had anything super crazy happen (knock on wood!) but it’s always a possibility, and thankfully I’ve had legal recourse for the snags I’ve encountered. 

But I’m sure you’ve heard some horror stories through the entrepreneurial grapevine:

A client ghosts on payment. Someone pawns your unique designs off as their own. The IRS comes knocking.

Truth be told, I sometimes forget that the world is a rough, wild, and raw place. 

Not to scare you, but people can be crazy. If you are a heart-centered entrepreneur like me, it's easy to forget that people can be selfish, ambitious, and often will take advantage of you… if you let them. You HAVE to look out for yourself (and your family, your retirement, your kid's college education, etc.). And one of the best ways to protect yourself is to get your legal ducks in a row earlier rather than later.

Part of building a successful business is building it on a solid foundation… and one of the most important pillars in your business foundation is having a solid legal plan.

My dear friend, I am (sadly) not a lawyer. 

So while this may not be legal advice, my lawyer tells me it’s safe to say that you should take care of yourself and your business. And to do that, every small business owner needs a good lawyer.

Do YOU need a lawyer? Try asking yourself the following:

  • Do I need a business license to sell my handmade goods?
  • What is the legal/tax structure of my crafting business?
  • Is my handmade business complying with copyright laws?
  • Do I have to charge sales tax on my handmade goods?
  • What are the labeling requirements for my product?
  • Do I need a return, refund, and/or privacy policy on my website?

If you struggled to confidently answer the above questions—AND IT’S TOTALLY OKAY IF YOU DID—it might be time to talk to a legal professional.

While all this legal talk may feel daunting (or just plain boring), keep in mind it’s for a good cause: the proper legal structures allow you to do what you love safely and securely. To make sure you have a successful structure to live your dream artistic life, check out these 8 considerations to help you build a legal checklist for an above-board and headache-free business:

8 REASONS TO CHAT WITH A LAWYER (OR TAX PROFESSIONAL) ABOUT YOUR BUSINESS:

1. Business Structure 

Building a business is just like building a house: you need a foundation before you can get to the other (fun) stuff like putting up your walls and picking out paint colors. Setting up your business on a solid foundation is super important. 

Business entity = a fancy way of saying “filing your biz with the government.” For many business owners, you’re likely deciding between a sole proprietorship or a limited liability company (LLC). Check with your lawyer to discuss your options, because there are pros and cons for each.

In my experience, filing as an LLC is usually the best fit for small businesses with physical goods. It allows for basic liability protection with minimal paperwork. Filing your business is kind of like filing your taxes: there are annual renewals and unique state requirements. Put a reminder in your calendar to re-file :)

2. Contracts 

Not the most exciting thing in the world (to say the least!), but well-crafted contracts are essential to running a professional and safe business. I cringe when I hear about someone entering into a business relationship WITHOUT a written contract (insert facepalm here).

What is the scope of the relationship? What happens if someone doesn’t pay an invoice? What happens if one person is abducted by a UFO and the contract needs to be terminated?

Contracts are not just a piece of paper or trivial extra work… they keep us safe and accountable to those we work with. They level up your business game, too, and are key to appearing professional AND developing trust. Whether it’s for a potential client, commission, subcontractor, or vendor, contracts help you cover your bases and ensure that all players know the rules. You can find some easy-to-use contracts and legal paperwork on TheArtistsLawyer.com or book a call to get started. Just don’t avoid this. 

3. Website & Promos 

Do you have an email opt-in on your website? Do you collect credit card information when you make a sale online? Do you run giveaways or promotions, or use Google Analytics for collecting data from visitors? 

If you answered yes to any of those questions, there are rules you should be following … do you know them?

All the tiny links you never read at the bottom of every website actually have a purpose! Your terms of service, privacy policy, affiliate links, and refund policy should all be kept up-to-date and legit. 

For example, several different laws guide the use of email marketing for commercial purposes (CAN-SPAM Act in the US, CASL in Canada, and the PECR/Data Protection Act/GDPR in the UK). Make sure to read up on these. However, if you are using a legal email marketing provider like Flodesk or Constant Contact you are probably in compliance ;)

4. Copyright and Trademarks

Do you know your intellectual property rights and how to protect your valuable content? Do you know if you’re infringing someone else's rights? Find out what you can (and can’t) protect by consulting with a lawyer. 

Don’t let someone take your awesomeness. You deserve the credit for your hard work and late nights. Make sure you have a contract for usage rights, register your trademarks, and keep records organized.

