- Listen, you guys.
Running a service-based business can be complicated.
When your business revolves around selling your skills
and time and expertise,
things can get overwhelming.
Stay tuned because I'm about to give you some helpful tips
on how to start and run your service business.
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Hi, everyone!
I'm attorney Aiden Durham with 180 Law Co. in Colorado.
And welcome back to All Up In Yo' Business.
Before we get into it,
don't forget to like, subscribe and share
and check the description for links
to additional information and resources.
I also wanna give a huge thanks
to our special partners for this episode.
Our friends over at Finli.
Finli is a comprehensive platform
that helps you run your business,
simplify your day-to-day operations,
and get back to focusing on your clients
and generating revenue.
Because, I mean,
that's really what we're all in here for, right?
Make sure you watch till the end of this video
for an exclusive 90-day free trial with Finli.
Okay.
So in my opinion at least,
there are three things that you need
to successfully start and run a service business.
And one thing that you don't necessarily need,
but might still be a good idea.
Let's start with the thing that you don't need,
but may still want anyway.
I'm talking about forming a business entity like an LLC.
There are a few reasons you might wanna do this.
The first reason is that a lot of people think
that it makes you more official.
If you can attach LLC or Inc.
to the end of your business name,
it makes you more legit and more real,
a legit serious business.
I don't necessarily buy into this line of thinking.
If I'm considering working with a service provider,
I'm much more concerned about their skill level,
how they're gonna provide those services to me,
and what my experience will be as a customer.
But, hey!
If you think operating as an LLC
is gonna make you more legit
or give you some additional credibility,
then more power to you.
The second reason is that some people think
they'll get some kind of tax benefits
or tax breaks by operating as an LLC.
This for the most part,
just isn't the case.
A single member LLC is considered a disregarded entity
and it's taxed in the exact same way
as a sole proprietorship.
So as far as taxes go,
you'll be paying the exact same amount
as a single member LLC as you would without the LLC.
In fact, you'll likely pay more
if you take into account the filing fees for the LLC
and any associated ongoing annual fees.
But you can potentially save some on taxes
by having your LLC elect to be taxed as an S corporation.
That's really the only instance
where you'll see some significant tax savings
by operating as an LLC
if you're taxed as an S corp.
Otherwise, taxes are exactly the same.
Finally, the third reason some people wanna form an LLC
is that an LLC helps to protect your personal assets
from any debts or liabilities of the LLC of the business.
This really is the best reason to form an LLC
for your service business.
Whether you're a dog walker or dog trainer,
a tutor, piano teacher, housekeeper,
there are a lot of opportunities
where you put yourself at risk of liability.
Operating as an LLC will help make sure that that risk
and those liabilities stay with the company
and not putting at risk your personal assets.
But when we're talking about liability
and risk of operating a service-based business,
what I think is even more important,
the first line of defense.
And the first thing
that I'd say you actually need is insurance.
That's right.
I am saying that in most cases,
insurance is more important than operating as an LLC.
Sure, the LLC is going to help
if somebody tries to sue the business.
In most cases,
it's just the LLC,
not you personally,
who would be on the hook for any damages from that lawsuit.
But insurance is gonna help to prevent somebody
from needing to sue the business in the first place.
Let's say you're in somebody's home.
Maybe you're a house cleaner or a tutor,
and you accidentally knock over and break a priceless,
super expensive and rare vase or vase.
You break something at your customer's house
or you're a karate teacher,
and one of your students gets injured
while you're trying to teach them
how to break a board with their head.
I think that's the thing that karate people do.
I did that when I was taking karate as a child.
Anyway, someone injures themselves.
In a lot of cases,
insurance is going to help cover to replace that item
or pay for that person's medical expenses.
If the insurance covers it,
then there's no need for that person to sue you at all.
But if you don't have insurance
and you can't pay for those costs out of pocket,
then that person is likely going to look to you
or your business to pay.
And that's where the LLC comes into play
to make sure that liability is with the LLC only
and not with you individually.
So obviously, the best thing to do
is to operate as an LLC
and have insurance for your business.
But if you can only do one,
I say insurance is far more important
and it's always best
to speak with an experienced insurance broker
who can help you determine the types of policies
you might need and the proper amounts of coverage
for your situation in your business.
