Startup Series 1: By HairGoodsWholesale.com

Starting a Wig and Hair Goods Business
Business Licensing Guide

Business Licensing

Starting a Wig and Hair Goods Business

Finding suppliers and getting catalogs and price lists

Series 2:

Finding Products to sell and suppliers that sell them

Opening an Online Store

Advertising your Wig and Hair Business Online

 
 
 

 

Getting your business license to start a wig or hair business. The quick and easy guide. 

To get wig and hair goods manufacturers, distributors and wholesalers to talk to you, send you catalogs and wholesale pricing, you at least need minimum licensing. You need to have a business license or Seller permit (seller permit FAQ) from your city or county at least under your own name. Read on for more details.

If you already have a business license even if it is not specifically for a wig shop and hair salon but you are expanding your business you should be fine and not need anything else. Suppliers primarily need to know you are licensed in order to to sell products to you. However, keep in mind, that wig and hair suppliers want to know that you are going to be selling their products successfully through a shop that caters to their clientele. If you are licensed as a hardware store they ignore you or may not want to sell to you for reasons that are fairly obvious.       

  • Step 1:

    You can get business license under your own name or you can get one under a company name. The easiest, fastest and most inexpensive way to get a license is under your own name. However there are some disadvantages as well. Read on. Although getting a business  incense under your own name is easier and less expensive it has its disadvantages as well. Think about whether you will want or need to have checks made out to you. If you will, and most business do, you may not want the checks made out to you personal name. Do you really want to do business as Jane Doe or is Jane Doe Enterprises or Wig Enterprises better for you?

    To get a license under a company name you will need to file a DBA Doing Business (DBA FAQ) As also known as a "Fictitious Name Statement."  In order to open up a bank account under a company name or or to get a business license under a company name you will need to get a DBA. 

    If you want to work under a company name you are going to want to write down a list of possible company name for your business. Do at least 5 or even 10 because your first choice or even your second or third may already be in use. When you are choosing a names choose ones that are easy to remember and tell people what you do and what products you are selling. You are going to need make sure that the name you want is not already in use in your county.  Also, if you are ever going to do any business on the internet you need to check there as well.  Make sure no-one is using your name already and register your domain name in advance.  If you company name is Wigs by Galor you might want to register wigsbygalore.com  You can register you domain for as little as 9.00 per year, Create a Web Site with a Quick Shopping Cart  Hosting, and  Build and run your own successful online store for as low as 8.15 per month Here.  If you don't plan to sell on the internet you should still get a simple one page "Advertising Page" for your business. It will cost you less than $25.00 per year and it will help you get a lot more business to your door. Here.        
       

  • Step 2:

    Apply for a fictitious name statement. You can get and fill out the appropriate forms at your Country Registrar's office. There is a small fee that must be paid when applying for a fictitious name statement, but it is under $100 in most counties. Fictitious name statements are valid for five to 7 years years from the application date. You will receive a DBA (doing business as) statement in the mail once your application has been finalized. To completely simplify the process for you go here DBA (Doing Business As): fill out the forms you need for your county and get it all done for you. Visit the DBA Education Center for more complete details

  • Step 3:

    Open a checking and savings account in your business name. You may choose to use the same bank where you currently have personal accounts to save time if you are working alone. Most bank policies require businesses opening accounts to present their DBA.

  • Step 4:

    Find a physical location for your wig business. Enlist the help of a property management company or realty firm to help you find available spaces. These services are generally provided for free to business looking to rent or purchase commercial retail space.

  • Step 5:

    You will need to know which business license or licenses you need in order to start your business. You should also know if you need a Federal Tax ID (Fed Tx ID FAQ) While you may want to research the requirements yourself, most people find it impossible to do it on their own. You may contact you local City Hall, but that alone will not help you determine your licensing requirements on the county and state levels, and vice versa. Governments do not offer a one-stop-shop where you can go and get all your licenses, permits, and tax registrations. But, you are still required to have them non-the-less. Your first step in to find out about everything you need. Find out about them and even fill out the entire  Business License Compliance Package for your city, county, state and federal right here. 

