How to Start a Summer Business

‘Tis the season! The summer season, that is. The sun is shining, flowers are blooming, and visions of poolside lounging and weekend getaways are dancing in nearly everyone’s heads. This time of year also brings ample opportunities for entrepreneurship. From teachers yearning to boost their bank accounts during their summer downtime to retirees looking to earn extra income and expand their social network to teens driven to gain valuable work experience on their own terms, the season is ripe for bringing business ownership dreams to life. But where to begin? In this post, I’ll step you through the mission-critical considerations and tasks involved.

1. Choose the Right Business Idea for You

Not every summer business will be a practical choice for you. Consider your lifestyle, skills, available time, personal preferences, and financial situation. Businesses vary in their schedule flexibility, the time they require, startup and ongoing operational costs, physical demands, and other aspects.

Here are some examples of businesses with different demands and overhead:

• Lawn care (physical tasks, equipment and fuel costs, daytime hours)
• Tutoring (flexible hours, specialized academic expertise required, minimal startup costs and low overhead)
• Swim instructor (flexible hours, specialized expertise and safety certification, minimal startup and ongoing costs)
• Pet sitting (restrictive schedule, minimal startup and ongoing costs, high degree of responsibility)
• Ice cream truck (a lot of interpersonal interaction, considerable startup and overhead costs, flexible schedule)
• Pickleball or tennis coaching (flexible schedule, athletic skills and sports knowledge, low startup and overhead costs)

Also, validate that your idea is viable before fully committing to it.

• Talk with potential customers. Is there a need for your product or service? Is the market already saturated with businesses that fulfill that need?
• Research local competition. How will you differentiate yourself?
• Run the numbers. Determine your costs and revenue potential. Can you make money starting and running this business? How long will it take to turn a profit?

Even a summer business deserves a solid foundation or you could end up with a result equivalent to building a sandcastle on wet sand. And if you have your sights set on reviving your business activities next summer (or continuing them into the fall or winter months), then the stronger your plan, the easier it will be to move forward.

2. Tackle the Startup Basics

Legal Structure

If you’re reading this article, I’m assuming you’re aiming to operate your summer venture as a business, not a hobby. Still, I think it’s important to explain the difference from a legal and tax perspective.

Generally, the IRS considers a money-making venture to be a business if the intention behind it is to make a profit. Under the One Big Beautiful Bill Act (OBBBA), hobby income is taxable but only the cost of goods sold is tax-deductible. The OBBBA permanently eliminated deductions for costs such as home office expenses, vehicle mileage, and software subscriptions when a venture is operated as a hobby. If operating a business, the entrepreneur may deduct those and other ordinary and necessary expenses when calculating their taxes. Another important distinction from a tax perspective is that hobbyists do not pay self-employment taxes (Social Security and Medicare) whereas business owners do.

Another major difference is hobby activities are not associated with a business structure, but if you’re operating a business, you must decide on its entity type.

This is one of the most important decisions that you’ll make for your summer business because it will have both legal and tax implications.

Popular business structures for small seasonal businesses include:

• Sole Proprietorship: This is the simplest form of business, requiring no formal entity registration with the state. By default, a one-owner business will be considered a Sole Proprietorship by the state and tax authorities. All profit and loss flow through to the business owner’s personal tax returns. Financial and legal liability for the business is completely on the business owner. Any debts or legal actions against the business are the sole responsibility of the business owner, putting the individual’s personal assets at risk.
• General Partnership: Any business owned by multiple individuals is considered a partnership if the owners have not registered it as a formal entity. Profits and tax obligations flow through to the individual owners, who are responsible for all debts and legal actions against the business. As with a Sole Proprietorship, a General Partnership owners’ personal assets are at risk if the company cannot pay its bills or is sued.
• Limited Liability Company: This business structure requires filing formation documents and designating a registered agent in the state. It’s a popular choice because it retains most of the administrative simplicity of the Sole Proprietorship/Partnership structures with the liability protection of a Corporation. While the business owner(s) are responsible for the LLC’s tax obligations (profit and loss flows through to their personal income tax returns), the company is a separate legal entity. This distinction protects the LLC owners (members) from personal liability for the business’s debts and legal issues under most circumstances. Another reason why many small business owners choose the LLC structure is tax flexibility, particularly the option to elect S Corporation status for reducing LLC members’ self-employment tax burden.
• C Corporation: Although this business structure has more startup and compliance formalities than the others, it might be a wise choice for some seasonal businesses depending on their state’s tax code and legal environment. Incorporating as a C Corporation requires filing formation paperwork with the state, designating a registered agent, appointing a board of directors, adopting bylaws, and potentially completing other filings and tasks. A C Corporation is its own legal and tax-paying entity, so the business owners (shareholders) are protected from the liabilities of the business. A C Corporation is subject to corporate income tax, and some of the company’s income gets taxed twice. Dividend payments made to shareholders get taxed at the corporate level when the income is earned and then again on shareholders’ personal tax returns. If a C Corporation meets the IRS’s criteria, it can avoid that double taxation, opting for pass-through tax treatment instead by filing for the S Corporation election.

