Re: pic: MVRE-109, high-recision shafted encoder
 

As long as there are no positrons, it shouldn't be too bad.

<sorry, that was off topic>

Re: pic: MVRE-109, high-recision shafted encoder
 

Starting a limited liability company as a sole proprietor would allow the owner to declare liability limits for non-illegal or intentional negligence. Might be a good idea if you are selling something that involves kids engineering. I have done this several times in NJ...

In 24 hours you can: start a website, get a VoIP forwarded toll free number, setup a store online, register a business name at the county seat, get a UPS store mailbox you can address as a suite. In 1-2 weeks you can get a federal tax ID if you intend to hire employees beside yourself or if it actually turns out FIRST requires it. Be aware the ID makes it clear you will collect sales and use tax (be careful about use tax). You can usually get an ST3 for tax exempt resale in less than 2 weeks after this. Legally your SSN is adequate if you do not have employees (you are not scapegoating taxes, the income and risk is yours directly). You should also get business liability insurance and a business checking account (try a credit union to reduce the minimum start deposit or monthly fees) once you get your certificates from the state. Then you are legally a business. There is no law, just some zoning issues, which stop you from running a distribution and even light production business from a residential home. Just do not make toxic waste or anything illegal.

You are likely going to spend $750-$1,000 to start such a business. Assuming you don't pre-pay for the services being consumed initially (usually not the best idea). Then you will be looking at $250-$400 a month of operating costs (insurance $150, phone $20, website $10, mailbox $70). You may need an accountant to help you file the sales/use tax and the taxes and they will likely cost more money. On the plus side: consider that operating a business out of your home has certain tax advantages. You can write a portion of your home off for business use but it must be used mostly for that purpose. You can potentially write off vehicle use. You can write off a proportional amount of your electricity, cooling and heating costs for the business portion of the home. Expect that yearly costs of operation will be several thousand dollars.

Now the question is: will the product still be cheap if you do all of this?
The answer might be no, and in the case of this encoder, I would suggest finding additional markets outside of FIRST because even a single issue might put you underwater.

Re: pic: MVRE-109, high-recision shafted encoder
 

While a good idea for something larger, for the point Asid is it none of this is necessary other than understanding how a sole prop works and how to handle taxes properly.

No sense in incurring a bunch of expensive before necessary, he can always add on later.

Re: pic: MVRE-109, high-recision shafted encoder
 

Yes and no. You can, for example, operate without stated limited liability or insurance but it depends on how much you like to sweat.

Usually I personally wouldn't hesitate to start a business via eBay and limited expenses but then again - I wouldn't be caught in the trap of selling stuff directly with the intent of high school or younger students using it (sounds really bad if something goes wrong). I also wouldn't have a partnership or control in my industry like a charity in that case.

I previously helped bid on a control system for FIRST. When you dig into it: FIRST really doesn't leave a lot of middle ground on robot parts (parts or tools not permanent to the robot system are different). If what you are making is going into a KOP or is common on the official fields there are expectations that push scale and costs. It is fairly safe to say if you don't just want to sell a small amount of something you'll have to increase your operating and stocking costs.

In reality you can safely skip a post office box. A toll free number. Even a website (but you can probably get that free if you ask someone like me as I own 3 reseller hosting accounts, just pay for the domain name). That said now someone will probably have your cell phone number and home address (perhaps you like calls at 2AM from any place on Earth for support). Really I don't think the costs are that bad - but there is a barrier between open sourced community and ready to sell on Amazon/AndyMark when it comes to FIRST.

If the costs are too much - may I suggest finding like minded people to help out. Sometimes it is easier to face a challenge like this when you have help.

Re: pic: MVRE-109, high-recision shafted encoder
 

The fact that doing so would require selling them to any other team who wanted one. And that doing so would reveal and effectively make said design public domain (unless it was something like 217/148 nonadrive, which is/was patent pending). It's the same way that the current rules regarding the reuse of old designs works; you can reuse all you want as long as you make it public domain so any team can use it freely.

Re: pic: MVRE-109, high-recision shafted encoder
 

Alright, I've decided to take down the listing for now while I get all my vendor stuff in order. I wasn't thinking clearly yesterday, and I want to make totally sure that I can sell these FRC-legally before I do anything. It wouldn't be fair to sell these under false hopes, even though I'm reasonably sure that they are legal.
Those of you who have already ordered will still have their orders filled by Chezy Champs, I just won't be selling anymore for a while.

Re: pic: MVRE-109, high-recision shafted encoder
 

Regarding licensing it can vary significantly by the state and the specific local municipality, especially with regards to a home based business. Zoning laws are laws and do vary by municipality. Many will not allow anything that resembles manufacturing to take place in a residential zone. Violations can bring fines and failure to comply with an order to correct can result in potential jail time in some municipalities.

Another thing that hasn't been mentioned is any Home Owner's Association rules on home based businesses. They can be very strict in some cases.

The time to get a license issued can vary as well. I know in the city where I used to run a home based business it took about 2 weeks from the time I turned in my application and money until it was approved and issued. In that case it had to be approved by a number of different departments. For example I had to talk to the fire chief and answer a number of questions before he decided to approve it and send it off to the next person on the list.


