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Published on:

7th Feb 2022

Business Structures for Artists

Before you can start a business, you need to know what the legal structure of your business will be. Your decision should be based on which legal structure best suits the life you want to live and the way you want to run your business. Does it make more sense to be a sole proprietor, or do you need the tax breaks and protections of an LLC?

In this episode, you'll learn what these types of business structures are, and how they work for artists:

  • Sole proprietor
  • LLC
  • S-Corp

Make sure you read all the local and regional regulations pertaining to business types in your area.

Learn more about how to think like an artist on The Artist's Forge, and join our growing community of artists on Facebook.

Want to know more about the hosts?

Nicole York

Matt Stagliano

Cat Ford-Coates

Bassam Sabbagh

Bekka Bjorke

Transcript
Matt Stagliano:

Hi, this is Matt Stagliano and thanks for being

Matt Stagliano:

part of the artists Forge. We're a community of creatives who

Matt Stagliano:

help each other think like an artist. By discussing creativity

Matt Stagliano:

as a process instead of a skill or a talent. We believe everyone

Matt Stagliano:

has what it takes to create something amazing. We just need

Matt Stagliano:

some encouragement and inspiration along the way. What

Matt Stagliano:

you're about to hear is a live recording of one of our daily

Matt Stagliano:

discussions on the clubhouse app. If you like what you hear,

Matt Stagliano:

I encourage you to join our private Facebook group, or visit

Matt Stagliano:

us on the web at the artist forged calm. Now on to the show.

Nicole York:

Good morning to everybody. And welcome back to

Nicole York:

morning walk and talk with the artists Forge. Plus, Dustin

Nicole York:

today, I'm glad to have you with us and excited to keep on

Nicole York:

chatting about business. And so far, we've talked about the

Nicole York:

philosophy of business, how we figure out why we want to run a

Nicole York:

business and what we wanted to do. We've talked about our non

Nicole York:

negotiables, some of the building blocks that we can put

Nicole York:

in place to help define our business, give it direction, and

Nicole York:

put the boundaries on what we will do as a business and what

Nicole York:

we won't do as a business. And today we're going to talk about

Nicole York:

some of the first initial steps in actually moving toward

Nicole York:

structuring this business. And that is business type. So what

Nicole York:

type of business are we going to open? And this is the very

Nicole York:

foundational level, this is not asking ourselves, you know, how

Nicole York:

I want to structure my sales process or anything like that.

Nicole York:

That conversation is tomorrow. Today's conversation is, what

Nicole York:

type of business am I going to run from a legal perspective? Am

Nicole York:

I going to be a sole proprietor? Do I want to run an LLC, we are

Nicole York:

not really going to talk about an escort because I think for

Nicole York:

most photographers, that's just never going to apply to you. And

Nicole York:

if that's something you want to do more research into, I suggest

Nicole York:

you go to your local small business administration. And,

Nicole York:

and, and chat with him about that, because they will give you

Nicole York:

a lot of really fantastic detailed information. But we're

Nicole York:

going to look at these two particular types of business,

Nicole York:

the legal types of business, what the differences are between

Nicole York:

them, and why you might choose one or the other. And we'll

Nicole York:

start with sole proprietor because this is where the

Nicole York:

majority of photographers generally start out. And you

Nicole York:

have to check with your own local codes. This varies not

Nicole York:

only by state, but by country. So check those things out. But I

Nicole York:

would love to hear from the mods today, which I have to make

Nicole York:

mods. I'd love to hear from you guys today, what your decision

Nicole York:

making process looked like when you were very first getting

Nicole York:

started. And trying to decide how do I structure myself here

Nicole York:

like legally? Who is this business? Does this being a sole

Nicole York:

proprietor make more sense as being an LLC make more sense?

Nicole York:

And how did you come to those conclusions?

Cat Ford-Coates:

Um, I was a sole prop for a long time. And

Cat Ford-Coates:

actually, I was an S Corp for a hot minute. And restructured and

Cat Ford-Coates:

came down into an LLC, because an S Corp was getting way ahead

Cat Ford-Coates:

of myself. But the reason I went to S corp and then away from it

Cat Ford-Coates:

is an S corp requires a board and the board don't have to be

Cat Ford-Coates:

owners. But you do have to have a board that makes decisions

Cat Ford-Coates:

about your business at least once a year. And when I sort of

Cat Ford-Coates:

shifted things at the beginning of last year and came back down

Cat Ford-Coates:

to an LLC. It was because like no, like, even though I have

Cat Ford-Coates:

associated photographers and moving forward, I'm not

Cat Ford-Coates:

interested in bringing on investors and shareholders and

Cat Ford-Coates:

all the things. But I wanted the protections that an LLC would

Cat Ford-Coates:

give me as a sole prop. Like, you know, you have almost zero

Cat Ford-Coates:

protection. So if somebody stumbles over a cable at a

Cat Ford-Coates:

wedding or in the studio, they can take my house. And so I

Cat Ford-Coates:

wanted the protections that an LLC will give me over being a

Cat Ford-Coates:

sole prop and then I didn't want to have to deal with the board.

