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Knowing Your Business

Hello, followers! It is mid-January, and we are moving right along. I had planned to write something completely different this month, and then the topic of copyright and trademark came up yesterday, and I am always intrigued what little is made known to our business industry about the topics we need to know to properly run our business. It's not like we can go to the local library and check out a book that covers everything we need to know, although that would sure make it easier.

I started my business almost 20 years ago, and I knew really nothing about anything. I have always been creative, but self-taught my way with most aspects of my business. While the internet was around way back then, there was not near the information then as there is today.




First, let me say, while I have learned a lot, I definitely don't know everything, not even close, but I will continue to educate myself to the best of my ability. I am in no way shape or form offering legal advice, as I am not a lawyer. I will however offer a few links to some of the pages where I have found important information.

Again, I knew nothing when I started my business. One of the first things I did after purchasing some equipment and supplies, was set up my EIN and get a sales tax certificate through my state. You may apply for your EIN for free through the IRS. While not every business needs one, it can be helpful, especially if you don't want to use or give out your social security number. The site will help you decide if you need it or not. I am not going to link the sales tax page, as it will be through the state you live in, and each state has different rules for cost, filing frequency, and what you collect sales tax on. Contact the state you live in and consult their office for any questions you may have.

I belong to several business groups on social media, and ya'll, I am SHOCKED at the amount of posts from people who not only have never filed for their sales tax certificate, but they don't even know the difference between sales tax and income tax. I can completely understand how taxes can get confusing, which is why I have an accountant (she is amazing and has taught me a lot of what I need to know over the years, but I still leave the important stuff up to her), but a little research on the internet would quickly define the difference between the two. IT IS JUST AS IMPORTANT TO EDUCATE YOURSELF ON HOW TO RUN YOUR EQUIPMENT AND MAKE YOUR PRODUCTS AS IT IS TO EDUCATE YOURSELF ON THE NOT SO FUN PARTS OF YOUR BUSINESS AS WELL. If you have doubts or just don't have the time to understand the tax and bookkeeping portion of your business, find yourself a good CPA or accountant to take care of that for you. But please don't ignore it's importance.

Intellectual property is a little more challenging to find definite answers from legit sources. There are several aspects to this as well, so let's break it down.

First, you cannot go around stealing others artwork just because it's posted on the internet. And today, even the simplest software can remove watermarks. Just because you have access to so much information at your fingertips, doesn't mean it is out there for your taking. I always find it ironic when makers use other logos and brands but get offended when someone steals their own designs. If you look at a design and can recognize a brand, tv show, movie, sports team, etc., you shouldn't use it. This has issues of its own of course because there are makers out there, who do create their own work and will give you permission to use their work, but the issue is they are creating their art from a brand or design that they don't have permission to use to begin with, which will also get you in hot water. Some more generic designs can be found in magnitude and can be difficult to find the original maker. In that case, it is better to just create your own unique design, so you know without a doubt it belongs to you. Way back when I started, it was always said you could take someone's design and change it 25% and call it yours. This does not hold truth. If it looks like a duck, quacks like a duck, it's still a duck no matter if one squeaks a little louder, one has blue feathers instead of yellow, one has no feet vs the other having large feet, and so on. If you look at it upside down and it still resembles a duck, it's off limits for you to use as your own. And in this case, the duck represents someones brand or logo.

Second, there is a difference between copyright and trademark. Copyright pertains to design and is created as soon as you create your design. There is no database you can search to my knowledge, again, I don't know everything, but it is important to keep records of when your design was created so if there is ever an issue, you have adequate records to prove who made it first. The great news is there is a database for trademark, and it can be found here. Unfortunately, there are a lot of frivolous trademarks that have been approved, and not because it pertains to that business brand at all, but because that business wants to corner the market. I'm going to stray from the path for a minute and say that while there are many trademarks that should not have been approved, they are. What some people fail to understand is that certain phrases are only popular because so many people use them. Once you trademark them, no longer allowing others to use them, it is no longer popular because more than half the world doesn't even know your business exists. So, your dreams of making it big on that one phrase doesn't pan out because it is no longer is of importance. You can give 20 makers an idea and even if they are all using the same piece of equipment to make that idea, you will get 20 different designs unique to each maker. A few things to know about the database that we all have at our fingertips as long as you have internet access, are there are live trademarks and dead ones. Some trademarks refer to a phrase and a specific design, so as long as you aren't using their specific design, you can still use that same phrase. Some trademarks are the words no matter what the design. And all trademarks are categorized, so there can be multiple trademarks of the same thing, but in different categories. Lets say a phrase is trademarked for apparel, you can still use it for earrings, mugs, and so on and vice versa, but it would be important to make sure you understand what items belong in each category and to make sure the category you want to use isn't already trademarked. Another thing to keep in mind is just because you created the phrase or use the phrase doesn't mean someone can't come along after the fact and trademark that, making it now unusable to you, even though you did your research first.

You will also want to understand brand confusion. Since a football team was the topic, I am going to use it here as well. You can use the word Kansas City on any item you want. But since NFL teams have their team colors trademarked as well as a list of other items, you may not use Kansas City on any item in red and gold, because it makes people think of the football team, which has absolutely nothing to do with you. NFL teams do not give small business or makers rights to use their property, and they do not give you permission for just one team, it's the whole NFL, if you are eligible. You can tell the difference between a legit sports product, state or profession level, and a knock off by the holographic

emblem.

This site was the best I have found in regard to NFL in terms without all the legal jargon. It is typically easier to get a commercial license for college teams, you will need to file through the college itself, and they will have their own regulations to abide by.



You will also want to understand the first sale doctrine. You can buy a LV handbag and resale it as a used LV handbag. You may not cut up that handbag and make earrings and belts and resale those items as LV. You can buy a pair of Nike shoes and resell them as Nike shoes, but you can't make that pair of shoes into a crossbody and resell them. I have not done a lot of research in this area as it does not pertain to me, so you will want to do your own research if you want more information. If you want specific advice or want to know the advice you're given is correct, contact an attorney who specializes in intellectual property.

A couple other things to be aware of as makers. Most licensed fabrics state their license along the raw edge of the fabric. Most of them state you can only use their fabric for personal use, which means you are not allowed to sell anything made with that fabric.

If you sell baked goods and food, you will want to know your states cottage laws. They are different by state. Some states don't allow you to sell chocolate without a commercial license, some states require you to directly hand the goods made in your home to the purchaser (you cannot make items and have the customer pick them up at the hair salon down the street), but you can find some good information for Kansas here. If you have questions regarding Kansas Cottage Laws, contact KDHE.

Also, don't forget about business insurance. If you are working out of your home, most homeowners' policies will not cover equipment loss because they are items not typically found in a home, and they will not cover accidents if someone is coming to pick up a business purchase and gets injured. A business policy will cover both of those issues as well as give you coverage at vendor events. I have a business policy with our regular insurance provider, but there are other insurance companies that can get you the coverage you need as well.

At the end of the day, you and only you can be responsible for your business. While I do agree that business and crafters that don't understand aspects such as pricing and intellectual property can affect the industry as a whole, what the business down the street does with their business is not directly affecting how I operate mine. Only you know your business and the risk you can afford to take. I personally have worked way too hard and invested too much time and money to wonder if making a few extra dollars is worth losing it all.

So, while most of you really don't care about anything I have written here, it is an insight into why I won't' make certain items, why I won't sell some products that would be an easy sell, and why I will continue to educate myself in all areas of my business, even though it's not the fun part.



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