When I first started my own business (pre-The Essential Website), I wanted to make sure everything was set up properly so that when tax time and any other important, business-related deadlines came around, I was properly and professionally prepared.
Being that I had very little money to spend, I thought the DIY method was clearly the right decision. So, like many new/small business owners, I went onto LegalZoom to start the process of becoming an LLC.
On their website, there was an option to add yet another service or product everywhere I looked, which, of course, meant adding on more fees. I really didn’t know what I was doing, but I thought “this is supposed to be do-it-yourself and so easy…so how hard can it really be?”
I followed all the steps and then, like the good sales people they are, I received lots of follow-up emails and phone calls about a webinar I should listen to in order to help me get started. The ultimate researcher and learner that I am, I signed up for the webinar and listened attentively (for the most part).
Soon after the webinar started, I was already fading, and certain things were going way over my head. This was NOT how I wanted to be spending my time.
I strongly believe that I can do anything I set my mind to (and so can you!), but I also strongly believe that we have the freedom and power to choose the things that we do with our time and our money.We have the freedom and power to choose the things that we do with our time and our money. Click To Tweet
I have no desire to spend time learning about taxes or business formation (beyond the basic tasks I MUST do as a business owner). So why in the world did I try to do this myself, and why was I spending time listening to a webinar about something that was so utterly boring (sorry, attorneys and accountants)? Ugh! I was frustrated with myself that I was in this position and already wished I had just hired a pro to handle all of this for me.
During the webinar, it was strongly suggested that we elect what type of LLC we wanted to be. They explained the different types and encouraged us to choose one. To make sure I chose the right one, I hopped on the phone with an accountant I had used before. To be perfectly honest, he really wasn’t the type of accountant that I would normally hire for anything (I found him a bit shady). The phone call was very rushed, and he didn’t ask me anything about my business, so he advised me to be the same type of LLC he probably tells most of his clients.
Well guess what…I didn’t elect the right type of LLC for me and my business. The type I elected was potentially going to cost me more money at tax time, and it wasn’t ideal for a business of my size (small).
While in a state of frustration and confusion, I called one of my trusted attorney friends to seek his advice about the situation. At first, he actually wasn’t even sure that I needed to be an LLC. But after our conversation, he agreed that it was necessary and that I definitely didn’t need to be THAT type of LLC (that I mistakenly elected after the rushed call with the person who knew nothing about my business).
My very smart friend was so kind and ended up referring me to his personal accountant (at a very reputable firm) who guided me and fixed the entire situation for me. He answered any questions I had and was nice, professional, and extremely helpful.
During my second year as an LLC, I decided it was time to get serious and hire a professional to do the tasks that I clearly had no desire nor business doing myself. After all, my business is to make beautiful and functional websites for my clients. My business is NOT to figure out how in the heck to do my taxes as an LLC and a homeowner and now as a partner of a second LLC. No thank you!
[Update, I only have one LLC now, which certainly makes things at least a little easier. Keep reading to learn about my experience the second time around.]
After doing some research, I found a accountant who specializes in tax preparation for people just like me. I was able to gather up all my data, hand it over, and have everything done for me quickly, efficiently, and professionally while I was able to keep doing what I needed to do to run my business and make money.
Fast forward to when The Essential Website began:
We were all about doing things differently and BETTER!
When Janet and I started The Essential Website, we knew we needed to form an LLC, so there was no question that this time around we would be hiring an attorney to do the job.
We found an attorney who specializes in business formation, we provided her with all of our information, and she handled everything from there. In less than two weeks, we had our LLC, a tax ID number, and a very professional binder with all of our business documents. A huge thank you goes out to Roslyn Bazzelle of Weycer, Kaplan, Pulaski & Zuber, P.C.
Oh, I failed to mention earlier that going through LegalZoom, contacting that first accountant for advice, discussing the situation with my friend, and ultimately fixing the situation with the help of another accountant took a very long time. It also took a long time to explain to my new accountant why I was one type of LLC and then another…and it involved him preparing two different types of tax returns, which meant two hefty invoices.
With the attorney who set up our LLC, every bit of communication was done via email, and it could not have gone any smoother or easier than it did. And the best part is that we have someone we can call upon if we have questions, if we want to trademark our business, and if we need to form another LLC at some point.
We were able to keep working our business while an attorney – who does this sort of thing every single day – handled this extremely important task for us. No stress, no bad decisions, and no wondering if we’re choosing the right things or not.
Best. Decision. Ever.Hiring a professional: Best. Decision. Ever. Click To Tweet
Now, the first thing you might be asking yourself is this: “But what if you don’t have the money to hire an attorney to set up your LLC or another type of professional to handle a certain task?” Well, this is a prime example of the age-old saying, “sometimes you gotta spend money to make money.”
Sidenote: An LLC may not be needed for every type of business. You may decide to set yourself up as a Sole Proprietor (like Janet did with her first business) or some other business type. This is another reason to consult a professional, as they’ll be able to help you make the best decisions for YOUR specific business.
If we would have spent our own time trying to do this ourselves just to save a few dollars (because using LegalZoom really isn’t that much less expensive) we would have utilized time that could have been spent on client work. Work that pays the bills! Our new business didn’t have any money yet. But, it would take a lot longer to make money if we spend our time doing things that are not in our area of expertise.
We do not advocate going into debt by any means. Mark our words! However, it is no secret that businesses typically have to invest some money up-front before their business really gets going in order for their business to actually get going.
For brick and mortar businesses, this usually involves getting a loan. For a virtual business with very little overhead, it might mean putting an expense on a credit card and paying it as soon as income starts flowing in.
The bottom line is that everything has to be weighed. The pros and cons of doing it yourself vs. hiring a professional. From the fees to the time involved to the convenience. Not every single situation will require hiring a professional, but for the things that you either don’t want to do, don’t know how to do, or don’t have the time to do, that’s when it is VERY worth it to hire a professional and spend the money even when you don’t have it yet.
While this may be a story about business formation and taxes, it really applies to how you handle any aspect of your business that is outside of your main area of expertise.
For instance, if you are a new business owner, you may be thinking that you should wait to have a website until you bring in some money. But, think about the negative effects that may result with this strategy:
- people may not be able to find you
- potential clients or customers may not be able to contact you
- you may lose credibility since most of your competitors have an online presence
All of the above have the strong potential to help you MISS OUT on revenue!
To help you wrap your head around the cost of web design, here are some tidbits to ponder:
If you spend too little or too much on your website before your business starts, you may not be making the best decision for your business from the get-go. I would be just as skeptical of a 5-figure quote for a basic, informative, brochure-style website as I would be of a 3-figure quote. It’s not to say that the 5-figure quote is outrageous. It may just be too much for what you need when you’re in the beginning phase of your business. Plus, if a fancy, expensive website doesn’t include additional ongoing maintenance, you may have spent your entire marketing allotment up-front and have nothing left over…or you’ll find yourself lost and have no clue what to do with your website (and no money to hire anyone to help you).
On the contrary, if you look around the web to try to find someone to build you a professional, mobile-friendly website for under $1,000, you may be looking for a long time or you may have to spend your time weeding through hundreds of bidders on freelancing sites like Elance and Upwork (because that’s where the under $1,000 folks tend to hang out). Again, there is nothing wrong with this if you have that kind of time on your hands to research, get references, etc. Or, if you want to risk having someone who charges so little handle the creation of your professional online presence.
Have you gone the DIY route before and wished you hadn’t? Did something not-so-great happen as a result of DIYing it? Have you ever taken the cheapest option only to find out that the middle or most expensive option would have been much better in the long run?
I’d love to hear from you!