Cat Ford-Coates:

So yeah, that's the

Nicole York:

sure and that makes a lot of sense. So you said when

Nicole York:

you very first started out you were a soul. Yeah. And so when

Nicole York:

you were making that decision was that just kind of this is

Nicole York:

the first thing that gets me off the ground or did you have any

Nicole York:

kind of rationale behind why that would work for

Cat Ford-Coates:

I didn't want to pay the $225 fee for being an

Cat Ford-Coates:

LLC

Nicole York:

legit Yeah, I could I can feel that. Okay, cool. So

Nicole York:

that's, that's some really fantastic examples. And I'm glad

Nicole York:

you did at least bring up the Escort thing I really doubted we

Nicole York:

would have anybody who just bothered to go in that

Nicole York:

direction, just because of what you said. I think most of us

Nicole York:

kind of cringe a little bit at the idea of like, having to have

Nicole York:

a board. But, uh, I'm glad that you brought that up, because it

Nicole York:

gives folks a little bit better of an idea of what that might

Nicole York:

look like. Well, and

Cat Ford-Coates:

with an escort to there are some pretty

Cat Ford-Coates:

significant tax benefits, which was my original reasoning, but

Cat Ford-Coates:

after, you know, working with an accountant for a while, you

Cat Ford-Coates:

know, you can take those same tax benefits as an LLC, you

Cat Ford-Coates:

know, and kind of go down that situation instead of like, full

Cat Ford-Coates:

S corp ridiculousness. So

Nicole York:

for sure, very cool. Okay, Matt, I noticed you

Nicole York:

had also unmuted so what did the process of choosing what type of

Nicole York:

legal business you wanted to?

Matt Stagliano:

Yeah, I wandered into it with really not a lot of

Matt Stagliano:

information, didn't know what I wanted, but I know I want it to

Matt Stagliano:

be legit. And I'm throwing air quotes, like everybody in the

Matt Stagliano:

room can see them. I want it to be legit, and have some level of

Matt Stagliano:

protection. And I knew that if I just did things on my own, and

Matt Stagliano:

just tried to kind of wing it, that I wouldn't, I wouldn't feel

Matt Stagliano:

like I was protected, should something ever go wrong, even if

Matt Stagliano:

I had insurance. So I also looked at it saying I didn't

Matt Stagliano:

want to just have one company, I wanted to have several companies

Matt Stagliano:

under an umbrella LLC, and then use DBAs or doing business as to

Matt Stagliano:

parse out the different brands, or the different businesses that

Matt Stagliano:

I have. So I did build an umbrella company LLC, and then I

Matt Stagliano:

filed for two DBAs. Underneath that, since I'm still the only

Matt Stagliano:

owner and the only only employee, I would be, you know,

Matt Stagliano:

still the singular person in charge of everything and

Matt Stagliano:

responsible for everything. But I wanted to allow for these

Matt Stagliano:

different brands to grow. And if need be branch them off at some

Matt Stagliano:

time down the road. But having that umbrella LLC, which is what

Matt Stagliano:

gets filed for taxes, and then having the DBAs allowed me a bit

Matt Stagliano:

more flexibility in what I was trying to do when I first

Matt Stagliano:

started building the business. Now that stone tree has grown

Matt Stagliano:

and I'm looking to hire employees, um, teetering on that

Matt Stagliano:

edge of LLC and escort but like Kat was just talking about, even

Matt Stagliano:

though that there are some tax benefits, I'm just not ready to

Matt Stagliano:

get into all the formality of an escort.

Nicole York:

Okay, cool. That makes a lot of sense. And I'm

Nicole York:

just gonna define a couple terms really quickly, just for folks

Nicole York:

who might not have heard of them. a sole proprietor is

Nicole York:

exactly what it sounds like. It just means you you are doing

Nicole York:

things that people will give you money for. It's pretty simple.

Nicole York:

It requires almost no effort to get off the ground. And even

Nicole York:

though you technically can keep the money that you earn as part

Nicole York:

of your normal banking system, of course, it's always suggested

Nicole York:

that you set up a separate account and run your business

Nicole York:

funds through a business fund and not through your own

Nicole York:

account. So you can keep track of things that way and handle

Nicole York:

your taxes that way and just keep your business money

Nicole York:

separate. But technically you don't have to, at least in

Nicole York:

Washington State. So look into that. But sole proprietor is the

Nicole York:

easiest way to start a business. That doesn't require really any

Nicole York:

additional effort. But it has its hangups, like Kat said, you

Nicole York:

obviously are tied into your business in an intimate way.

