advice When do I need to set up an official business?

[Mlebo]

Hello everyone,

Going through life changes and need some advice. As of today, I officially lost my primary job of 29 years due to the changes made from the COVID Pandemic. I have been reselling domains for the last few years as a hobby and trying to make a little money. Sold a few domains and currently hold about 180 domains. During my last few months of being laid off and working from home, I set up an Efty Marketplace on one of my domains Best/Domains/Direct.com. Even though I haven't had any good leads from the site and landing pages yet, Efty has been helpful in getting me organized and realize that I was spending more than I had thought on my "hobby" and need to be more proactive on having this pay for itself. That is why I set up the Efty marketplace so I can market it on some social media and have a more cost-effective method to sell. With my current debt load, 1 kid in college, and another getting ready to go in about a year, I do not have the option to do domaining only; however, I would like to continue doing it to supplement my income.

Where I need some advice is as to when I need to set up an official business? Can I just continue to do this under my name or do I need to set up an official business? Any advice is appreciated.

Thank you,
Mlebo.

 

[Reddstagg]

Good afternoon Mlebo,

Sorry to hear about the loss of your job. It will be tough for a while but not impossible. I firmly believe in turning negatives into positives and I see no reason why someone in your position couldn't turn being a domain investor into a small business.

However, you will need to apply the same principles to any business whether you are selling domain names or melons or pencils.

If you are able, I would firstly talk to your bank and see if you can get an appointment with their small business advisor. There may also be external resources available in your town or city which can usually offer good free advice.

Like you, I have my names listed on my Efty marketplace and one of the more experienced domainers on NamePros advised me that I could also list them at Afternic. It would be worth checking to see whether this is something that would be suitable for you.

There are many good resources available here so the best thing you can do is to read...a lot and maybe list some of your domains in the appropriate appraisal threads to get some feedback.

I wish you well on your journey.

Regards,

Reddstagg

 

[bmugford]

There are likely tax and others benefits in opening a company, but there is no requirement that you do so. If you are a sole proprietor, you can just report your income on your personal income taxes.

A LLC is a pass through-entity anyway, where your income is reported on your personal income taxes.

Brad

 

[equity78]

What are you trying to accomplish? Do you plan to have shareholders? Raise money?