Saturday, August 6, 2011

AKA, DBA…who cares? You should.

Indy and Luke play with
a rope while Portia supervises

In order to put my business name on my checks, my bank required that I run a DBA (Doing Business As) notice in the local paper. In order to run the DBA, the paper required I get a business license from the city. Because I have two businesses, Tiger Mountain Graphics and Poway Pet Care, I had to go through this rigamarole twice. 

On my tax return, I file two Schedule Cs each year, one for each business. So I figured I had my business house in order when I recently applied to refinance my home. If you are self-employed, as most pet sitters are, you know exactly where this post is going. 

Just because I think I’m organized, and just because I think I make enough money to pay my house payment, doesn’t mean the banks agree with me. I’m sure the underwriters see “petsitter” and “artist” on my application, and roll their eyes. And sure enough, my application was refused because I don’t make enough money. My house payment was going to go DOWN $400 a month, but no matter, I couldn’t afford it. Just ask them. They certainly didn’t believe me. 

I protested, and the bank gave it another look-see. I have never provided so much documentation in my life. And some of the confusion was of my own doing. 

At some point, I have called my art business Pet Portraits. That name doesn’t encompass everything I do, since I also do graphic design, web site design, and writing. So I have used Tiger Mountain Graphics since about 1992. 

Somewhere deep in my credit report, a business has me on file as Pet Portraits. I don’t even have any business credit accounts, but I do purchase items like framing and art supplies through wholesale outlets. What’s this, asks the bank? How do I explain it? How do I prove it is my business if I’ve never used that name on a tax return or my business license? 

They asked me to have my tax accountant send them a letter verifying the business. If you are self-employed, you really need an accountant, by the way. Finally, I convinced them by showing them my re-sellers permit from the State of California, which says “Pet Portraits/Tiger Mountain Graphics.” 

Yay! At last! PROOF! Since it was issued in 1997, I had to show that I’m still in business, so my tax accountant still had to write the letter, even though they have copies of my tax returns for several years. 

Also Known As. I have gone by the nickname Terry for almost 40 years. But my given name is Teresa. That also required some explaining. 

The Lesson of the story…
If you offer and assortment of services under your business name, like pet taxi, boarding, grooming, etc., be sure you use the same business name for everything. If you rename or alter the business, be sure you have your tax returns, licensing, and other paperwork all in agreement. It’s hard enough to get a bank loan when you are self-employed, much less when your business (like mine) is an assortment of businesses all rolled into one. 

Keep legal documents simple and consistent. You’ll save yourself a lot of grief down the road. 

And yes, the refinance was approved. 
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© 2011 Terry Albert. All Rights Reserved.


Vicki Bamman said...

Wow! Words of wisdom--thanks so much. I have several services under one umbrella--doggie daycare (a commercial site), sleepovers (cage-free boarding), pet sit, dog walk, a boutique (a vendor booth), & pet taxi. Thanks for the very important nudge.
Vicki, Miss Molly's Pet Services, Ashland, OR.

Terry Albert said...

There's always another little detail to think about. I hope my experiences help others avoid the hassle! Thanks for writing.

L7 said...

I really appreciate your work and your thinking also, your post is very useful about the caring of our pets. Thanks for sharing and keep sharing...!

Dog Sitting Los Angeles

Joshua - PetSittingOlogy said...

Amazingly put, Terry. Thanks for sharing your experience with us, and making it clear on the reasons why a DBA might be important.

I'll be sharing this with my Facebook community too.

Oh, and happy to know all that hard work finally paid off and it was all approved.