Nicole York:

Which means if you make a mistake, if a client decides to

Nicole York:

come after you or sue you, your personal assets, or your are

Nicole York:

tied into your business as well. So if if they want to, they can

Nicole York:

take your house. And for a lot of people, that's a scary thing.

Nicole York:

So that is a sole proprietor, and LLC means a limited

Nicole York:

liability corporation. And it's exactly what it says it limits

Nicole York:

the liability of the business, it doesn't include you the

Nicole York:

business becomes its own separate entity. And so your

Nicole York:

finances now are not tied into the business, you are basically

Nicole York:

getting paid like an employee does, even though you are the

Nicole York:

owner of the business. And then, as Kat mentioned, the S corp

Nicole York:

moves one step beyond that into farther into incorporation,

Nicole York:

where you now are incorporating a board. And then a lot of

Nicole York:

people will also have investors and things like that, but the

Nicole York:

board is really the important part. And then there's some

Nicole York:

additional tax benefits, like she mentioned and all of that

Nicole York:

good stuff. So if you need more detailed information, absolutely

Nicole York:

please google that go go look up the differences, particularly

Nicole York:

where you live. But those are the kind of broad categories

Nicole York:

that we're talking about. And you're obviously getting a lot

Nicole York:

more information Just by listening to folks talk about

Nicole York:

the way that they went about choosing whether to be a sole

Nicole York:

proprietor, an LLC, or an S corp. So those are kind of some

Nicole York:

broad simple definitions. But some Becca, Dustin, did you guys

Nicole York:

go through this process? And how did you come to who you want to?

Bassam Sabbagh:

Yeah, good morning, everyone. So I live in

Bassam Sabbagh:

Canada in the province of Quebec. So some of the things

Bassam Sabbagh:

are completely some of the laws and ways to go about this are

Bassam Sabbagh:

different. And I'm honestly not sure. If we have the equivalent

Bassam Sabbagh:

of the LLC versus the S Corp. I know we do have sole

Bassam Sabbagh:

proprietorship. And then you have a corporation, which is an

Bassam Sabbagh:

incorporation Inc. So I would assume Inc, is the equivalent of

Bassam Sabbagh:

an S corp and mistakes. Would anybody know? So an S corp?

Bassam Sabbagh:

You're actually incorporated, right?

Matt Stagliano:

That's a question. Yes, yeah, that would

Matt Stagliano:

be the equivalent.

Bassam Sabbagh:

Exactly. So so when I started my business in

Bassam Sabbagh:

2016, I knew I was going to be doing multiple things, but

Bassam Sabbagh:

specifically photography and business consulting. And I

Bassam Sabbagh:

wanted to, there was a whole bunch of advantages for me to go

Bassam Sabbagh:

full incorporation, which is the equivalent of the Escort under a

Bassam Sabbagh:

kind of a numbered federal business name. But doing

Bassam Sabbagh:

business as three separate things. One of them is curious

Bassam Sabbagh:

photography. The other one is I put my name there, but Psalms

Bassam Sabbagh:

about photography. And then I have one for my consulting

Bassam Sabbagh:

called, and tandem business advisors. So holding company, or

Bassam Sabbagh:

at least incorporated company three, doing business as names,

Bassam Sabbagh:

brand names, or names. And one of the reasons I did it is

Bassam Sabbagh:

because there was a, a very big tax advantage for me, it's

Bassam Sabbagh:

Quebec and Canada, we have very high taxes, personal taxes are

Bassam Sabbagh:

about, you know, when you start making over 150,000, or whatever

Bassam Sabbagh:

it is, it gets to be 50 52% in taxes. So there's a huge

Bassam Sabbagh:

advantage of being taxed at a business where you can keeping

Bassam Sabbagh:

the money in the business. But also, there was for about two to

Bassam Sabbagh:

three years at the beginning and advantage of how I pay myself by

Bassam Sabbagh:

paying myself through dividends, I can share money with my

Bassam Sabbagh:

children and my wife, and if they are low income earners,

Bassam Sabbagh:

such as my children, they are taxed under there, I can pass

Bassam Sabbagh:

dividends to them. And basically, they give me the

Bassam Sabbagh:

money. So I saved a lot of money in the first couple of years by

Bassam Sabbagh:

taking out money through dividends. Now to do that,

Bassam Sabbagh:

there's a cost, and I had to pay, you know, more accounting

Bassam Sabbagh:

fees, I had to pay lawyers. And just getting back to cats.

