Episode 54: is about starting a legal business entity
What is the difference between sole proprietorship and an LLC?
How much does it cost to legally start your business?
What can you do to set yourself up for success after your business is set up?

Purpose:
Learn the basics of starting a legal business.

The Podcaster’s Toolkit:

If you have favorite resource or tool you love and you want to share on the podcast, please send it to me at mike@mikemurphy.co and I’ll add it to the Kit.

If you are a vendor or product creator and would like me to test out a product or service, please let me know and I would be happy to test and share so long as I think it will benefit my audience.

In this week’s The Podcaster’s Toolkit:

Tide: Free App for iOS or Android
(Based on The Pomodoro Technique)

Tied

The Pomodoro Technique:
Timer is set in 25 minute blocks called Pomodoros.
For 25 minutes you only work on one task.
Turn off all notifications (No emails, texts, Facebook, etc.)
At the end of 25 minutes a gentle alarm goes off. Take a break.
5 minutes to stretch, walk around, check the distractions on your phone etc.
At the end of 5 minutes the bell returns to tell you to get back to work.
Work as many 25 minute blocks (pomodoros) until task is done.

Try out hipstersound.com if you want to test the cafe sounds in browser.

Episode 54.

What is the difference between sole proprietors and LLC’s?
How much does it cost to start a business?
What are some best practices to set your business up for longterm success?

Legal Entities:
There are basically two main options:
1. Sole proprietorship
2. Limited Liability Company or LLC

Sole Proprietorship
Sole proprietorship is the simplest and easiest way to start a business and the most common for freelancers and one man bands. There is no distinction between you personally and the business and you are entitled to all of the profits but personally responsible for all debts and liabilities.

Pros: Easy & Cheap
Cons: You and your personal property are responsible if anything goes wrong.

LLC or Limited Liability Company:
Hybrid between a corporation and partnership and one big difference between and LLC and a sole proprietor is the personal liability. My personal assets (savings, car, house, etc) are protected in most cases.

This is the option I have decided on. I will be A single member LLC

HOW MUCH DOES IT COST?

Sole Proprietor: $50–100
Paperwork to state not required
DBA/Fictitious Name (Doing Business As) so you can get an EIN number and apply for business accounts, etc: $50–100

LLC: $300 – 1000 (Using an attorney)
State Filing Fees: $150+
Lawyer: $200 +
Accountant: $100+

Note: My bill for the accountant was $110. He bills $220/hour and he charged me 1/2 hour to set everything up.

Operation Tips (Running a Business):

  1. Setup business bank account
  2. Hire bookkeeper or accountant
  3. Run everything through the business that is not personal
  4. Save every receipt. Input expenses and income into one ledger or program. Simple.
  5. Adhere to tax deadlines and pay annual fees as soon as bill arrives.

An ounce of prevention is worth a pound of cure.

HOUSEKEEPING

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