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Desert Fabworks LLC



I never imagined when I got my first plasma table about 15 years ago that I would be where I’m at today.  The table was just a 4x4 and I just intended on making things for myself working on my off road vehicles and miscellaneous projects.  And here we are 15 years later just purchased my third table and I have a very successful business running.

Getting to this point I have learned a lot along the the way and I hope to share some of this with you to make things easier for you and you can avoid some of the growing pains that I went through. This by no means is a complete guide or list and every jurisdiction has different rules so take this all into consideration.

If you want to get into this and never be a business that’s great no problem with that, but just do some hard thinking and really contemplate the reality of it.  If you ever think you could start making things and selling them better to get ahead of the curve and make your hobby a business early rather than later. The turning point for me is when I was asked by the city to do a sign for them because they heard I had a cnc plasma cutter.  When dealing with most business and especially city government, cash and carry and no invoice or receipt is not an option.  Your into Purchase orders and invoices and taxes and all that fun stuff.  If you already know or want this to be a full time business or side business here are some things to do.  

Come up with a Name -   This is a do it once and do it right thing. Changing things down the road is not easy so pick a name that reflects what your doing is easy to remember and spell and is not already in use by someone else.   Remember this name is going to be part of website addresses, email, forms, ect.   So making it really long or hard to spell will create problems down the road.  Take time here and do it right.

Logo - Branding is the name of the game and it will be part of your website, Facebook page, letter head, invoices and everything else.  Picking a logo that is square or round works best because of the design of websites, Facebook and other social media outlets. There are lots of places that will design a logo for you if your not that artistic.  One example is fiverr where people offer all kinds of B2B services for about $5 and up.  Logo Design, videos, graphics ect.

Making it legit - Once you have your name and logo its time to make it legit and form your business.  My recommendation is to skip the sole proprietorship and jump right into forming an LLC AKA Limited Liability Corporation and file as an S-Corp.   Say What? Ok if I scared you no worries its easy.  You can do this all yourself or you can enlist help.   Every state is a bit different on all the rules and hoops so I’m not going to get too specific here but there should be guides online for every state just do a little Google search and you can do all of this yourself if your up to the challenge.  If not enlist the help of online services like Legal Zoom or look for an accountant or paralegal office near you both can usually guide you through this process.  

Why an LLC and not Sole proprietor?  Its better and safer to separate your personal assets, social security number and other personal ties from the business right off the bat. This has tax advantages as well as legal advantages should something go wrong down the road. Its a little extra work in the beginning but once its done its done.  

Business License -  Once your LLC is setup and you have your tax id number and all of that fun stuff established determine if you need to have a business license for where you operate.  This varies from state to state, county to county and city to city. You want to have a state resale license established but this is different from a business license.  For example I”m located in an unincorporated section of my county and no county business license or city license is required for me, but I’m right next door to a big city which I do a lot of business with.  Typical government, since I”m not located in the city I do not need a city business license but wink wink they really want you to have a license if you deliver goods into the city.  So ya I ended up getting a city business license but it is like $100 a year so no big deal.  This does have the advantage that if there is an event or fair in the city and I want to have a booth I’m already a licensed business.  As I said this will vary for everyone so check out your location.

Accounting - When you enter the business world you need to keep track of all your business stuff and have a way to organize and manage it for taxes and everything else.  If you do form and LLC once things are set up you need to get a separate bank account set up for the business.  This keeps business and personal money separate you can put money into the business and pull money out but you need to track it.  That is where accounting software comes in.  I use Quickbooks, why? Because that is what my tax lady uses. Seriously though its a good program lucky for me I took accounting in high school and remembered enough to get me by. There are a ton of videos and tutorials online to help you.  Having some kind of accounting software is really necessary.  Bite the bullet and get going right off the bat.  If you log and track everything it can really help you manage expenses and track how your doing and guide you in your pricing and help out when it comes to tax time and getting back as much as possible. Speaking of tax time as I said I have an account that does my taxes both for personal and business. Necessary no but nice yes.  Almost all of the online tax programs these days have a business version and they do a really good job of guiding you through the process at tax time.  

Invoices / credit cards - As you know we live in an electronic, online, plastic society these days.  As customers ourselves we expect businesses to deal with us online and take plastic.  Your business should not be any different.  Your accounting software will be able to generate invoices but depending on which one it is and how its setup online, can be different than in person.  For my business I set up a business PayPal account to allow the sending and processing of payments online.  With PayPal I can email a customer an invoice they can pay with a credit card if they do not have a PayPal account or use there account if they are set up with PayPal already.  I can then send the funds straight to my bank account with never having to touch a credit card or cash its all handled for me.  PayPal also offers a credit card reader so that you can accept credit cards in your shop, at a craft fair or virtually anywhere.   This is defiantly a must in your society.  I have a Square brand credit card processing account as well but end up using the PayPal system more.  

This service is not free small and large business alike we all pay fees to the credit card processing companies for this convenience the fees vary and usually are a percentage of the amount charged.  It varies but is usually around 2-3%.  I consider this a cost of doing business and a convenience fee.   Factor this into the cost of your goods or services but don't shove it in the customers face and tell them that will be 3% more when they hand you a credit card to pay.  You as a customer you would not want to hear that so don't do it to your customers.

Marketing -  Once you have all of the above handled its time to market you business.  Check out my page on Marketing your Plasma business.  As much of a digital society that we are the good old paper business card is still a mainstay.  I really like using Vista Print online for my business cards.  They can also do your banners, magnet vehicle signs, novelty items and a host of other services for a very reasonable price.

Getting Business - Usually once you make the step to become a business you need business because you now have overhead to pay for; the accounting software, credit card fees, business license, website costs, on and on.  Until you run a business you never really understand all that is involved in the process and what goes into it and how much all the little things cost.   That overhead that you now have when you made the switch from Hobby to Business needs to be covered in your “Shop hourly rate” . Your running a business now and not a hobby.  You did not make this jump to loose money at least not in the long run. So charge a fair price that allows you to stay in the black and continue to move forward.   When I started out I did not pay myself a salary because the Plasma Cutting was a side business.  Instead any profits the business made were reinvested in the company in the form of new or better tools and equipment.  

A good website and smart marketing on social media will do wonders for bringing business to you but do not underestimate word of mouth.  Quality work at a fair price is one of your biggest allies in brining in customers.   Depending on where you are located and the clientele that you have in your area you can solicit business as well.   Talk to sign shops, that mostly do plexi or vinyl signs. Sometimes customers want metal and you could be a resource.  Meet your local fence companies.  Ornamental designs are always a hit on fences and you can cut them.   Get to know your local building contractors, custom base plates, brackets and a host of other things are now something you can provide.

Competition -  Since the cost of plasma tables keeps dropping they are popping up more and more places.   If there is a lot of competition in your area find a niche or style that sets you apart and always take the high road and maintain good ethics, there is more than enough work to go around you just have to innovate to find it.   

Summary - The first couple of years can be rough and profits are usually low or non-existent but stick in there if you setup with a strong stable foundation and avoid the common pitfalls and maintain a positive reputation and don't give up you will prevail.

Related Links:

    Hypertherm consumables     Material handling     Pricing your work     Marketing your business   Cut quality     Dross removal     Finishing options     Where to buy supplies    Naming & Organizing your files     Turning your hobby into a business