Bassam Sabbagh:

Comment about having a board? Yes, I do have a board. I'm on

Bassam Sabbagh:

the board, Mike, my mother in law's on the board. And I pay

Bassam Sabbagh:

lawyers about four or 500 $450 a year to do the four or five

Bassam Sabbagh:

pieces of papers that need to be done once a year to pretend we

Bassam Sabbagh:

had a board meeting and we took decisions and we both signed

Bassam Sabbagh:

them and we follow them with the government. So it's as simple as

Bassam Sabbagh:

that. Obviously, it can get more complicated, but there's a cost

Bassam Sabbagh:

attached to it. One question I want to ask just for my own

Bassam Sabbagh:

information under an LLC in the United States, do you still have

Bassam Sabbagh:

to file have an account a third party accountant file financial

Bassam Sabbagh:

statements on a yearly basis? Or is that only required an escort?

Bassam Sabbagh:

Because that will determine the cost of your accounting in a way

Cat Ford-Coates:

it's a question it's not required but it's

Cat Ford-Coates:

definitely advised like you could still run it through

Cat Ford-Coates:

something like a well I guess it is third party if it's like

Cat Ford-Coates:

TurboTax or something but it's it's something you could

Cat Ford-Coates:

technically do yourself but it's not

Bassam Sabbagh:

right so in an escort I would assume like an

Bassam Sabbagh:

incorporation here. It you have no choice. It has to be a third

Bassam Sabbagh:

way on there, it's audited, but it's an extra kind of a layer of

Bassam Sabbagh:

protection. So you're not allowed to do it yourself if you

Bassam Sabbagh:

haven't incorporated so TurboTax wouldn't wouldn't pass

Nicole York:

super interesting, huh? It's cool to hear the

Nicole York:

differences there. So for our Canadian friends, I hope that

Nicole York:

was helpful hearing from besom and you knew very early on

Nicole York:

beside that you wanted several different doing business as so

Nicole York:

that was that the big influence and moving to incorporation or

Nicole York:

was there anything else that made incorporation? Obvious?

Bassam Sabbagh:

No, it was it was like that the US is really

Bassam Sabbagh:

an issue. It's just that the corporation I didn't have a name

Bassam Sabbagh:

for the corporation Corporation names or like a number of times

Bassam Sabbagh:

So it's like, I wanted to be able to officially be paid and

Bassam Sabbagh:

have my correspondence and my invoices have the proper names

Bassam Sabbagh:

on them. That's the reason I did that. But the advantage is,

Bassam Sabbagh:

really, I wanted to separate myself from the business, I

Bassam Sabbagh:

wanted to get protection in that respect. I was I had some

Bassam Sabbagh:

objectives of keeping money in business, there's advantages of

Bassam Sabbagh:

being able to invest money if you have money in their

Bassam Sabbagh:

business, under a separate entity. So the business would be

Bassam Sabbagh:

in when investing the money. As an example, I just heard one of

Bassam Sabbagh:

the super ice photographers, I'm not going to mention who but she

Bassam Sabbagh:

was talking about how she, she manages her money. And

Bassam Sabbagh:

basically, she takes out a salary, but whatever is left in

Bassam Sabbagh:

the business, she invests on behalf of the business in real

Bassam Sabbagh:

estate, right. And there's a whole bunch of advantages there.

Bassam Sabbagh:

So I had these great, like, ideas in mind, I never did any

Bassam Sabbagh:

of them. But my point is, those were the things that attracted

Bassam Sabbagh:

me. But fundamentally, I wanted to protect myself and separate

Bassam Sabbagh:

myself from the business and my house and my home, and, and all

Bassam Sabbagh:

that. And I also wanted to take advantage of the tax incentives.

Bassam Sabbagh:

I mean, I would, it would cost me something like $3,000 for

Bassam Sabbagh:

accounting fees extra, you know, per year, but I saved about 15

Bassam Sabbagh:

to $20,000 in taxes over the last over the next two, three

Bassam Sabbagh:

years. So that was the main reason.

Nicole York:

Perfect, that's perfect. That makes a whole lot

Nicole York:

of sense. Okay, I hope everybody's been listening, and

Nicole York:

we are not dropping off. And if you know somebody who needs to

Nicole York:

be here for this conversation, please get them here. Because

Nicole York:

this decision could really be the difference between all the

Nicole York:

tax breaks, Sam was talking about could be the difference

Nicole York:

between your you know, ease of business, like I'm still a sole

Nicole York:

proprietor, so I'll talk about that later, because it's not

Nicole York:

going to last for much longer. But I'm still a sole proprietor.

