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Archive for May, 2014

Business License Hell


Nobody ever said selling Floppy Emus to the public would be easy, but for an operation that’s barely one step above an eBay garage sale, the amount of legal hoops I’ve had to jump through is ridiculous. How did it get this bad? I’ve had self-employment income in previous years, from consulting projects and ads on my web sites, and I simply listed it on schedule C of my state and federal tax returns. Now Floppy Emu sales have ensnared me in some kind of endless bureaucracy of forms and licensing and taxing. Ugh.

It all started when I found a local company to assemble Floppy Emu boards, because I was tired of hand-assembling them myself. The owner advised me that unless I had a California seller’s permit, he would have to charge me 9% sales tax on the assembled boards. Since this was a fairly large order and 9% was a non-trivial amount of money, I did some research and obtained a seller’s permit for Big Mess o’ Wires. Hooray, unnecessary tax avoided! Unfortunately this meant I was now obligated to collect sales tax from California residents when they buy a Floppy Emu, and file a special sales tax return with the state. Ugh. Maybe that wouldn’t have been too bad, if it had been the end of it.

Unfortunately, getting a California seller’s permit seemed to be the trigger for every other state and local agency to hit me up for something. I received a letter from some company called Muni Services informing me that I lacked a business license for the city where I live. I was invited to apply for a license, but there was no mention of the cost, and the application form was entirely geared towards traditional businesses with an office and a retail storefront. I managed to reach somebody at Muni Services who was entirely unhelpful, telling me I should just leave any non-applicable sections of the form blank. In my case, that was pretty much the whole form, except my name and contact info. I sighed, completed the form, and mailed it in.

Some weeks later I received a cryptic bill for $496, which included the business license fee as well as an unexplained penalty. Oddly, the bill wasn’t even from the city, but from this mysterious Muni Services. I was suspicious of some type of scam, but from everything I could tell the city had legitimately contracted Muni Services to handle their business license compliance. So I sighed again and sent them a check for $496, hoping that would be the end of it.

After another interval of a few weeks, I received a phone call from somebody at the city, saying that I needed to go through the “zoning compliance process”. This requires me being at city hall on a weekday between 2:00 and 3:30 PM. Apparently there was some problem with my business license application, because the address provided is not zoned for businesses. No surprise there, it’s my home address! So I have to find a time to visit city hall in the middle of the afternoon on a weekday, and submit some kind of home-based business affidavit. After which it will hopefully be the end of my troubles, but I’m not optimistic.

This whole process makes sense and would be reasonable if I were opening a grocery store or a tire center. But for a part-time hobby that only earns a few hundred dollars a month, these hassles tip the scales to where it’s questionable whether it’s worth it at all.

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Fresh from the Factory

box-of-boards 2

It’s been quiet here in electronics hobby land, but I do have some good news to report: as of now, all Floppy Emu boards are professionally assembled by Microsystems Development Technologies in California, USA. No more hand assembly! It’s a glorious thing to receive a big box stuffed with assembled boards, and as good as a kid opening a package on Christmas Day. Microsystems wasn’t the cheapest option I found, but they weren’t too far off. I was convinced to go with them thanks to their quick and helpful answers to my many questions, and by their nearby location in San Jose. That’s a short drive from where I live, so when the boards were finished I was able to drive down there and meet the owner in person, and discuss potential changes for future board revisions. That alone was worth the cost difference versus slightly cheaper Asian alternatives.

Microsystems took my design files and bill of materials, and handled everything from there. They made the PCBs, purchased the parts, assembled everything, programmed the chips, and ran the board self-test. That’s a huge time savings for me, and it also removed a major source of potential faults because they handled all the tricky surface-mount work.

Unfortunately, the “finished” boards from Microsystems still aren’t quite ready to sell. It takes another 15-20 minutes of labor per board for me to attach a DB-19 connector (or build a DB-19 extension cable, depending on the type of board), assemble an LCD module, adjust the LCD contrast, and run the board through real-world file copy tests on a couple of vintage Macs. I thought Microsystems wouldn’t be able to handle those steps very easily, so I asked them to skip it. After more discussion, though, it looks like they can do everything except the file copy tests without much trouble. It’ll cost me a few extra dollars, but if it saves me time and headache, it’s probably worth it.

One bummer is that I’m still seeing a few boards that consistently fail my file copy tests, and can’t be sold. This happened sometimes with the old hand-assembled boards, and I never did find the cause, but I suspected it was related to my lousy hand-soldering job. But since it’s still happening with the professionally assembled boards, it’s probably some kind of design flaw. Ugh. For the time being I’m just setting these boards aside in the reject bin, but eventually when I’m sufficiently motivated I’ll see if I can figure out what’s wrong.

TL;DNR – While it doesn’t solve every problem, having professionals source the parts and assemble the boards is very nearly the best thing since sliced bread. I’m happy to give my soldering iron a well-deserved rest.

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