Ball Python Business

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Originally Posted by mxrider42

Jason,
I plan on starting out small and reinvesting the money into the business. I am not palnning on living off of the business but just mainly for fun.
I don't really know if I want to start a business. I am just looking into it.
Thanks
Trey

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Honestly even as a hobby I would still recommend to write up a solid business plan...it will help you expand your "hobby" into a larger business if you ever choose to do so.

In that one link I posted they state that if you make a increased profit for 3 of 5 years it is technically a business, so even if you sell any snakes and break past your initial investment technically (and legally, I believe) you do have to file those gains in your taxes...but you can always skirt that by making yourself "break even" by putting more money into your business.;)

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Originally Posted by JBallPython

First thing you need to do before you start a business is write a VERY detailed business plan....layout every expected and possibly unexpected costs. You'll need a bit (on average 80k capital) to start.

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Okay, I take exception to this. I have no idea where you came up with the $80,000 in capital. Every business... EVERY business has different requirements, and as such, different startup costs.

The first business I started, I had about $800 to invest in. By the first year I had quit my day job. That's certainly not something one should consider the norm, but it's certainly an example of why a static number isn't wise to hand out as an average.

The list given by the IRS on what constitutes a business or hobby is fairly vague. However, the rule of thumb is a profit made 3 out of 5 tax years is a business. So, if you assume that over the next five years, a minimum of 3 of them will be profitable, you are indeed running a business. If there's potential that you may only make a profit on 2 of them... you have yourself a hobby.

An accountant would probably advise you to wait until they have 2 straight years of profitablility before filing as a business. The biggest risk of starting the business now, and claiming deductions, is if you run 3 years without profit... the IRS can (and may) retroactively tax you as a hobby. That's going to hurt when the bill comes in.

I have decided to wait and see how the next few years go. Thanks for everyones help. I found www.sba.gov has a lot of info. I have decided to make a business plan and start mapping expenses just to give me some ideas. I'm going to talk with an accountant also just to see what he says. But I have found out there is a lot more to it than I expected.

Thanks
Trey

getting everything set up is the hard part. Once you get things rolling its no big deal to stay on top of it..

P.S Quickbooks Pro is a life safer when it comes to business related money software

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Originally Posted by jhall1468

Okay, I take exception to this. I have no idea where you came up with the $80,000 in capital. Every business... EVERY business has different requirements, and as such, different startup costs.

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This is true every businesses investment requirements are different. However I had found to be true that for a retail business the average capital used to start was 80-100k.

Now if it starts as a hobby and takes off rolling, and you make a profit year after year you really don't need that amount of money...but it started as a hobby, you aren't renting space, paying extra utilities, etc.... and the business has the taken a longer route to get started, which there is nothing wrong with.

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Originally Posted by JBallPython

This is true every businesses investment requirements are different. However I had found to be true that for a retail business the average capital used to start was 80-100k.

Now if it starts as a hobby and takes off rolling, and you make a profit year after year you really don't need that amount of money...but it started as a hobby, you aren't renting space, paying extra utilities, etc.... and the business has the taken a longer route to get started, which there is nothing wrong with.

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but do most of those retail businesses consist of multiple $3000 or $4000 snakes along with others in the $1000 range

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Originally Posted by tmlowe5704

but do most of those retail businesses consist of multiple $3000 or $4000 snakes along with others in the $1000 range

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Probably not...but many have several thousands of product and hardware. And honestly when you can afford to drop 3-4k on a snake...its probably no longer a hobby.;)

I would say the main thing you should do when you look into selling your animals is to check with your states guidelines. For example in the state of florida in order to sell or exhibit class III wildlife (almost all reptiles and exotic pets) you must have a class III license/permit.
You definatley dont want GA version of Fish and Game up your you know what about that one.
I have enjoyed our run of it so far. I can tell you it have been very rewarding for me.

Good Luck!!
:rockon:

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Originally Posted by Freakie_frog

You would need to check with your CPA to find out where the IRS and your state draws the line on hobby and small business.

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Right, in Iowa anyone who makes more than $500 a year selling animals must be licensed as a "pet shop".

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Originally Posted by Wild Bill

Right, in Iowa anyone who makes more than $500 a year selling animals must be licensed as a "pet shop".

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I also wanted to add that does include trades for animals, if you trade more than $500 worth of animals you're a "pet shop".