Nicole York:

And the reason for that is, I just can't be bothered. It's so

Nicole York:

terrible. It's so absolutely lazy, but it's the truth. I'll

Nicole York:

talk about that later. But this, this could really be a big

Nicole York:

difference in how your business functions. How much effort has

Nicole York:

to go into additional effort, I should say, has to go into the

Nicole York:

business side, the difference between I only filed my taxes

Nicole York:

once a year, or file your taxes quarterly, you know, which, you

Nicole York:

know, anyway, ask people to be here. If you know folks who

Nicole York:

really need this right now. So Becca, Dustin, either review, or

Nicole York:

you guys will still or you do it in LLC, how did you come to that

Nicole York:

decision? And yeah,

Unknown:

so I run an LLC, it's just Dustin Vakama, LLC. The

Unknown:

primary backing behind my decision was I knew that I would

Unknown:

be vending at events. And there's a lot of liability in

Unknown:

that, you know, with, with so many people being in a venue and

Unknown:

coming through the booths for photoshoots, and whatnot. I

Unknown:

actually had a good buddy of mine, who's a lawyer and helped

Unknown:

me set everything up. And it was, for me, it was quite

Unknown:

daunting. It's not so bad now, because I have people kind of in

Unknown:

a network is, you know, coming from being primarily just an

Unknown:

artist doing small freelance gigs, kind of as a side hustle,

Unknown:

to moving a bit more on my own. You know, it gets scary. And so

Unknown:

for me, it was it was much more, you know, for liability sake.

Unknown:

And also the ability to, you know, as was said before, kind

Unknown:

of run other ventures under DBA, rather than having to completely

Unknown:

start over. And, yeah, that's kind of my reasoning behind it.

Unknown:

You know, personally, it's something that I'm learning

Unknown:

every day, as I said, you know, it scared the heck out of me at

Unknown:

first. And the more that I'm learning about it in the support

Unknown:

group that I have around me for information definitely helps a

Unknown:

lot, including everybody here.

Nicole York:

I can completely understand why you made that

Nicole York:

decision, particularly knowing that you are going to be vending

Nicole York:

at events. Because yeah, there's just too many things that can go

Nicole York:

wrong. And that was actually one of the reasons I felt

Nicole York:

comfortable staying a sole proprietor because most of the

Nicole York:

things I was doing, and most of the places I was earning money

Nicole York:

didn't necessarily involve a whole lot of other people.

Nicole York:

That's this is after I stopped taking weddings. Thank you for

Nicole York:

that. But yeah, I just didn't have those at least many cases

Nicole York:

for liability. That's not to say nothing could have ever

Nicole York:

happened. But I just at the time, didn't feel like it was

Nicole York:

really likely. So if I was in your shoes, I think it would

Nicole York:

have done the exact same thing despite all the additional

Nicole York:

effort.

Unknown:

Yeah, it's it's definitely You know, when I was

Unknown:

sitting there, and I'm talking to my buddy about it, I'm like,

Unknown:

man, like, I just don't know, like, it feels like a huge

Unknown:

weight on, you know, on my shoulders. But it really isn't

Unknown:

nearly as bad. I mean, I'm not running, you know, 200,000, you

Unknown:

know, dollar a year business right now doing what I'm doing,

Unknown:

eventually, you know, it'll grow, hopefully, to that. But it

Unknown:

Yeah, liability was a huge thing. I went from shooting in

Unknown:

my garage to shooting at events with 1000s of people, you know,

Unknown:

being seen and, and everything all day, and then having a team

Unknown:

as well, you know, at these Comic Con events, it's, I've

Unknown:

got, you know, at least four other people that I'm working

Unknown:

with, and, you know, sitting in a 10 by 20 space, I'm like, all

Unknown:

it takes is one wrong step. You know,

Cat Ford-Coates:

I think it's really important to note that we

Cat Ford-Coates:

are not accountants. And as business owners like this is a

Cat Ford-Coates:

very healthy conversation, especially for anybody

Cat Ford-Coates:

considering how to set things up. But understand, at the end

Cat Ford-Coates:

of the day, like, you really need to talk to an accountant

Cat Ford-Coates:

about your situation and a lawyer. So I'm just putting that

Cat Ford-Coates:

disclaimer out.

Nicole York:

Yes, yeah, absolutely. We're just a bunch

Nicole York:

of business owners sharing our experiences and our thoughts,

Nicole York:

and hoping you can learn something from them. This is not

Nicole York:

us giving you advice on what to do with your unique situation.

