John: Hey, this is John Sonmez from simpleprogrammer.com.
I’ve got a question here today that I'm going to have to give my little legal disclaimer
again.
This one is about actual law about legal entities or about business, but I thought I’d answer
this question.
Before I answer this question, I'm not a lawyer.
I just play one on TV.
I'm not a doctor, surgeon or any of those things so I'm not giving you medical advice,
I'm not giving you legal advice, I'm just giving you my own advice and so you can take
it or leave it.
With that said, here’s the question.
This question is from Alex and Alex says, “Hey John, first congratulations on the
Joel Test for Programmers blog post.”
Just in case—what Alex is talking about is I did this blog post on the Joel Test for
Programmers and it ended up being front page hacker news.
It was like the top post on Hacker News so it got like 150,000 page views in like a few
days which was pretty crazy.
Thanks for that Alex.
That was pretty cool.
Alex says, “I have picked my niche.
It’s SignalR.”
Alex is responding actually to my blogging course which tells him to pick a niche, which
I always say specialize, right?
That’s good, Alex.
He says, “I do have a couple of questions for you that I thought I might be able to
find on entreprogrammers.com” which is my podcast for entrepreneur developers, “But
I couldn’t.
I have a day job.
I also freelance on the weekends and now I’m going to start a blog and maybe one day take
in revenue from the blog.
I’m going to start an LLC?
And report earnings for freelancing in the blog to the LLC filed under my SSN.
“Also, I’m going to build a site similar to kayak.com but not for flights or rental
cars that will mine data or other websites for the best deal.
The revenue will come from ads and referrals.
Should this new site be under the first LLC?
Can I later move this site under a separate LLC if it takes off?
Should it even be an LLC?
Is there any risk of just getting this site up and seeing if it makes more money than
the hosting feeds before I spend money on registering an LLC?
I’m guessing you already have these answers out there in a podcast somewhere because you
are a freak of nature and have a podcast for everything.”
Thanks Alex.
I don’t think I’ve really addressed this one.
Maybe I’ve talked about this a little bit but this is kind of an interesting discussion
of whether or not—what should you do.
Again, just so I’m perfectly clear, I’m not a lawyer so do not take this as legal
advice and then structure your company this way and then sue me if it all blows up and
it doesn’t work out.
I’ll give you my take on what I think about this.
I try to keep things as simple as possible.
Obviously my tagline is, “Making the complex simple.”
The simplest thing—well, I’ve talked about this a lot in videos and stuff is that that
people have all these great ideas but then they lack execution.
I’ve also talked about the idea that you spend a lot of money on all kinds of stuff
and then you never actually execute.
I tend to be a person that says go and do the thing first and then figure out the details
later, buy the company, buy the paperwork, do all that kind of stuff later.
If you’re trying to start a business, if you’re going to set this site up, this web
application you’re going to make money from ad revenue then go and do it and start making
some money.
Until you make money you have no problem, right?
You don’t have a real issue so you shouldn’t really invest a lot of money in a legal structure
for the business if one, you’re not going to make any money from the business and two,
you might not even carry it out.
We all have these dreams and ideas and my idea has changed from week to week.
Hopefully I execute on a majority of them or some of them, but some of them don’t
get executed on.
A lot of times people will spend a lot of time researching legal entities and structures
for a business that they never actually are going to build and worse yet a lot of times
when you start off at something you have some energy and some motivation to get something
done and you can waste all that talking to lawyers and accountants trying to set up legal
entities for businesses.
Don’t waste all that.
Try to start with the simplest thing first.
The simplest thing is getting your website up and trying to get some customers and test
the idea.
Once you have a business or once you actually have income coming in then you can worry about
that.
In fact, not only can you then worry about it but let’s say you’re making money from
this business then you can actually afford to hire someone a lot more professional than
I am to give you advice on legal entity for the business, just don’t get ripped off.
Just be careful on that.
That’s the idea.
Just start simple.
Don’t worry about all this stuff.
For now if I were just going to tell you the simple road that I would advice is just set
up one LLC and have everything be under that one LLC and that’s it.
I mean that’s what I do even at the level where my business is making a decent amount
of money now I still have just one LLC.
I don’t find the need for a more complicated legal structure.
Now, maybe I’m doing things wrong.
Maybe I should—but you know what, so far it hasn’t been a problem for me.
I can’t really foresee why it would.
Maybe in the future as I grow and grow then I’ll change things.
But I think just having a simple LLC that all of your business stuff happens under is
a real simple approach.
I’ve got a professional accountant.
The accountant doesn’t seem to have a problem with it.
It makes a lot of sense to me.
It doesn’t require a whole bunch of paperwork and overhead so keep things simple.
That’s what I would say.
Yeah, hopefully when you do reach the point where you’re super successful and you’ve
got a multi-million dollar business then you can afford to pay for some real legal advice
that will help you to structure your business in the way that’s going to work the best
for you.
All right, well, hopefully that is helpful to you Alex and to any of you watching out
there.
Remember, just go out there and execute, do something.
So many people get stuck up in all these questions about how to do things and they never actually
do it.
Not saying you shouldn’t do your due diligence but just make sure that you air on the side
of execution versus anything else.
If you have a question, email me at john@simpleprogrammer.com.
If you like this video share it, thumbs up it and definitely, definitely subscribe.
Talk to you next time.