breakfree.pngMoments ago I posted an entry about the Four Hour Workweek. In that book author Tim Ferriss recommends starting your own business in a niche market and selling a product online. Maybe you’ve wondered how to get a business (an LLC specifically) up and running. Well, here are the steps (for Utah, at least):

  • Get a mailbox at The UPS Store/Mail Boxes Etc (when writing the address use “new mailbox address, STE 1234″ instead of #1234– it looks more professional)
  • Get a free service like http://www.grandcentral.com/ for your new office phone # (forwards to cell, emails voice mail, etc)
  • Get a domain name and setup email forwarding and a quick homepage (GoDaddy)
  • Register your business https://secure.utah.gov/osbr-user/user/welcome.html (request name $22 (wait a day), get EIN $30)
  • Print out articles of incorporation and go get a business bank account– Washington Mutual (no fees, but $100 deposit at opening needed plus two forms of ID)
  • Setup Paypal or Google checkout with that bank account so you can accept payments
  • Setup an accounting system (like QuickBooks online) to manage finances

Why an LLC?

  • Pass-through taxation (no double taxation like other corporations)
  • Personal liability protection for members
  • The ability of owners to deduct their share of the LLC’s net loss for the year on their personal return

Once you’ve got an LLC:

  • Keep track of all business expenses (with receipts), and business income
  • Don’t co-mingle funds (this can lead to someone potentially “piercing the corportate veil” and getting your personal assets)
  • At tax time, file a 1040 schedule C for the LLC http://www.irs.gov/pub/irs-pdf/f1040sc.pdf (or 1065 and schedule K if the LLC is a partnership)