Nicole York:

Like cat said, accountant, lawyer, do those things. Go do

Nicole York:

them. Becca, let's hear from you, before we start inviting

Nicole York:

friends up from the audience, where

Bekka Bjorke:

I am also a can't be bothered sole proprietorship,

Bekka Bjorke:

I'm kind of maybe maybe for some of the similar reasons to you.

Bekka Bjorke:

My first introduction to working in and starting a small business

Bekka Bjorke:

was through another business in my family. That was an LLC. So

Bekka Bjorke:

that was kind of like, in my little brain, I was like, this

Bekka Bjorke:

is this is the way this is when you're a real businesses when

Bekka Bjorke:

you're an LLC. That's not it. But eventually, you know, for

Bekka Bjorke:

myself, after analyzing kind of how I spend my time, what my

Bekka Bjorke:

business is, and hopping around between states and stuff, when I

Bekka Bjorke:

moved to Washington, I did become a sole proprietorship.

Bekka Bjorke:

And my only hesitancy there is a liability, because I do have

Bekka Bjorke:

personal assets that I'd rather not get sued and have taken

Bekka Bjorke:

away. But as far as like, the scale of my current business,

Bekka Bjorke:

and you know how my business runs, it's all me at my house

Bekka Bjorke:

for the most part. I don't really hire other people, when I

Bekka Bjorke:

work with other people, they're usually contracted through

Bekka Bjorke:

whoever I'm working for. It just didn't feel right at the time to

Bekka Bjorke:

scale any larger. However, maybe in like the next year or two,

Bekka Bjorke:

after all, my kids are finally kicked out and into school. So I

Bekka Bjorke:

have a little more freedom and time to scale my business larger

Bekka Bjorke:

and explore more options there, I may switch over to an LLC. But

Bekka Bjorke:

for me right now, sole proprietorship works great, my

Bekka Bjorke:

taxes are easy. I don't really have any issues. Yeah, so that's

Bekka Bjorke:

about where I'm at.

Nicole York:

Yep, same boat. If today, if you are, if you have

Nicole York:

gone through this process, and you have some thoughts, that

Nicole York:

would be handy to share, go ahead and raise your hand. And

Nicole York:

while I wait for that, I will explain a little bit about why I

Nicole York:

am still a sole proprietor and why that's gonna change. So very

Nicole York:

similar to you, Becca, there just was there were things

Nicole York:

involved in being an LLC, I just didn't want to do, I just don't

Nicole York:

didn't care I didn't have, I didn't have anything, I didn't

Nicole York:

own a home at the time. When I first started my business, we

Nicole York:

didn't really have any assets, everything was liquid, we didn't

Nicole York:

have any real reason to assume that that was going to change

Nicole York:

anytime in the near future. And then also, I wanted to not deal

Nicole York:

with things like fees, and lawyers, and etc, etc. Most

Nicole York:

everything that has to do with my business, I could just do

Nicole York:

myself. So I was fine to just be simple and leave it at that. But

Nicole York:

now, as everything is grown, as I started having income in

Nicole York:

different areas, and as we now do own a home that probably will

Nicole York:

eventually become a rental when we move out of the state. Those

Nicole York:

are some assets that I would like to protect, and I'm earning

Nicole York:

income in multiple different areas that just don't make sense

Nicole York:

to call Nicole York photography anymore. So these things are

Nicole York:

going to need their own DBAs their own doing business as and

Nicole York:

they're gonna have to eventually be run as their own thing. And

Nicole York:

so I'm going to be switching soon. From just good old Nicole

Nicole York:

York photography over to LLC so that I can have those things set

Nicole York:

up separately, I'm not looking forward. I just, I don't want to

Nicole York:

be bothered. I don't want things. I don't want to do

Nicole York:

things. I just want to make stuff. But I mean, that comes

Nicole York:

with the territory. So that's where I will be heading. If you

Nicole York:

have a business story about these decisions, how you be an

Nicole York:

LLC, or a sole proprietor, what kind of legal business, you

Nicole York:

should be running, where you want to run, please raise your

Nicole York:

hand, we'll bring you up and chat. I also want to mention

Nicole York:

before Joshua shares his thoughts, you did say something

Nicole York:

beyond that I wanted to touch on something that you do have the

Nicole York:

advantage with when you are incorporated. And that is, I

Nicole York:

know people as well who have purchased property through their

Nicole York:

business, and they actually live in the business property. And

Nicole York:

there's a whole host of reasons to do that. But it's it you

Nicole York:

know, how to do a tax write offs and all kinds of things. So I

Nicole York:

know folks who have done that it's made a huge difference in

Nicole York:

what they're actually able to where their income goes, right.

