Just asking what best practices typically are, because someone told me that I should try to get small but consistent income results before starting an LLC.
I guess this makes sense, since it can cost a little to start and is a lot of work. However, wouldn’t this mean my business’s initial income/expenses would be coming in/out of my personal account, rather than a business bank account?
Don’t most people advise against this?
If you are starting a tech billion dollar startup, then yes you need an LLC, EIN, website, business cards, socials, business bank account, corporate lawyer, bookkeeper, financial advisor, accountant, company cars, etc.
Anything else, just worry about revenue first. Let’s make sure it even is able to lift off the launch pad before you worry about those things.
I know everybody thinks it is the greatest sin in the world to intermingle business and personal transactions by using your own bank account at first. I’m here to tell you. I’ve started several businesses. Nobody in the IRS or anywhere else gives a crap about the initial stages of a business. I know I’m a complete stranger on the internet, so I guess take what I say with a grain of salt. But to me, you should just worry about lifting your business off the ground first before worrying about LLC and all the other fluff.
As a matter of fact, I personally know a bunch of people who spent all their initial energy on getting an LLC, EIN, webiste, business, cards, etc. and never actually launched their business. They just left those things sitting there collecting time dirt. Don’t fall into this trap!
It’s not that the IRS cares, it’s that such commingling is tough to square during diligence of your first investment round. A clean sheet is better and easier for everyone.
I understand that. But making the LLC, EIN, etc. Is the easy part. I’ve seen too many times people focus on the easy part because it’s the easy part. The hard part is launching the company off the ground.
I’m mainly in the real estate business. Most people who want to do rental real estate never get past the research part. Why? Because it’s easy. You ask them why they haven’t gotten their first rental yet they will tell you they are still researching. Yeah, been researching for 15 years…
The OP needs to focus more on launching the company. Registering an LLC literally takes minutes to do.