5. Hiring Help For Your Creative Biz

Even if you’re not planning on hiring anyone (yet), get familiar with what to do and what it involves. Did you know there are questions you can’t ask during an interview? Yep. 

Know your legal obligations and requirements, and have a lawyer help you hire. They can walk you through setup, background checks, employment taxes, immigration requirements, workplace safety, and how to avoid potential civil liability. They can also update your policies and ensure you are compliant with all local, state, and federal laws. 

6. Accounting

Don’t be a fool with your money! Open a business bank account, and separate your personal and business finances… trust me, it makes life so much easier. Also, use a financial tracking tool and check your finances daily. Hire an accountant to help and have a CPA on standby that you can contact for questions. 

7. TAXES…Yep

Taxes are a necessary part of a functioning society and are NOT as scary as you think they are. Make your life easier and hire a tax preparer or accountant to help you with all the necessary forms. And because you are a business-boss taking control of your finances with your separate business account (see above), doing your taxes at the end of the year is easier when you only have one account to check and go through ;)

8. Insurance:

I know… insurance. Bleh. It may seem tedious, but it’s an investment worth making to protect you and your business from unforeseen circumstances. 

If you’re browsing for coverage, check out Fit Small Business to chat about your options, or see if your current carrier would be willing to bundle with existing policies. Because every situation and business is different, you should make it a priority to understand your unique coverage needs. Liability, health, workers comp, etc…

FIRST THINGS FIRST - CREATE A LEGAL CHECKLIST (or use mine ;)

Now that you have a sense of some general categories to consider, figure out which topics are relevant to your business, and create a legal checklist. Make a note of what you’ve already got covered, what you can handle yourself, and what you should talk to a lawyer or tax professional about.

If you’re still feeling overwhelmed by the legalities, or hey, maybe you just want a legal checklist ready to go, I’ve got you covered. MyMakerSchool, my creative business fundamentals course, gives you the knowledge, tools, and practical templates (including a thorough legal checklist!) for you to confidently grow your creative business.

This online course will not only teach you business basics but provide a loving (and gentle) kick in the pants to GET. IT. DONE (the things that actually bring you profit).  With community, a mentor, done-for-you tools and templates, and a freaking plan, you can get out of your head and finally see growth in your business.

NEXT - FIND A LAWYER

Find a lawyer you trust to go through the checklist with you and make sure you’re taking care of these legal essentials. It's so important that you put this foundation in place. 

Need a referral? Magi at TheArtistsLawyer.com has all sorts of goodies that you can put to use. Browse her site, or jump on a call with her to get more detailed help.

And remember… MAKE IT A PRIORITY

It’s easy to let the legal stuff slip. However, I want you to be business-savvy and stay on top of things. Take your legal checklist and schedule out your goals in your calendar. You got this!

Need Help?

Are you ready to apply business fundamentals to your art practice and build a thriving brand? I would love to talk (and the community would love to meet you!)

CHECK OUT MYMAKERSCHOOL.COM OR LET’S GET ACQUAINTED - I’M HERE TO HELP YOU GET STRATEGIC AND LEARN THE TOOLS TO CREATE YOUR OWN DEFINITION OF BUSINESS SUCCESS.

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I share design, marketing, and brand strategy tips so you can market and build your handmade business. I want you to think bigger, better, and build your business with confidence and professionalism.

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ABOUT
THE AUTHOR

Heather Bunker works with makers and artisan entrepreneurs who want to build a professional and profitable brand.

She provides brand strategy, design, and marketing services along with a friendly disposition and a bit of encouragement. She has been a designer and art lover for over 15 years and is an active member of the AIGA, the professional association for design. Heather’s design trademark is her unique perspective and originality. For clients she delivers designs that capture both a unique brand image and the audience's attention. Spunky, bright, creative, and her blog is a joy to read. You can learn more about how her services can help grow your business by subscribing to her blog at HeatherBunker.com

I'm the "gentle-BULLDOZER" you need—to take your creative business to the next level.

No seriously, I am. And I'm here to help you out. You see, us artists, we are a special breed. We're creative, passionate, and driven individuals who often have a lot of trouble sticking to traditional business practices. That's where I come in! I'll give you the boost you need to get your art career off the ground and all the tools to do it right. Whether it's providing inspiration when you're feeling down, or kicking you in the butt when you need it, or heck, designing you a professional website. I'm here to help. So what are you waiting for? Let's get started!
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