Entrepreneur Office Hours - Issue #118
Another important lesson about hiring
A few issues back (Issue #115 to be exact) I wrote about how terrible I’ve always been at hiring people, but how I was going to give advice on the topic anyway. Apparently, in this issue, I’ve decided to do that again. Sorry…
At least, this time, the advice I’m sharing isn’t actually my advice. It’s advice I was given by an entrepreneur who’s incredible at hiring, and it helped me get significantly better.
The other topic for this issue is marketing, which is something I’m pretty good at. Or, at the very least, it’s a topic I understand better and something about which I’m more qualified to give advice.
Then again, in the Q&A, I give advice on a legal topic, which is a topic where I explicitly have to qualify that you should not take my advice. So… yeah… clearly the quality of advice in this particular issue is questionable. Consider yourself warned… 😉
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Office Hours Q&A
I love your newsletter and insights.
We are trying to get our startup off the ground without spending an arm and leg on legal fees.
Our inclination is to start as an LLC, we’re in California and Tennessee, and then if we need to raise money or issue stock to employees, we could convert to a C corp.
We need some guidance as to how to get this done for under $500.
There are 4 founders, 2 in California and 2 in Tennessee.
Thanks so much,
I should probably start with the important caveat that I am not a lawyer and nothing I write here constitutes legal advice. It’s just my opinion. Be sure to consult with an appropriate expert before making any decisions.
With that caveat out of the way, based on your question, starting with an LLC certainly seems like a reasonable approach. It’s likely the approach I would take in your situation because it’s the approach I’ve personally used. But, again, you should talk to someone who “knows more.”
More importantly, I wanted to address the idea of getting a business registered for under $500. I feel like most people don’t realize how easy it is to register an LLC. Yes, every state is different (and different countries have different regulations), but all you need to do is Google “How do I apply for an LLC in [ENTER NAME OF LOCATION].” Scroll passed the first however-many search results featuring companies trying to charge you an arm and a leg until you get to the instructions on your local government’s website. You’ll likely need to fill out a few forms online, pay a small fee, and you’ll be on your way. Also (if you’re in the US), you’ll want to get a federal tax ID number (which is free) from the IRS website. And that’s pretty much it.
From there, you’ll just have to make sure to pay your annual filing fees, but, again, that’s not a big deal.
As an FYI, I just searched “How do I apply for an LLC in North Carolina.” The third result was to the NC government website with instructions. The fee is $125.
Remember that, for the most part, governments aren’t interested in preventing you from starting a new business. In fact, they want to make it as easy as possible so they can collect more tax revenues. The only reason it seems difficult is because lots of companies prey on people who think it’s complex by offering expensive services designed to make the process seem harder than it is. Don’t be fooled!
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!