Fashion, crafts, pastries, homemade creations… Small businesses are becoming more numerous thanks to the spotlight they enjoy on social networks, especially on TikTok and Instagram. However, many activities quickly collapse due to non-compliance with the law. To avoid making a mistake, here are the 7 basics you should know before starting your small business.
1 – Small business, the definition
A small business is a small activity in the sense that it is a
“small” turnover, usually around a few tens or hundreds of euros per month. It can be an additional activity or the pursuit of a passion that has become monetary. It can also be an activity in the start-up or testing phase prior to a larger investment to cover a larger market. Here’s an interesting video explaining how to start a small business.
2 – Why declare a small business?
Many passionate creators have had the rug pulled under them, denounced by buyers for not respecting the rules regarding distance selling, especially regarding the right of withdrawal and delivery time.
The risk is great! Gold, failure to declare a monetary activity and/or failure to comply with trade rules constitute violations of the Commercial Code and the Consumer Code, resulting in heavy fines (fines, payment of undeclared VAT, prohibition to establish a company).
At the same time, formalizing your activity under the self-employed scheme allows:
– benefit from simplified administrative and accounting formalities
– only pay social security contributions in the event of an effective sale
With such facilities and given the risks, do not hesitate to declare a small business.
3 – Declare your activity to become a business
Many people start a small business without seeing themselves as entrepreneurs. Still! Selling items on a recurring basis, new or used, handmade or resold as is is a commercial approach. The law requires that this activity and the resulting turnover be officially declared.like any company that offers paid products or services.
Specifically, the repetition of sales is the most important criterion for knowing whether you should declare your activity or not. The concept of profit also comes into play. In any case, when considering selling the small business with regular communication on social networks, it is advisable to proceed with the declaration of activity.
4 – How do you declare your activity?
The actual establishment of the activity must be carried out with a consular organization (Chamber of Commerce, Chamber of Crafts or URSSAF, depending on the type of activity planned).
By definition, the creation of a small business requires little investment for the entrepreneurand reporting the activity under the self-employed system is then appropriate (this claim has yet to be validated on a case-by-case basis through the preparation of a preliminary income statement).
5 – Billing and Accounting Rules
Each sale must be the subject of an invoice published in duplicate, one of which is intended for the customer and the other is kept by you for 10 years (article L123-22 of the Commercial Code). Otherwise, an invoice is an official commercial document that will contain some mandatory information (to see service-public.fr Where economy.gouv.fr).
Finally, you must comply with social, tax and accounting obligations related to the legal status and regime of your company (self-employed, company or sole proprietorship under common law).
6 – Distance trading, withdrawal and delivery period
As a seller, you must comply with the regulations regarding distance trading, in particular the buyer’s right of withdrawal and delivery times. These rules are always stated in the general sales conditions: document that must be made available to the potential buyer before purchase.
In summary, the buyer’s right of withdrawal is 14 days in case of distance purchase (to see service-public.fr). Subsequently, article L216-1 of the Consumer Code provides that the delivery time in the case of distance sales is freely determined by the seller. If not specified, it is 30 days. A delay in delivery can in many circumstances lead to a refund from the buyer by the seller, even if the delay is attributable to the carrier (see economy.gouv.fr).
7 – Sectoral Regulations
Each activity falls under a sector with its specific standards and regulations. An entrepreneur who wants to start a small business is not exempt from these standards. Inquire about your obligations with the consular organization responsible for your activity (Chamber of Commerce, Chamber of Commerce or Urssaf).
For example, food sectors need training in the field of hygiene and safety (food safety, cold chain); cosmetics companies are highly regulated with tests to be performed on the products and expert validations to be obtained before being placed on the market.
Fans are accustomed to negotiate and manage their sales via private message on social networks, especially by requesting payment through a money transfer application (like Lydia for example).
The practice is completely illegal in the case of declared professional activity. The entrepreneur who operates a small business must open a special bank account (professional account for a company or enterprise under common law – separate account for a self-employed person).
Payment must be made directly to this account by check or cash receipt, bank transfer or credit card payment through an e-commerce site. In addition, the seller must send an invoice to the customer at the end of the purchase.
The ideal is therefore to use social networks only to communicate and at the same time a site to sell, which can be yours or an intermediate market type site, such as Etsy, this famous platform specializing in the sale of “handmade” objects .