  • Step 6:

    Get your resale license from the State Board of Equalization so that you may purchases wigs and accessories from wholesalers and manufacturers and sell them for profit to customers. You will need to provide your resale license to vendors on a regular basis. Resale licenses are given to businesses for free, but you may need to show that you actually need a resale license before one is granted by the state. Usually you will only need your business license and DBA to complete this process. Find out about them and even fill out the entire  Business License Compliance Package for your city, county, state and federal right here.

     

  • Step 7:

    Learn to fit a wig and even customize it for your clients if you do not already know how.  While some cosmetology schools offer courses, most people choose to learn through practice.

    You can find an excellent 60 minute wig styling video produced by a professional wig stylist. Here  If you are licensed you can also purchase it wholesale and sell the video Here

    Also, Wig and hair goods providers often have courses you can take you so can better provide service to you customers and sell their products.  There are 28 suppliers in the Wig Industry directory that Hair Products and Training as well as Partnership and Business Ops programs Here:

  • Step 8:

    Find wholesalers in your area or that will ship products and supplies to you. While ordering online may be cheaper, you need to factor in shipping costs before ordering. www.aaawigbiz.com  can help you find manufacturers, wholesalers and distributors to work with. www.hairgoodswholeesale.com provides a full wig industry directory of Manufacturers, distributors and wholesalers worldwide.  For really good general information about starting a wig and hair goods business visit:  Starting a Wig and Hair Goods Business General  Startup Information

 

FAQ Questions and answers about starting a wig and hair goods business

A Seller's Permit, also known as a Sales Tax License, Wholesale License, Resale License, Sales Tax Certification and Retail License is a permit to sell or lease physical (tangible) goods. You will need one to sell goods at the wholesale or retail level and to collect sales tax. It is illegal, in most states, to sell or lease physical goods without a Seller's Permit.
 

Do I need a Sellers Permit?

If your business sells or leases tangible goods or participates in the creation of tangible goods, you need a Seller's Permit. For example, if you make a watch for a specific customer, you are creating tangible personal property. Therefore, the total amount you charge for the watch (including the charge for labor) would be taxable. However, labor costs for making repairs are not taxable since they do not result in the creation of tangible personal property (however any sale on new parts required for the repairs would be taxable).
 

How long does it take to obtain a Sellers Permit?

The State Board of Equalization takes approximately two weeks to issue a Permit that Signature Filing has filed. If you need your Permit sooner than two weeks, simply select the 'Application Preparation Only' option and we will provide you with detailed instructions on how to obtain your Permit in as little as one day.

Question: I am a sole proprietor. I am registered in my town. I have a business account that I just opened up last week. I am a full time teacher and my business is strictly part time. I just have a love for hair since a very young age.  I plan to make wigs and sell wigs through my business. This will be done through my home and online when I get my site up and running. Do I really need a resellers license since I do not intend on having a physical shop. I do intend to sell other brand name wigs other than my own, but I don't know if I need a reseller's license and how to go about it. I reside in XX. Please help.

All in all what I am trying to do is be the Avon of wigs/weave, so I am more of a direct selling company. I sell through "wig parties" like how lia sophia workers sell through jewelry parties. I am the founder and head of my business and I am currently the only one running it. Thank you in advance.

Answer:  I'm a little confused. It sounds like you are already licensed at least locally. Is that right? Do you have a business license from your county or city?  If you do it should be no problem. It just that you listed yourself as a new business and didn't put down any licensing info.  
 
Here is what the suppliers need in order to send you catalogs and wholesale pricing -  in most cases - if you are a US business and they are also a US business.  A business license. It doesn't need to be for a wig shop but can be under your own name. With the exception of foreign companies in China or elsewhere, most all companies require you to be licensed for 2 reasons.  
 
