Six Steps to Start an Etsy Business in Ohio

Consumers are obsessed with the handmade, the artisan, and the bespoke. They want one-of-a-kind items crafted with care, and Etsy is where they buy them.

Founded in 2005, Etsy began as a place for makers to connect with customers in an increasingly digital world. Fast-forward 17 years, and the company is the biggest source of artisan goods in the country.

In 2020, Etsy processed $10.28 billion in gross sales. Their platform hosts 4.1 million sellers in more than 230 countries. From teenagers in Thailand to black business owners in Brooklyn, Esty enables everyone to find buyers for their unique goods.

But as large as Etsy is, getting started as a seller isn’t necessarily easy. It takes lots of time, patience, and knowledge to establish an Etsy business the right way. So if you live in Ohio, here are six steps to getting started on Etsy.

 

Step 1: Make a Plan

You may believe just because you’re selling something you enjoy making on the side that you don’t need a business plan. But you’d be wrong! Every lasting business starts with a plan—even side hustles on Etsy.

Research shows that companies with business plans grow 30% faster than those without. And if you’re considering procrastinating on this step—don’t. Businesses with plans before they market and sell their products are more likely to succeed.

If you need help getting started, check out Ohio’s business plan questionnaire. This document asks you all the questions your business plan will need to answer.

 

Step 2: Get Insurance

Once you know what you want out of your business, you need to protect it. The worst thing you can do is make a plan and get started right away, only to put off getting insurance until you have more time to think about it.

When it comes to protecting your business, the time is now. So don’t let the many distractions of starting an Etsy shop keep you from this vital task.

There isn’t required coverage, per se, for Etsy sellers in Ohio, but there are a few types of insurance you need to know about.

1 — General Liability Insurance: You could be knitting doilies or making custom cutting boards. Either way, things happen. For example, you could get carpal tunnel from too much knitting or too many splinters from working with wood. And that’s where general liability insurance comes in: a blanket policy for all those what-if moments. General liability insurance covers everything from property damage to medical payments for injured employees. This type of insurance also covers libel, slander, and defamation lawsuits.

2 — Professional Liability & Errors and Omissions Insurance: One of the biggest challenges of being an Etsy seller is working with customers. This is especially true if you’re creating custom goods made-to-order. Things happen, people miscommunicate or misunderstand, and the consequences can be unfortunate, to say the least. Protect yourself from your customers with professional liability or errors and omissions insurance.

3 — Commercial Auto Insurance: Do you use any vehicles for your business? If so, then this applies to you! Get commercial auto insurance if you use trucks or other cars on the job. This type of insurance will cover you in the event of fender benders, theft, or even natural disasters.

4 — Commercial Property Insurance: 97% of Etsy sellers operate their shops from home, so chances are, you plan to do the same. You may assume your homeowners’ policy will cover your business, but that’s not always the case. Every business needs commercial property insurance. This type of insurance protects your physical structure, equipment, inventory, and even income disruptions if needed.

 

Step 3: Secure Workers’ Compensation Insurance

Ohio requires all businesses with one or more employees to secure workers’ compensation insurance. However, if you’re operating a sole proprietorship and you’re the only employee, as most Etsy shops are, this doesn’t apply to you.

But some Etsy sellers do have employees. So if you’re one of them, you need to get workers’ compensation insurance to protect your company from liability. Visit Ohio’s Bureau of Worker’s Compensation website to see what type of workers’ compensation coverage your business needs.

 

Step 4: Register Your Business

Every business in the State of Ohio has to register with the Ohio Department of State. This helps the government know what kinds and how many companies operate in Ohio.

But before registering, you need to pick a name. Your name doesn’t necessarily have to be the same as your actual shop, but keeping them consistent will help. Visit Ohio’s database to check the availability of your business’ name before registering.

Once you’ve selected an available name, use this form to register your business.

 

Step 5: Setup Tax Collection

Etsy businesses are retail operations, which makes them subject to sales tax in Ohio. You need to apply for a vendor’s license to collect sales tax.

Once you start collecting taxes, you’ll need to register and file your proceeds. Visit the Ohio Business Gateway to submit sales taxes, employer withholding taxes, municipal income taxes, and Commercial Activity Tax (CAT).

The CAT is probably not relevant to most Etsy sellers because it only applies to professional service providers like attorneys, accountants, and medical professionals, as well as investors buying or selling property.

However, you will have to pay income tax on your profits. In Ohio, sole proprietors, partnerships, and corporations must pay tax on their net earnings.

 

Step 6: Create Your Shop

Now that you’ve done all the tedious technical stuff, now’s when the fun starts!

Go to Etsy and create your account. Be sure to tweak all your shop preferences and develop a catchy yet self-explanatory name for your business. Also, add your billing and disbursement information so you can pay and be paid.

Then, you need to add visuals. Use high-quality, original images to represent your store. You should have legal rights to any photos you use to represent your business and its goods.

All that’s left is to add your inventory! Again, make sure you use original, high-quality photos of each item to help buyers see what they’re buying. Also, add helpful descriptions that include dimensions and other relevant information for interested customers.

Contrary to popular belief, running an Etsy business is just as challenging as creating any other company. You need to plan well, work hard, and invest a great deal of time to set up your shop for success. And with the proper guidance, you can create a successful Etsy business in Ohio.