I'm starting a jewelry business...?

Alright, my sister and I want to sell jewelry and handmade stuff like knitted purses, and crocheted things. I know that we have to go through all this legal stuff and taxes and whatnot, but when do we have to? We want to start just selling on ebay and etsy, but how long can we do that before we need to get all the legal stuff done? We want to make sure people buy our stuff and we get enough money from it before we set it up as a business, to make sure it doesn't automatically fail. Can we do that or do we need to automatically set everything up. But I'm not even sure if I want to call it a jewelry business. If I just make a few pieces on the side every week do we still need to get the legal stuff done? Any tips for all this? And what all legal stuff do we need to do? Thanks so much!!! Also if you have any tips for selling the jewelry and making it and that type of stuff, thanks!