  1. As far a the laws go - and some people do ignore those - and get away with it. You need to have a resale license to buy and sell products. The reason? You are required to charge and collect taxes. 
  2. What you do on the resale license is up to you however. Most suppliers don't need to see that or care. They do want you to have a business license before they will sell to you or even give you wholesale information. They are required by law, on the one hand, to sell to licensed individuals only, and on the other hand,  if you are not licensed they think you are a consumer.  The real suppliers don't work with consumers. They leave that to the retailers.  
One exception that can can often be found on the internet are the discounters. They are not manufactures, distributes nor wholesalers of wigs and hair goods. They often retail the products and sometimes say they sell wholesale. They don't care if you are licensed or not. They want to sell you the products and the rest is your problem. However, they also don't give you good deals. Often, instead of selling wholesale to you they are giving you only a discount on the products which often is far above wholesale. The rule of thumb is: if they don't need to see your business license they are probably not really selling wholesale or are a foreign company even if they are showing a US address on their website. Chances are very good they are not paying US taxes.

There are of course exceptions to every rule but those are few and far between. A few retailers actually sell slightly above wholesale and they are a good source if you would otherwise be buying very small quantities from various manufacturers. We tell you who these wholesalers are and tell you a few to avoid at www.hairgoodswholesale.com  This is the Wig & Hair Products Industry Directory of Manufacturers, Distributors & Wholesalers

 
I hope this has helped explain what is going on ands why.  
What is a DBA/Ficitious Business Name?

A DBA "doing business as" or FBNS "fictitious business name statement" is a declaration to the public that a business intends to use a business name (also known as an assumed name or trade name) that does not include the full legal names of the owners/partners. In some states this statement needs to be filed with a local government agency and published in a newspaper of general circulation in the area in which the owners intend to conduct business. Also, besides being required by law and a service to the public, you will need a DBA Certified Copy to open a bank account and accept checks written to your business.
 

How do I know if I need a DBA?

Because a DBA is designed to inform the public, one would need to be filed for any business name that does not fully disclose the identity of the owners. For instance John Smith & Associates would to need to file a DBA because their business name implies additional owners. AAA Auto Repair would obviously need one as well. However, John Smith Auto Repair would not need to file a DBA as this business name contains the full legal name of the owner. A corporation, LLC or other business entity registered with the state would file a DBA for any business name other than the one on their Articles of Incorporation.
 

When should I file a DBA?

A DBA statement must generally be filed before using your business name in the operation of your business, and in some cases within 30-40 days of your first business transaction. In some states a DBA needs to be refiled every 5 years or within 40 days of an address change. A business name may not imply that it is state registered organization unless it actually is. For example, John Smith cannot file a DBA for AAA Auto Repair, Inc. unless he has first incorporated with the proper state agency.
 

What protection does filing a DBA afford my business?

In most states, DBAs, unlike corporations or LLCs, do not guarantee exclusive use of a name. In most cases, the state or county will file any correctly prepared fictitious business name statement, regardless of name conflict. However, a DBA does establish a paper trail that could be useful in a lawsuit.
 

What is a Federal Tax ID/EIN?

A Federal Tax ID, also known as an Employer Identification Number (EIN) or a Taxpayer Identification Number (TIN), is an identification number assigned to your business by the IRS designed to identify your business to federal agencies. Similar to how a SSN is issued to an individual, a Fed Tax ID or EIN is issued to a business.
 

Am I required to have a Federal Tax ID/EIN?

A business will need a Federal Tax ID if it has any of the following: employee(s); operates as a corporation or partnership; files an employment, excise or Alcohol, Tobacco and Firearms tax return. Basically if a business has any employees, it needs a Federal Tax ID. However if the business is operated solely by the owner or a single member LLC, then the owner's SSN may be used and a Federal Tax ID is not needed.
 

What are the practical uses for a Federal Tax ID/EIN?

You can use a Federal Tax ID/EIN in order to open a bank account, apply for credit, fill out W-9 forms for clients, and file your tax return. Even if you don't need one, most business advisers recommend you get one and use it instead of your SSN.