Nicole York:

So

Bassam Sabbagh:

practical, practical example of that you

Bassam Sabbagh:

buy your own the building that you have your studio in, and

Bassam Sabbagh:

then you can rent you can pay rent to your company. So that's

Bassam Sabbagh:

it's so your your you set up a different company, obviously, or

Bassam Sabbagh:

a different, I don't know what you call it, that basically

Bassam Sabbagh:

you're paying the rent to your company, who's the owner of the

Bassam Sabbagh:

building, and then your rent is an expense, obviously for your

Bassam Sabbagh:

for your photography business. So that's, yeah, there's

Bassam Sabbagh:

advantages there. There's another advantage for s corpse.

Bassam Sabbagh:

And I'm not sure but maybe it is for LLC also. So in Canada, we

Bassam Sabbagh:

don't have the equivalent of the LLC. It's either a corporation

Bassam Sabbagh:

or a sole proprietorship, or a partnership with somebody which

Bassam Sabbagh:

is similar to a sole proprietorship, except with two

Bassam Sabbagh:

or three people. But there's an advantage also being able to

Bassam Sabbagh:

carry over any losses to future years as a corporation. Right.

Bassam Sabbagh:

So if you lose money in the first two, three years, I think

Bassam Sabbagh:

you have up to seven years depending on where you live or

Bassam Sabbagh:

what what country you're in here. I think it's seven years

Bassam Sabbagh:

where you can carry your losses. So if you make money in a

Bassam Sabbagh:

certain year, but you lost some money in previous year, you can

Bassam Sabbagh:

negate that that gain and not pay taxes. So that's that's a

Bassam Sabbagh:

big advantage for somebody who's starting a business and and not

Bassam Sabbagh:

making money early on.

Nicole York:

Yeah, for sure. Oh, all these good things.

Bassam Sabbagh:

Before Joshua hops on I just want to pass a

Bassam Sabbagh:

message on Jeannie sent me a message Jean cat talk. Just a

Bassam Sabbagh:

quick note for anybody who's a veteran or knows a veteran who's

Bassam Sabbagh:

disabled. Apparently, there's a program where you can they waive

Bassam Sabbagh:

the LLC costs for any disabled veterans just passing on the

Bassam Sabbagh:

message as Jean can

Nicole York:

Oh, great to know. All right, and pass that

Nicole York:

knowledge along if you didn't know that before. But you know,

Nicole York:

veteran who was wanting to do business, pass that along to

Nicole York:

them. Alright, first of all, hear from Joshua and then

Nicole York:

Juliet.

Unknown:

Good morning. So we are set up as an LLC, and this year,

Unknown:

we changed our designation to escort but essentially, for us,

Unknown:

we, we have a, we deal with a lot of customers at our studio,

Unknown:

we had about 15,000 people come through our doors last year. And

Unknown:

so liability is a huge concern. So obviously, having all the

Unknown:

correct insurance in place, but then also making sure that our

Unknown:

personal assets are completely separate and protected from the

Unknown:

business was really important to us. But what I really came to

Unknown:

say is You briefly mentioned, you know, talking to an

Unknown:

attorney, and accountant. And I hear people all the time when

Unknown:

they're thinking about starting a business saying, Well, I don't

Unknown:

have the money now to go talk to somebody to do a consultation or

Unknown:

whatever. The reality is that it is so much more expensive to not

Unknown:

talk to someone early on, even if you're not set up as a sole

Unknown:

proprietorship. Because you need to understand when you should

Unknown:

consider changing what your designation is. And then also

Unknown:

the deadlines for doing so. So you can change it within that

Unknown:

year. So you can file differently that year if you

Unknown:

need to. And that and that can have pretty significant impact

Unknown:

on your taxes depending on what you've got going on. So it is so

Unknown:

worth it to spend a couple $100 to go meet with a couple people

Unknown:

that are professionals in that field to give you the advice of

Unknown:

maybe not what you're doing today. But when you hit, you

Unknown:

know, X number of customers, or if you hit X amount of revenue

Unknown:

or you hit you know, X milestone, that's the time to

Unknown:

start thinking about doing X, Y and Z before you have major

Unknown:

implications that you know can occur for

Nicole York:

you. Ooh, such good advice. Yes, yes, yes, yes. It's

Nicole York:

always cheaper to do the right thing first. That had to pay for

Nicole York:

your mistakes later because he didn't know what to do. So help

Nicole York:

folks take that to heart and Joshua. For people who don't

Nicole York:

know can you tell them a little bit about how you're doing

Nicole York:

