Should a Start Up in the early stage be concerned about this?

[Era]

Need advice please on what would be the best to do during this beginning phase.

When you are just starting out on execution and are not ready for an LLC or Corp yet what would be the best way to handle banking so it makes it easier in the future when the business grows and is the safest for your own personal accounts. For example you need to buy X amount of product on Alibaba do you use your own personal Credit Card or do you obtain a special side card in your name just for business purchases that way it's not mixed up with your personal expenses and for CC safety reasons?

Also If you are receiving payments to your paypal is it best open a separate checking account just for this to transfer the money to or do you just transfer it to your personal account that you use for all your personal expenses?

Thoughts on handling stuff on this?

 

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[MJ DeMarco]

Until you have a sale, you don't have a business. IMO your wasting mental energy try to decide what color Ferrari you should buy.

 

[MoneyDoc]

I can't add any more value as Mj pretty much told you what you need to know.

Forget the LLC, forget banking, forget an office space, forget a new computer, GET THE SALES!

 

[Iwokeup]

Until you have a sale, you don't have a business. IMO your wasting mental energy try to decide what color Ferrari you should buy.

I respectfully disagree. It's a fair question to ask but should NOT involve a lot of time at this stage of the game. In other words, think about this and if need be (considering the individual's situation) take care of it. But don't spend much time because this is action faking at its sneakiest.

In my case (which may not hold true for the OP), I have three different entities to consider: family finances, the IWU MD "business entity" where I'm a 1099 guy and so have to be careful about this stuff, plus our software startup. It was MUCH simpler to think ahead and plan how to structure things so that there weren't any gray areas come tax time.

 

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[GuestUser113]

Need advice please on what would be the best to do during this beginning phase.

When you are just starting out on execution and are not ready for an LLC or Corp yet what would be the best way to handle banking so it makes it easier in the future when the business grows and is the safest for your own personal accounts. For example you need to buy X amount of product on Alibaba do you use your own personal Credit Card or do you obtain a special side card in your name just for business purchases that way it's not mixed up with your personal expenses and for CC safety reasons?

Also If you are receiving payments to your paypal is it best open a separate checking account just for this to transfer the money to or do you just transfer it to your personal account that you use for all your personal expenses?

Thoughts on handling stuff on this?

https://www.thefastlaneforum.com/co...te-time-and-money-playing-entrepreneur.53375/

 

[jon.a]

The answer is (as it should be) it depends.
I have done things as a sole proprietor and just used my name and existing accounts with good bookkeeping. Schedule "C" for the IRS.
We are currently forming a private holding company. For that we got a LLC with real bank accounts and everything. K1's and still waiting on the CPA's answer about 1099's or W-2's

If it's not complex, don't make it complex.

 

[Era]

@MJ DeMarco very true. Looks like it's analysis paralysis at it's best. Thanks for bringing this to my attention before it gets worse. Being able to distinguish on what is the best use of mental energy is something I am continuing to work on as it can sometimes consume the best of you. I am joining the INSIDERS very soon.

Thanks all to everyone for your input and suggestions! I do have a few sales that is funneled into my personal paypal account and i realized that I started to over analyze if that was going to cause an issue down the road. Just becoming aware that I am over analyzing the small stuff is a small step forward.

 

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[Mike.B]

Maybe I'm the contrarian here, but I think there is a tendency here to needlessly denigrate people for planning some things out. How do we know the OP doesn't have sales yet? The OP said they weren't ready for an LLC or corp yet, and is apparently not taking a bunch of unnecessary steps.

Isn't knowing how to set up Paypal and/or a business/personal account to accept payments a valid concern? I would think you might want to know some of this in advance, instead of just saying "F*ck it, this is all an action fake and I'll figure it out after the fact".

This is a far cry from picking out what color Ferrari you should buy.

 

[theag]

I was always overthinking this myself and had a German LLC idling for over a year (cost me a few hundred €). Should have started as sole-proprietor.

BUT, when I finally validated an idea my sales exploded. I was REALLY glad I already had this idling LLC, because the process here in Germany takes a few weeks.

So my recommendation is to at least have some kind of umbrella company you can use for various projects. As soon as a project takes off, put it into a new subsidiary (which is my next step).

This also has tax benefits if you eventually sell the subsidiary (at least in Germany). But I'm no expert on that, I will hire one soon .

 

[Waisec]

BUT, when I finally validated an idea my sales exploded. I was REALLY glad I already had this idling LLC, because the process here in Germany takes a few weeks.

Reading things like these always surprise me, just how different things can be in various EU countries. Over here, it takes 10 minutes to set up an LLC online and costs around 180€, quick and effortless

Granted, this process takes much longer in most countries, so I don't think it's an action fake to plan things ahead a bit. Unless that's all you're wasting your mental energy on

 

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