I can't answer you questions directly, but I hazard
that if you contact someone you know in woodworking
they might be able to steer you right. Also, go
down to your local Chamber of Commerce they will
have a lot of literature about starting up a business
as it relates to licenses, taxes, etc. Also, see
if there is a local chapter of SCORE nearby -
this is a volunteer organization of retired
execs who help out small business folks for
next to nothing. There's got to be someone
nearby, perhaps in the largest city near you.
Finally, I also suggest WorkShop News - a
publication for and about woodworkers who
work wood for money. Good articles about
hiring, taxes, etc.