Starting a Small Business/Starting a on-person business
I am in the beginning stages of starting a business that I will own and operate completely by myself. I have a bachelors degree in photography and my business would be setting up boutique photo booths for events such as weddings, graduations, holiday parties, etc.. What kind of business would this be? Do I even need to classify it as a business or could I be a freelancer?
I am having trouble deciphering the info I am finding on the web and just want to now what the smartest/simplest route would be to start operating my business. I have saved up enough money to purchase everything I need, I can design the website and handle all marketing creation on my own as well. I just need to know, legally, what I need to do for my business to start.
Thank you for your time.
When you ask "Do I even need to classify it as a business or could I be a freelancer?" it appears you are confusing two separate concepts. A business is basically any activity that you enter into with a goal of making money, other than as an employee of someone else. So owning and operating photo booths would definitely be a business. A freelancer is a business, too, not an alternative to a business.
The concept that I think you are grasping for is the form your business will take. There are many ways to organize a business operation. The most common forms of business (in the U.S.) are: sole proprietorship. partnership, corporation and limited liability company. Most other countries have similar business forms, though sometimes with different names. A partnership requires more than one partner, so if you are the sole owner your choices are sole proprietor, corporation or LLC.
The simplest form of conducting business is a sole proprietorship. That simply means the business is YOU. In a sole proprietorship, there is no distinction between the business owner and the business itself. All of the income and expenses are income and expenses of the individual, and all of the assets and liabilities of the business are assets and liabilities of the individual. That means if the business fails, then the debts and other obligations of the business are your personal responsibility.
Both LLCs and corporations, on the other hand, limit the liability of the owner to the amount the owner has invested in the business. At least that is true in theory. In actual practice, however, in many small businesses the liabilities of the business are often also the liabilities of the owner. See How Limited is Limited Liability?
Still, corporations and LLCs do provide some protection from certain types of liabilities and are popular forms of entities for many small businesses.
Corporations and LLCs are entities created by state statutes and therefore require registration with your state and payment of initial organizational fees and annual fees thereafter. So the cost and complexity are greater than for a sole proprietorship.
If you are going to either pay cash for the photo booths you buy, or buy them with your personal credit, you may find that going the simplest and lowest-cost route as a sole proprietor serves your needs adequately, at least to start. If you have considerable personal assets that might be exposed to liabilities of the business, you may find that an LLC or corporation is better suited for your needs. There is no clear answer of what is "best." It is simply a matter of weighing the costs and the benefits in your own particular situation.
Good luck to you!