Tag - Business

Do I Need a Business License?

October 18, 2012
Travis Lane
Storage Auction Laws & Rules
Add comment
Business License

Operating a business without the required license or permit can get you into trouble with the local government, but determining whether you need a license can get tricky. Different states handle laws differently, and some counties or cities may have specific laws relating to licensing that differ from the state's. Making matters worse, different industries have different licensing laws. For example, food-related businesses nearly always require licenses, but non-service industries often do not. Before starting a resale business, it's a good idea to check with your state and local laws to make sure you're running things legally.

There are a few situations where business licenses are always necessary:

  • Service industries where you perform a service on a customer, such as a tattoo parlor
  • Food industries where you prepare or sell homemade food items
  • Any time you request bank financing for your job
  • Whenever you open a bank account under the company name

In Texas, there is no “general” business license. There are about 250 licenses for different types of occupations, including auctioneer and salesperson. The salesperson license primarily refers to major sales, like cars and real estate, rather than home-based resale businesses, but it's something you should look into before opening a store. Most counties do not have any additional licensing requirements, but you should check with the state of Texas at Texas.Gov to make sure.

In general, a small-scale resale business will probably not require a license, especially if you're operating out of your home. If you're just selling a few items over eBay or Craigslist, you can get by without obtaining a license. Once your business expands or gets its own premises, though, it's generally a good idea to obtain a license to make your business more official. This will allow you to open a bank account and do business under your company's name, and it makes it easier to handle your taxes at the end of the year.

Also bear in mind that even if you don't need a business license, you are legally responsible for a few other things when running a home-based small business:

  • You'll need a sales tax permit to sell anything in the state of Texas
  • You need to make sure that your home is zoned for business use
  • You might need to modify your insurance policy if you'll have buyers in your home

These extra expenses need to be taken into account when starting your business. It's also a good idea to consult with an attorney and a tax professional once your business starts to get serious; they can advise you about the best route to take to protect yourself and keep the most of your money.

Does It Take A Lot Of Money To Get Started In The Storage Auction Business?

February 26, 2012
Travis Lane
Frequently Asked Questions, Storage Auctions 101
1 Comment
Money Storage Auctions

Before I started AuctionsTX.com, I was a full time storage auction buyer. I have proven that you don't need a lot of money to get started in the storage auction business. I began attending self storage auctions with $400 of disposable funds and within a few months I was living off of the income from this business. It's kind of like going to a casino, but if you buy smart and only bid on what you see, you will consistently beat the house.

Most self storage auctions are cash only and you don't have time to go to the ATM after the storage auction is over. Some storage facilities do accept credit cards as a method of payment at their storage auctions. It is a good idea to call the storage facility for the specific terms and conditions of the storage sale. I have heard others say that using a credit card to buy a storage unit at auction is a bad idea. I personally feel that if you are financially responsible and being conservative on your bids, credit cards can be a great tool for getting started in the storage auction business.

If you have plenty of cash, by all means, bring it. Nothing hurts worse than missing out on a great storage unit because you didn't bring enough money with you. I know one storage auction buyer that brings up to twenty five thousand dollars with him to every auction. Is this really necessary? No, but every now and then, when a really incredible storage unit comes along, it works to his advantage.

On a really good day, you might have the opportunity to view 100 or more storage units up for auction. Consider the number of storage units you would like to purchase, and use the following guide to determine the appropriate amount of cash to bring with you every day. Most storage units sell in certain price ranges. Keep in mind, this is just an average. Selling bids do fluctuate depending on the quality & volume of the contents & the number of buyers in attendance.

Most 5x5 & 5x10 storage units sell between $5-$200. Most 10x10 & 10x15 storage units sell between $200-$700. Most 10x20 & 10x30 storage units sell between $700-$1500. Once in a while, a spectacular unit will come along and surpass these figures.

There is a learning curve. Not only will you need to have an idea of what things sell for in a retail environment but you will need to know how much they sell for used. Every storage auction buyer has their own method of determining a storage units value. Here is what has worked well for me: If you only bid on what you can see, then everything that you can't see is pure profit. This strategy works great on larger storage units where there are a lot of boxes or where the contents in the back of the storage unit are obstructed from view.

Another strategy that works well on storage units where a majority of the contents are in plain sight, is to consider the total resale value before the bidding begins. Divide that figure in half and subtract moving, labor & disposal expenses. Once you determine your maximum bid for the storage unit, stick with it. It's quite easy to get caught up in emotional bidding, especially on units that have something in them that you really want.