Mistakes Happen

Update

I'm sorry for taking so long to update my blog. I am someone like many others who suffers from severe depression and anxiety. This means I have both good days and bad days. Last month I had way more bad days than good days which caused the delay in posting. I know that I am only giving excuses but I'll try my best to stay consistent. I will do my best to stay on track with my month-to-month posting goal.

Disclaimer:

Everything I say is my opinion. I am by no means a lawyer or a business professional as I’ve stated plenty of times. Everything I say in this post is based on my own experiences and advice given to me by those more knowledgeable in this subject than me. Please feel free to correct me on any details I may have gotten wrong or leave a comment expressing your feeling on what I have said. Please keep all discussions cordial and kind. I have an open mind to others opinions but I will not read them if they are rude or hateful.

Let's Be Kind To Each Other

We may be different but that doesn't mean we can't get along.

LLC

Starting a business isn’t as straight forward and simple as you think. Even the seemingly littlest things can mean something very important later. Even after doing plenty of research, it’s still at times not enough. For starters when deciding on how to make my business official I thought obtaining an LLC is the right and only way to do so. I soon learned the hard way that, that isn’t the case

From what I understood so far, the best path for me to take with my small business was to be a sole proprietor. Meaning I am the sole owner and employee of my business. I wasn’t sure how to be a sole proprietor officially and after some google searches, I kept being referred to an LLC. So, I assumed that having an LLC was an important step to become a sole proprietor. It wasn’t until this past month when I saw a random YouTube video I was watching while continuing my business research that I found out that an LLC is not mandatory when you decide to become a sole proprietor. Though If you decide to avoid obtaining an LLC you will need a resale license to sell your products online or outside your house, as well as at markets and conventions. The resale license is needed to be able to tax your products. The tax obtained through selling your crochet will be paid back upon filing your taxes so keep all invoices and keep track of all taxes obtained through purchases no matter where you sell your goods. In my state of Pennsylvania depending on what you are selling, if you have an LLC a resale license is not needed. I instead can invest in a vendors license which has a perk that consists of getting discounts on yarn or other materials when I buy in bulk. A vendor’s license from what I understand is not mandatory but is a good idea to have if you’re the type to buy in bulk.

As part of owning an LLC, it is recommended that you have a separate banking account as well as an EIN number but as a sole proprietor I don’t have to have an Ein or use a separate bank account. However, I recommend you at least set aside a savings account for your business so that you can keep better track of necessary funds needed for tax filing. Having an LLC has its positives since its whole purpose is to separate you from your business and is a way to protect you from any possible legal issues in the future. If someone decides to sue you for one reason or another they will only be suing your business and not you personally, meaning all of your personal assets such as your house would be safe. You can file for a sole proprietor LLC which is what I did. So, it wasn’t a total loss after all is said and done but that doesn’t change the mistake I made in how I filed for my LLC.

Keep Calm

Every mistake has it's solution.

Mistake After Mistake

First, I should start at the beginning when I was trying to create my first crochet business website. I did a lot of research on what website builder to use and start with. I eventually settled on Hostinger which was the first mistake I made in this situation. Hostinger at first was amazing. It was a simple but detailed website builder. It was very customizable and I felt completely in control of my website. I loved all the options and the many settings I could customize. Once I finished setting up my website, I was so proud and excited. I couldn’t wait to sell my first item. I launched the website and spread the word to my closest family and friends. I was so sure everything was going to work out great until…

My first customer was a family friend. One day she contacted me to let me know that there was an issue with the checkout part of the website. When making a purchase there was no place to put her address. There was only one place to put your city and zip code and when my friend would do that it would show an error message making it impossible to complete the transaction. I of course panicked and worried that she wasn’t the only one that experienced this but didn’t speak up about it. I immediately contacted my family and friends and told them not to use my website until I get it fixed. After a lot of troubleshooting and not finding any answers online. The only info I found that could be somewhat related to this issue was on google where it mentioned a similar issue can occur if you don’t have an LLC or are not legally listed to sell online. So, with no other answers I finally made the decision to get an LLC. This is also when I looked more into being a sole proprietor and kept being redirected to buying an LLC. So I did. I went through LegalZoom which was my second mistake.

Learn From Your Mistakes

It's ok to make mistakes and waddle your way to your goal

LegalZoom

LegalZoom is a money trap. When you click on their website it says $0 + filing fees. Don’t let that fool you. By the time I finished filing my LLC I had already spent over $500 and they still wanted much more from me which I will get to. Upon filing it is $0 at first but the filing fee’s I paid without the rush option was around $200. After that they started asking questions and telling me that there were other mandatory things I needed to complete my LLC such as a registered service agent, which can be anyone including yourself. A service angent is the person who will maintain and keep track of your finances and account books. This is something I didn’t know about which of course is my fault, but Legalzoom gave me only two options which was to use their service or input someone else with proper qualifications which confused me and made me believe that I needed a professional which isn’t the case. In my opinion it was very misleading. I was also charged for an EIN number which is understandable but not long after completing the transaction legalzoom called me to inform me that I needed to pay another $200 for something related to my EIN that they said is needed for my LLC. They added me to unnecessary subscriptions and kept asking for more money.

At some point they asked for $3000 a year for an accountant team for me. At first, I thought it made sense since I was lacking in knowledge about taxes and business finances. However, as I was talking to them, they were saying things that didn’t make much sense to me such as something about filing some sort of Tax related things to the IRS every month which didn’t add up to me but I thought it was something I was unaware of. He also said that there was a time limit on something to do with the IRS and my taxes so I needed to rush and obtain there help. After thinking it over I realized that perhaps everything he said wasn’t the full truth or maybe even exaggerated. Then when he told me the price, which was coincidentally on sale by the way I told him at the time I didn’t have that much money on hand. He then started saying a lot of red flag things. First, he made me feel pressured as if I had to get it now or it would be too late. Then he mentioned opening new credit cards to pay for it now and tried to convince me on why that was such a great idea. When I expressed my hesitation about that he then told me to ask my family and friends for help. At the time while on the phone with him, I didn’t think much about what he was saying. I even asked him to give me a week to think about it but he insisted on talking in the next day or two. After sleeping on it, I noticed all the red flags and realized it was a bad idea to consider. For those who may jump to the conclusions that this wasn’t LeagalZoom but a scammer instead I have to say that they presented themselves as legalzoom associates and emailed me through the legalzooms name. Please, before you get an LLC if you think that is the best path for you do not rush into using a company. I’ve been advised later that filing directly with your state or county is not only the safest but also the cheapest way to obtain an LLC. Don’t make the same mistake I did and waste hundreds of dollars on something you can get much easier and cheaper.

As for my website on Hostinger, the problem turned out to be a region issue. Hostinger is a Europe based web builder. One thing no one mentioned when reviewing it. Because it’s Europe based, United states address’ don’t work on the website. In the end I switched to Squarespace and haven’t gone back since.

Stay Positive

Even a negative can turn into a positive

Conclusion

The most important things I want you to take away from all this is:

1. Do not rush into an LLC. It is not mandatory unless you have plans to employ others or are in a partnership. If you are a sole proprietor and still want an LLC for legal security, make sure you file for a sole proprietor LLC.

2. When choosing a web builder look as deep as you can into it. Though my personal recommendation is Squarespace

3. When starting your website. Share the link with close family and friends first so if anything does go wrong it won’t affect your business name. When your sure everything is perfect or close to it then start spreading the word beyond family and friends and out onto your social media.