Not enough bands realize that their band is a business. Some band members may be familiar with business practices, but my experience has been that most are not. Therefore, this column will address what to do when you start a business.

The very first thing a band should do is get a business license from the county they live in. A business license is also called a "fictitious name certificate" or a "doing business as" (d/b/a) license. What this certificate does is tells the world that X,Y & Z are doing business using the name "The Band" and where their business address is located. The procedure for obtaining a d/b/a license is through the County Clerk. They will require an application and a small fee. Generally, another legal requirement is that you publish your application in a newspaper for 3 weeks. Most newspapers do this in their legal classified sections. The newspaper will publish your d/b/a license and it will read something like this: "LEGAL NOTICE: X,Y & Z are doing business as "The Band" with principle place of business at 123 N. East St. Chicago." The newspaper will take care of the rest and you will soon receive your business license. The main reason you need this license is to open a checking account in the band's name.

The next thing you should do is get a tax ID number for the band. I realize that very few bands pay taxes on what they earn. I am not sanctioning not paying, but this is the procedure for doing it the legal (and correct) way. You need to file form SS-4 which can be obtained by calling 1-800-829-3676. Fill out the form and mail it to the IRS regional office for your area.

Once you have a tax number, you should keep track of all the income the band earns. More importantly, you should keep track of all the band's expenses. This includes everything from promotion costs (flyers, 8x10's, etc.) to equipment (guitars, amps, PA's, etc.) to tour expenses (gas, meals, etc.). All of these are tax deductions. Taxes can be complicated so you may want to see an accountant. Don't worry, even the accountant's charge is deductible, as is a lawyer's incidentally. The IRS also puts out a great, though lengthy, tax guide. When requesting your SS-4 form, also request Publication 334, "Tax Guide for Small Businesses." Anything you ever wanted to know, or not know, is contained in this guide.

Another tax issue bands should be familiar with is sales tax. I have yet to encounter a band who was aware that they were supposed to pay Illinois sales tax when they sold tapes, CD's and tee shirts. Sales tax is what you pay when you buy something tangible, whether it is a pack of gum or a new car. Procedures vary from state to state so you should contact your Department of Revenue or Taxation for more information on sales tax.

I also recommend bands consider taking out insurance. You can buy insurance for anything. For example, sports teams often take insurance out on their star's physical ability. Consider insuring your equipment. If it gets stolen or damaged, the proper insurance policy may go a long way toward getting the band playing again. Also make sure whoever drives the band has auto insurance. Once again, insurance is deductible as a business expense.