Everyone dreams of being their own boss one day. If I was my own boss, I’d give myself lots of vacation days and an air hockey table in the break room, which would be my living room. Basically I just want an air hockey table in my living room. Unfortunately, going into your boss’s office and sitting at her desk and drinking from her coffee mug is not truly being your own boss, and will likely just get you in trouble too. The most realistic way to become your own boss is to start a successful business.
I have had aspirations to start my own business since I was a little kid selling protection to the kids on my street with the lemonade stand. They would pay me a small fee and I would keep their stand safe from lemonade thieves, bullies and other lemonade competition. I later found out that this is called extortion, and is not a great business model. In order to protect myself from falling into similar traps or prison I had to seek out Elliott Stapleton’s guidance to get my business started on the right path.
I was told that the most important parts of starting a business are the goods or services that I want to offer. This was problematic because I had only thought about how I wanted people to give me money, and I skipped the part about what to actually sell. Once I landed on which services to offer, I had to decide how to set up my business. I chose a limited liability company (LLC) for several reasons.
Liability is a word that really gets my attention, especially when my 7th grade basketball coach says I’m a liability and leaves me on the bench. When I think of liability in business I think of money, and more specifically, losing money. In an LLC, each owner is called a member of the LLC and therefore has limited personal liability when it comes to the company’s monetary losses. That way, if your business loses money or owes money, nobody can come take your personal hard-earned air hockey table. However with an LLC the company’s losses can be passed through to a member’s individual tax return! There is nothing like reaping the benefits of failure, such as not having to shower after basketball games because I didn’t sweat sitting on the bench.
If unlike me your company actually earns money, an LLC allows the owners to distribute profits in any way they choose, regardless of capital contributions. These are just a couple of benefits of starting an LLC. The process of starting an LLC is somewhat involved, and is something I will discuss in my next article. For now I have a hankering for some lemonade and a game of air hockey for some reason.
For the next step in starting your own business, read Starting a Business: Part 2.
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Elliott Stapleton Attorney with CMRS Law