01 Oct How to Determine If an LLC Is Right for You
With my EXP Elite Group on Facebook growing, and more Experiential Marketing professionals looking for answers, the question of starting an LLC is always a hot topic. I created a video to break down this topic in greater detail (be sure to watch the full video) and I outlined a few basic principles below.
Step 1: Review Your Financial Situation
Every EXP you know is telling you the benefits of obtaining an LLC, but have you taken the time to assess your financial situation? Ask yourself these questions:
- Do you work a majority of BA jobs or is it a mix of BA and management roles?
- Have you consistently booked job opportunities for at least 6 months as an EXP?
- Do you bring home an amount greater than $1,200 of additional income weekly?
- Will you be able to maintain an LLC?
- Can you afford to financially take on an LLC?
Reviewing the state of your current finances and your previous tax filings with a certified accountant will assist you in making a sound decision. Just because an LLC works best for one EXP doesn’t mean it makes sense financially for you.
Step 2: Do Your Research
You reviewed your financial situation and determined it makes sense to proceed with setting up an LLC and obtaining your business license. The next step is to research the various steps which may be required to obtain your business license for your locality. Obtaining your business license usually includes:
- Obtaining an EIN number through IRS.gov. Note: Being awarded your EIN number is just the first step, however, many EXP’s think that it’s the only step you must complete.
- Registering your business by applying for a business license through your local government office. Your EIN number will be required to complete this process and additional fees will also be required.
- Completing any necessary paperwork prior to registering. Having a business address, as well as identifying how any fees will be assessed, may be required.
Determining whether or not your business will be categorized as an LLC, sole proprietorship, or partnership is something you will have to decide prior. Will you just be using this LLC when you’re executing events as an EXP or do you have other plans? These questions should be answered prior to obtaining your license.
Step 3: Informing Experiential and Staffing Agencies
You have now gone through the business licensing process and your application has been approved. Congratulations! Now that you have your business license, and have an EIN number, it is important that you follow-up with any experiential as well as staffing agencies so they can update your payroll information. As an EXP, it is also important to note that not every agency will allow you to work as an Independent Contractor with a 1099. Many agencies may require you to serve as a W-2 employee and your personal social security number will be required.
Obtaining an LLC or any other business license as an EXP should be carefully considered. If you are looking to assist with offsetting income, minimizing event-related expenses, or you may be executing a lot of management as well as tour opportunities, and you are making a substantial amount (minimum of $50,000 as a 1099 independent contractor annually), then it may be worth talking with an accountant to see if obtaining an LLC or any business license makes sense. Remember, everyone’s financial situation is different so do your own research and seek professional counsel prior to making this commitment. I have created a FREE list of resources for you to download to assist in beginning your business.
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