as promised via IG, over the next 5 weeks you can expect an in depth breakdown of my 5 key elements to launching/starting your own biz! last week we covered my 3M METHOD for naming a biz. if you missed it, take a read! this week i am covering what business structure options you have! for anyone starting a biz, this is knowledge is essential.
figuring out what structure to use is probably one of most confusing first steps when starting a business. i remember starting my first biz back in 2012 with NO clue as to the best options available. here's the truth! don't over complicate the decision. the simplest two choices for a small business owner to focus in on would be DBA VS LLC. now, making the decision between the two might take a bit more time & thought. do you use DBA (doing business as) or form a LLC (limited liability company). AND what are the biggest differences!? i have created, set up & used both, let me be your guide. the goal is to make this as straightforward and easy to understand as possible. remember these decisions can effect the longterm growth of your business.
DBA: "doing business as"
it allows you to do business under another name that isn't your legal name. for example, theFITista DBA jenny sanchez! a DBA is a way to do biz without using your legal name. it also allows you to open a biz bank account & take payment under so created biz name. a DBA offers you the opportunity to run your biz without creating a separate legal entity. since you aren’t bound by limited liability, your business assets won’t be protected. meaning, you’ll be obligated to repay any losses you face. filing/registering a DBA is simple & fast. depending on the state you are in, it can be filed with a local or county agency. you will fill out the required form & pay a fee. i filed with the local country clerk and it cost me under $20. as said, you need to check on what your state requirements are!
an LLC is the formation of a separate legal entity from the individual owner. for example, dance house fitness, LLC. you must operate under a legal name you register with the secretary of state. to ensure that the name is approved, they usually will require a name search. similar names are not approved! LLC is a separate legal entity, it’ll protect your business assets. under an LLC, the individual won’t be the one responsible for any losses your business experiences. filing an LLC is not always a quick or cheep route. it may take an attorney & has to be filed with the secretary of state! my attorney & filing costs were about $1200. it took about 6 weeks, so plan accordingly. to file your LLC, you’ll have to complete a document called the articles of organization, certificate of formation, or certificate of organization. that being said, i know you can file on your own via the internet. i chose to pay an attorney to ensure it was all done correctly! doing it on your own would be cheeper & faster.
LLC VS. DBA:
when trying to decide between the two, it is important to understand the pros & cons of each. only then can you choose wisely! the biggest difference between the two is that an LLC creates a separate legal entity & a DBA remains under the owner. in other words, when forming an LLC, the legal entity carries the burdens of the business rather than you as an individual. whereas, when forming a DBA, you carry the business burdens as an individual.
📝sign up is now open for TF members, check your inbox 📧 , to attend my first FREE biz connect! this will be my first masterclass offering! limited to 50 guests. general public sign up coming wed! what you got to lose!?
i hope this helped inspire you & educate you on how to select the best business structure for you. if you would like to set up a in depth biz consult with me or connect on how we can work together, contact me! a list of my services can be found under the hire me tab, here. i take clients virtually or in person! TF CONSULTING has become a passion project. i truly thrive being able to help others find success in what they love.
leave me a comment if you enjoy content like this!
next week i will cover securing your free marketing tools! AND how to use them.