Ep. 44 | Why Having an LLC Is More Important Than Ever in 2024

There's no question there has been a shift in the online space in 2023. So what does that mean for your legal strategy going into 2024? More buyer hesitancy means it's more important than ever to look professional, sell with confidence, and protect what you're building - by having an LLC for your business.

Ready to create your LLC? Join the LLC Bootcamp on February 21 and 22 to learn all the steps to get your LLC up and running yourself. Presale tickets are on sale now through February 11 at artfulcontracts.com/llcbootcamp

If you're an online business owner who’s ready to take the guesswork out of the legal aspects of your business, watch my free training to learn the 3 steps to get your business legally legit without hiring a lawyer. Let’s get the legal stuff covered so you can grow your business with confidence. Go to artfulcontracts.com/legalclass to sign up.

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Full show notes at artfulcontracts.com/podcast

Transcript

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Hello, my friends. Welcome back. We took a little break in December to recharge and take some time to plan for this year. And now we are back better than ever. I am usually kind of conflicted on the new year because it doesn't feel new because we're still in the dead of winter. The season hasn't changed. It's still dark out. So spring, personally, for me feels really a lot more like a reawakening. But the calendar still exists. And I really can't argue that in terms of business, it's a great time to reevaluate strategy, look at what worked last year, make a plan for the upcoming year, set goals, and really decide how you're going to move the needle going forward. So this has been a big time of reflection and planning. And of course, now everyone is talking about what's going to be new and different in 2024. Because as we have felt, last year the market has changed. A lot of things feel different about online business. So that brings me to today's topic. I want to talk about why creating an LLC for your business is even more important now in 2024 than it has been in the past. Let's dive in. Alright, let's start off with just a little reminder on what an LLC is and why it's important to have an LLC for your business. So an LLC stands for Limited Liability Company and it is a legal business structure for your business. It determines the laws that apply to your business and how it's treated legally. What that means for you is basically when you form a business, when you start selling something, but you don't do anything to necessarily create the business entity or create a separate legal structure for it, if you just go out there and offer services, you are a sole proprietor. And that means in the eyes of the law, there is no difference between you personally and your business. So if someone sues your business, that means they're suing you personally. And the pool of assets that they have access to if they win that lawsuit includes everything that you own personally. That could be your savings accounts, your checking account, your house, your car, your retirement accounts, even your future income or your current income if you have a nine to five still. All of that is up for grabs in a lawsuit if you don't have an LLC. So that's the primary benefit of having an LLC is that it separates your business from you as a person. So your business becomes a separate legal person from you and your business can enter contracts, have debts, provide services, and get sued entirely separate from you as a person. So if your LLC, if your business gets sued and you have an LLC, then the only assets that that lawsuit can touch are your business assets, your business checking account, your business savings account, anything that your business owns. All of your personal things are safe. That's the number one benefit of having an LLC. It separates you from your business so that if your business gets sued, your personal money is safe, and vice versa. If somebody slips on the sidewalk in front of your house and sues you, they can't own your business. They can't take from your business checking account for that lawsuit. So that's the main reason that people form an LLC, but there are other kinds of side benefits that go along with it as well. Things like professionalism looking like a legitimate business when you put yourself out there. You're not just Joe Schmoe down the street. You are a business owner, you are a company with a legal business entity, and you just look a lot more professional. And it really also helps you from a mindset perspective. You not only look more professional on the outside, but you end up feeling more like a business owner. There's a different mindset that goes along with being a business owner than there does with being a freelancer or being someone who has a side hustle. It really can help foster that identity shift and put your mindset into a better place to make strategic decisions for your business and to feel legitimate, to feel confident going out there and selling your offers. And I think all of these things combined are reasons. They've always been reasons you need it, but it is even more important this year. Here's why. 2023 was a challenge for a lot of online business owners. People talked about how 2021 was hard, uh, but it only got worse, right? People have less money to spend. People are being a lot more cautious with where they put their money, who they trust. They've been burned a lot, and there's a lot more trust required before people make purchases. And that means that that professionalism that comes with having an LLC and seeing yourself as a business owner, that confidence that comes with that, those are no longer optional. They are a requirement for earning your customers' trust when people are so much more hesitant this year. And beyond that, with higher hesitancy, with less money to spend, people are going to be number one, more cautious of what they buy, but then on the back end, they'll have higher expectations and higher standards for what's acceptable. And that could mean potentially more issues with chargebacks or refunds or even lawsuits because people are just gonna be tighter with their money. And that means that if you fail to meet their expectations, they're gonna do something about it. There's gonna be a lot less of just letting it slide if something goes wrong. And that's where the LLC comes in to protect you. So it's on both sides of that customer journey beforehand, looking more professional, but also after the purchase, having that protection in place. Now, a big trend that I have been seeing in the online space this year is this, or going into this year, is this focus on personal brand. And so I'm sure some of you are thinking, well, how can I maintain that deep connection with my audience, build that trust if I'm hiding behind this LLC, if I'm hiding behind this business, then they can't have that connection with me as a personal brand. So how does that work? And I totally get that. I think going deep with your audience, having more personal connection is what's going to foster that trust this year, especially, and it is more required than ever. But I don't see any conflict there. I don't think having an LLC prevents you from doing that at all. You can still have an LLC and have a personal brand. It's just a brand that is protected by an LLC. It doesn't have to make you act any more impersonal, it doesn't have to create a barrier. That's that's your choice. Great example here is Amy Porterfield, Marie Forlio, Jenna Kutcher, they all have legal business entities, even though they're personal brands, they use their name as their business name. That doesn't stop them from being personable. That doesn't stop them from using their identity and their personal brand to build their trust, build their audience, all of that. And that just goes to show you you can have an LLC that has the same name as your name. If you're really our personal brand, you don't have any other business name, you can still just do your name, comma LLC as your business name. And then your Instagram handle can still be your name, your website header can still be just your name. It doesn't change any of that. Or you can do what I do. My business name is Artful Contracts, but you're still hearing my voice right now. You still see my face over on my Instagram, you're still seeing my life and my stories. Like that doesn't change. Just the name of the business doesn't change that I'm the face of the brand. And if you already have an established business as a sole proprietorship, if you've been running your business for a while but never formed your LLC, you can still make that transition now. It's never too late. And it won't have to change anything about your branding or the way that you show up. Except that it gives that peace of mind, it gives that professionalism, it gives you that mindset of being a business owner. So if forming your LLC is part of your 2024 legal strategy, I have something exciting coming. I'm hosting a two-day workshop in February. I'm calling it the LLC Bootcamp, and this is going to be a two-day live workshop, 90 minutes each day, to walk through all of the steps to get your LLC up and running this year. It'll be live with lots of time for QA, and you'll get access to the recordings. We'll have some checklists and worksheets to go help you go through that whole process and make sure you have all of the steps down. Tickets for the workshop are on sale now. You can find the link down in the show notes or go to artfulcontracts.com slash LLC Boot Camp. And the pre-sale price for those tickets is on until February 11th. And then the price is going up to full price. The boot camp itself, I should say, is February 21 and 22 at one o'clock Eastern. And if you can't make it live, you do have access to recordings. If you have any questions about whether it's actually the right time to form an LLC for you, anything about the LLC boot camp or other topics you'd like to hear about on the podcast, feel free to send me a DM over on Instagram. My handle is at artful contracts. I love hearing your feedback. And otherwise, I will see you next time.