Employer Identification Number (EIN)

Most businesses (whether year-round or seasonal) need an EIN from the IRS:

• Any business (regardless of entity type) that will hire employees
• Any registered business entity (e.g., LLC, Corporation), whether or not it will hire employees

An EIN serves as a business’s federal tax identification number and is used for federal payroll withholdings and deductions, income tax reporting, and other purposes. Most financial institutions require a company’s EIN before opening business bank or credit accounts, and licensing agencies might request a business’s EIN before issuing licenses and permits.

Business Banking and Financial Management

I can’t emphasize enough how quickly sloppy money management can derail an otherwise promising business. Just because your business is for a season as opposed to being year-round doesn’t mean you should treat its finances with a laissez-faire attitude. A few pro tips to keep things up to date and aboveboard:

• Open a dedicated business bank account (even for a short-term venture): Do not commingle personal assets and expenses with those of your company. With separate bank and credit accounts, you’ll be able to effectively track your business income, expenses, and financial performance.
• Keep up with your record-keeping: Process and record income and expense activities promptly so you don’t fall behind. It’s far easier and less confusing to document transactions as they happen than it is to play catch up with a pile of invoices and receipts.
• Understand your tax obligations: Besides annual tax filings, many small business owners must pay income and self-employment tax on a quarterly basis. Even if a business entity only generates income during a few months of the year, it may need to file quarterly tax returns to demonstrate that no tax is owed. And depending on the state where the seasonal business operates, other taxes and fees might apply (such as franchise tax, sales tax, gross receipts tax, etc.).

Licenses and Permits

Even a summer side hustle may need certain business licenses and permits to legally perform its work and comply with its municipality’s rules and regulations. Requirements can vary from state to state and across local jurisdictions.

Commonly required permits and licenses:

• Sales tax license (sales permit)
• Food safety permit
• Local zoning clearances
• Retail food facility license
• Sign permit
• Health permit
• General business license
• Fire permit
• Construction permit

The SBA website provides a good starting point for researching which licenses and permits might apply to your summer business.

3. Build Your Brand and Get the Word Out

Whether you're mowing lawns, organizing closets, remodeling bathrooms, vending shaved ice, or walking dogs, your business won’t sell itself; you’ll need to put in some marketing effort.

Fortunately, you have many free and low-cost tools at your disposal to help you promote your venture.

• Create a logo; free tools like Canva with generative AI capabilities make this easy.
• Set up a Google Business Profile so potential customers in your area can discover you.
• Leverage social media to raise awareness and build a following. Instagram and TikTok can be especially effective for visually driven businesses.
• Print business cards. I think you’ll be pleasantly surprised by how this simple, age-old marketing tool still serves as a powerful, tangible asset for spreading brand awareness and building connections.
• Network, mix, and mingle as much as possible in your local community to leverage the power of word-of-mouth.

4. Prepare for What’s Next

Do you anticipate exiting the business after this season is over, or do you plan to resume business activities again next summer? Or are you considering making your business a year-round endeavor? Your intentions will determine what comes next.

Ending the Business for Good at the Close of Summer

If you have no desire to continue your business at any point in the future, you’ll likely need to wind down operations and officially close it (selling might also be an option to discuss with your attorney and accountant). If you have formed a legal entity (e.g., LLC or Corporation), you’ll need to file articles of dissolution with the state, close out accounts, and submit any other forms and notifications to ensure all tax authorities and licensing agencies recognize your business is no longer active.

Deciding to Operate Year-Round

If you decide to go from “seasonal” to “all-in year-round,” continue to follow all federal, state, and local compliance rules to keep your business in good standing. Also, inform your existing and prospective clients that you’ll be available beyond the summer, so you can build your customer base and secure a steady, ongoing revenue stream.

In addition, consider whether your initial business structure is still the right choice for your company now that you’re going to operate all 12 months. For example, you might discover that converting from a Sole Proprietorship or LLC to an S Corporation or C Corporation could potentially be more advantageous from a tax standpoint. Discuss your situation with your accountant and attorney for guidance.

Resuming Business Activities Next Summer

Just because you aren’t selling goods or services after summer doesn’t mean your business’s compliance obligations go away. States consider LLCs, Corporations, and other registered entities as active businesses responsible for reporting, fees, and tax filings, unless the business owners have filed articles of dissolution to formally close the entity. Federal, state, and local tax authorities will require returns and reports, even if no tax is due, unless a business has officially closed its tax accounts. Also, the seasonal company’s owners will likely need to renew or reapply for the required business licenses and permits before resuming activities.

Although summer is short, it presents big opportunities for people who want to explore entrepreneurship. Ready to seize the season? There’s a lot to consider and only weeks before summer begins. Start thinking through your business idea and what you hope to achieve in the short and long term.