The second thing you need
in order to have a successful service-based business
is a contract where the insurance and the LLC might help
in situations where you might be liable for something.
A contract helps to avoid that liability in the first place.
A well-drafted contract is going to describe exactly
what services will be provided,
and more importantly,
what isn't going to be provided.
So when your customer gets upset and says,
"You were supposed to do X, Y, and Z,
"and you only did X and Y."
You can point to the contract,
which clearly states that Z was not included.
Your contract may also include
some kind of liability waiver.
If you're a personal trainer
and one of your customers gets injured
or hurts themselves during a training session,
you can point to the contract,
which clearly states that there is an inherent risk
that comes along with exercise and weight training
and this type of physical activity
that your customer knowingly accepted that risk
and waived any liability or fault on your behalf.
Without that,
you could be on the hook for any medical bills
or other costs associated with your customer's injuries.
The last thing that you definitely need
in order to run a successful service business
is a way to manage this whole thing like,
how are you going to package your services?
How are we gonna book and schedule your customers?
And most importantly,
how are we going to get paid for all this?
There are a lot of different options for this kind of thing.
And I mean, a lot of different options.
But the problem is that some apps or programs
will do really well at one aspect of managing your business
but they lack in other areas.
And so you might need three, four or more programs
in order to get everything you need.
So many of my clients in the service business space,
the ones who sell their skill and their time
have told me about how much time is wasted figuring out
how to invoice their customers,
chasing down payments,
and figuring out who's supposed to pay what and when,
and on behalf of whom?
All of that time being spent managing their business
rather than managing their customers or developing new ideas
to improve their business or their services,
and just keep doing what they started out to do,
following a dream of a successful business
where they can share their skills for a living.
And that's where Finli comes in.
Finli is a real solution to all of these problems.
It's a comprehensive platform
that helps you run your business,
get paid simply and efficiently,
have predictable cashflow from your customers
and know exactly what it's going to cost you.
One platform that's affordable,
easy to use, easy to set up,
and gives fantastic customer service.
With Finli, you can schedule services for your customers,
send invoices and accept payments quickly and easily,
and leverage a CRM or customer relationship management tool
to communicate with and manage your customer base.
Let's take a quick look.
Set up is super easy.
Finli has an easy-to-use self setup option.
And if you need a little bit more help,
don't worry.
They're not gonna leave you hanging.
Finli offers free phone and Zoom support
to answer all of your questions.
You can create your pricing options tailored specifically
to how you want to provide your services.
Then, you build out your customizable invoices.
And then, build out your class page
to utilize the payment features
and scheduling features when needed.
This gives you a link that can be sent to your customers
or use on your website to manage payments.
They even have an app option for your customers,
which makes collecting payment even easier.
Finli has a really simple pricing model,
which I think is great.
The more predictable your cost, the better.
It's just one flat monthly fee
based on the number of customers you invoice
and a predictable cost for accepting payments.
This helps you know exactly
how much money is gonna come in each month
and exactly how much it's going to cost you.
And unlike a lot of other payment platforms,
they're not gonna hold onto your money
for an excessive amount of time.
In most cases,
that money is gonna hit your bank account
in about two days or less.
I had a chance to speak with Lori Shao,
the founder of Finli.
I was really impressed with her knowledge
of the payment space.
But even more so,
her drive to solve a problem that she saw coming up often
with service business owners.
That challenge was that a lot of payment platforms
were built for large companies and large corporations
leaving true small business owners
to cobble together a bunch of different apps and programs
to get exactly what they need.
She's built an amazing company
and continues to develop solutions for small businesses.
If you're ready to give Finli a try,
which I think you should,
you can use this link
for an exclusive 90-day free trial with Finli.
You can heads up this URL or check the description.
There'll be a link down there.
Again, for a free 90-day trial with Finli.
That's pretty great.
90 days,
I heard like 30 days, maybe 60 days,
but 90 days free trial.
That's all for this episode, folks.
Drop a comment below.
Let me know what you think.
And again, don't forget to check the description
for links to additional information and resources
or for the link to get your free 90-day trial with Finli.
Thank you all so much for watching.
I'm Aiden Durham.
And I'll see you next time.
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