Mike MurphyAI Handyman
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Episode 54

The Business Show

September 16, 2016 ·

Ep54: THE BUSINESS SHOW Today's episode is all about starting a legal business entity. Episode Summary: 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?

Episode Summary: The basics of starting a legal business entity — sole proprietorship vs. LLC, what each costs, and how to set yourself up for long-term success once you’re official.

What You’ll Learn

  • The Pomodoro Technique and the free Tide app for staying focused
  • The real difference between a sole proprietorship and an LLC
  • What it actually costs to legally start each type of business entity
  • 5 operational habits that set a new business up for long-term success

This Week’s Toolkit: Tide

Tide — a free iOS/Android app built around the Pomodoro Technique. Work in 25-minute blocks (“pomodoros”) on a single task, all notifications off. A gentle alarm signals the end of each block, followed by a 5-minute break to stretch or check distractions, then back to work for the next block. Hipster Sound is worth trying too, for ambient café sounds in-browser.

Sole proprietorship — the simplest, cheapest way to start. No legal distinction between the person and the business: all profits belong to you, but so does all personal liability for debts. Pros: easy and cheap. Cons: personal assets are on the line if anything goes wrong.

LLC (Limited Liability Company) — a hybrid between a corporation and a partnership. The key difference from sole proprietorship: personal liability protection. Personal assets (savings, car, home) stay protected in most cases. This is the structure chosen here, as a single-member LLC.

What Does It Cost?

Sole proprietorship: $50–100. No state paperwork required; a DBA (Doing Business As) filing runs $50–100 if needed for an EIN or business accounts.

LLC: $300–1,000 using an attorney. State filing fees run $150+, a lawyer $200+, an accountant $100+. (Real example: the accountant bill came to $110, billed at $220/hour for a half-hour setup.)

Operating Tips

  1. Set up a dedicated business bank account.
  2. Hire a bookkeeper or accountant.
  3. Run everything non-personal through the business.
  4. Save every receipt, and log expenses and income into one simple ledger or program.
  5. Stay on top of tax deadlines and pay annual fees as soon as the bill arrives.

“An ounce of prevention is worth a pound of cure.”

Show Notes & Links