But yes in many cases getting a business legally operating is not that hard, expensive or take that long to make happen.

Other things to think about are taxes that again can vary. In my state there are B&O taxes based on the amount of sales. The city I operated in had their own version of wage taxes where there was a per hour, per employee tax rate that applied to anyone working in the city and to people working for businesses based in the city even if they are doing work outside of the city.

TLDR: Things vary depending on locality and anyone that wants to start a business needs to carefully research the specifics that apply to their location and type of business.

Re: pic: MVRE-109, high-recision shafted encoder
 

I've dealt with enforcement attempts before:

If you can bake there, fix your cars there, clean your cars and laundry there: sure they can file charges but best of luck arguing that no manufacturing at all is allowed. Obviously there are practical limits - but seriously it is far more likely a local authority can nail you for running a service business (hair salon, restaurant, bar, landscape contracting) than stop you from running a small milling machine and even PCB milling systems (what's next: hot glue guns, drills, staplers, 3D printers, optical disc writers?).

True if you live in a condo association or controlled community:

1. I pity your situation: these situations are ripe with crazy enforcement possibilities that you can inadvertently consent to and would not otherwise be enforceable by local zoning officers.

2. Usually you can move the manufacturing part out of the area and they can't stop you. In the past I have been known to accumulate work areas in towns nearby. Such that if someone raises a fuss - they are completely unable to halt my operations because I simply move them overnight to a new jurisdiction in which they have not got authority to act. Kind of bizarre when you are doing something perfectly legal but can't do it somewhere because of a broken legal system and people's agendas.

Good points. There are often exceptions. Ultimately though, even after you face the challenges in creating a business that would naturally exist. FIRST rules may still complicate things further. It is always wise to ask, and even, sometimes wise to progressively challenge the common knowledge because this is complex enough that sometimes what people think they know is FIRST regulation is not what the people that control FIRST actually think about the matter. Obviously the ability to challenge the status quo should be done with respect. It is not a license to be rude.

Re: pic: MVRE-109, high-recision shafted encoder
 

Wow, there's a lot of good info on this thread!:D
Afaik asid61 is going to college. How would being a college student affect these rules and regulations?

Re: pic: MVRE-109, high-recision shafted encoder
 

Even minors can form a business entity if they can provide sufficient ID in many jurisdictions. Obviously most minors do not have a drivers license.

College dorms might pose a challenge because of the rules. Some colleges will not allow business activity from the dorms.

In general I have never seen a college that can prevent you from operating a legal business, but maybe not on their campus with their tools. Then again: I would approach the dean for support and then you may find you have a free shop in your school, free website and access to software licenses (course they may want a cut of your pie as well).

I think many in the FIRST community could rally the necessary resources to move barriers if asked. I would certainly provide free web hosting and they could bring their domain to it. I might even provide some resources like money and tools. Key is to ask.

Re: pic: MVRE-109, high-recision shafted encoder
 

I think there will be many potential customers for this encoder (e.g, in the maker community) who are not concerned about FRC rules -- only whether the encoder works as expected and is reliable.

Re: pic: MVRE-109, high-recision shafted encoder
 

I was selling these at a very low profit (ended up being $0 after I forgot to factor in the price of $1 bearings :o) so if I wanted to sell to a larger community I would be charging at least $10 or $15 more.

Re: pic: MVRE-109, high-recision shafted encoder
 

Your markup is fair considering your competition price for a similar package. Also considering you seemingly did not factor in business costs.

If you make them available, I will grab 2 at the higher price.

Re: pic: MVRE-109, high-recision shafted encoder
 

This is exactly my approach at this time.
Once they become FRC legal, I will seriously consider them for our robots. Hopefully by that time I will have had enough experience with them to make an educated decision.

Re: pic: MVRE-109, high-recision shafted encoder
 

Looking at the current rules:

A) is easy. For a sole proprietorship or an S-corporation your SSN is a TIN (First term) as for as the IRS is concerned. (Actually the IRS calls it EIN) Lots of good reasons to run a small company that way. Lots of reasons to get a separate EIN including keeping your SSN secure. Sole proprietorships are easy to create requiring almost no paper work. In Georgia, they require a county business license in the counties they do business in. >$200 annual fee for one with little income. A LLC requires annual registration at the state level. In GA $100 for initial and then $50 annual.

B) is easy as well. Your business just needs to be separate from a team and not make "COTs" parts primarily for a team.

C) Is a bit more problematic. Many large corporations which are my vendors would not meet the literal definition. The GDC tends to like their rules to be interpreted literally. :]. But I read it as that you need to have the resources so you can handle reasonable demand. The IRS tends to divide business and hobbyist on rather or not you make a profit. Although if you make a profit on your hobby they want their cut and their are many large companies that operate at a loss.

An encoder is considered to be a custom circuit. It is not required to meet UL or other certifications. It not even required to actually work.

Anyway I think it is really neat that you were inspired to do this. Don't let the paper pushers keep you down.