That's

Unknown:

rounds because it's the soup. Sure, so essentially,

Unknown:

we have a full service photo studio, we've got about 20

Unknown:

different backdrops in the studio, they're all, you know,

Unknown:

pre lit. And we change our half those backdrops every three

Unknown:

months to keep everything kind of current and fresh. And

Unknown:

essentially, we operate a couple of ways. We sell general mission

Unknown:

tickets that allows people to come in and take their own

Unknown:

photos, they have the option of adding an image package and

Unknown:

working with one of our pro photographers that are on staff

Unknown:

with us. Or they can do a private rental and rent out the

Unknown:

entire studio. So depending on what their needs are, there's

Unknown:

different ways they can use essentially, during general

Unknown:

admission, we have some restrictions in place, all

Unknown:

photographers have the same restriction, including our own

Unknown:

photographers, meaning no tripods, no lights, dance, no

Unknown:

off camera flash, no big modifiers. And you can't do

Unknown:

extended photo shoots on any one particular set. But if you want

Unknown:

to do any of those things, then you can simply do a private

Unknown:

rental of the studio yourself, you can bring in as much gear as

Unknown:

you'd like. And, you know, shoot it the way you want to. So the

Unknown:

second option usually is done for well, sometimes

Unknown:

photographers want to bring in their clients do private photo

Unknown:

sessions. Some people want to shoot boudoir, or some people

Unknown:

just want privacy. And then when customers are doing, you know

Unknown:

video related projects, music videos, or marketing videos for

Unknown:

the company's things on the

Nicole York:

super, super cool. I remember when I first learned

Nicole York:

about your business model, I was like, oh, that's rad. So I just

Nicole York:

wanted folks to hear why. Also like understanding the way

Nicole York:

you're doing business, it makes a whole lot of sense. Why you

Nicole York:

have the legal type of business that you do. So thanks for

Nicole York:

sharing that. We'll get to Juliet and then the coach. So

Nicole York:

Juliet

Juliet:

Hello, um, yeah, so from the beginning of what Joshua

Juliet:

said, for sure, get yourself an accountant and act like the IRS

Juliet:

is gonna come knocking on your door, and just being like, I'm

Juliet:

very low tech, I'm very, like, I still have the spreadsheet, I do

Juliet:

have an accountant for the last 20 years, it's the same person

Juliet:

in different, you know, different parts of my life. And

Juliet:

you know, so she's seen it all and the accountant is also like

Juliet:

your team member because, like, I'll be in the middle, you know,

Juliet:

raising a family running the business, you get a letter, it

Juliet:

stops you in your tracks, and it's like what is from the, from

Juliet:

the IRS or whatever it was? And it's like, Okay, what does this

Juliet:

mean? You can make a call, they take care of it. And if you're

Juliet:

if you just keep everything organized, no matter what system

Juliet:

you use, I did get a you don't know what's going to be a red

Juliet:

flag. So also have that conversation because it's like,

Juliet:

if you have an office in your house, if you you know, whatever

Juliet:

I mean, it's just it's you know, you could say it's ridiculous,

Juliet:

but I just like even my accountant was like, I don't

Juliet:

know why this doesn't make sense for your otter, but we just have

Juliet:

to you just have to do what you're asked and then my

Juliet:

accountant was like, This is amazing, because every single

Juliet:

bit of income on my spreadsheet and expense matched exactly my

Juliet:

bank account. So when they when we handed over the statements

Juliet:

they were like wow, this is so you know, it's just like very

Juliet:

streamlined and easy on there and when they're looking for the

Juliet:

information and so it was really fine it wasn't a disaster but

Juliet:

just you know acts live your life like they're gonna show up

Juliet:

at your door basically is what is my

Nicole York:

such a good warning cuz that's terrifying, right?

Nicole York:

Like, oh my god, what is the back to happen? So keep good

Nicole York:

books people and get yourself in accountant. Coach, good morning.

Unknown:

I'm well how are you?

Nicole York:

Chilly. It's cold here.

Unknown:

That's a little it's a little brisk here this morning

Unknown:

too.

Nicole York:

How's it going?

Unknown:

Good. Just taking kiddos for to school and all the

Unknown:

things jumping in to hear you guys talk. Say hi to my homie

Unknown:

Dustin

Nicole York:

so do you have any advice for folks who are looking

Nicole York:

at how they want their business to be stressful?

Unknown:

Yeah, I mean, I came in to some great advice. But you

Unknown:

know, I am not I'm not an expert in these fields. So I hire the

Unknown:

people who are beyond a CPA, I think looking into more of a, a

Unknown:

wealth management company is a smart move. So the guys that I

Unknown:

do business with employ former IRS attorneys. And they know

Unknown:

basically all of the rules and all of the things that all the

Unknown:

legal implications of business setups and they also know what

Unknown:

the IRS is gonna come looking for. And they know how to

Unknown:

structure your business in a way that lets you have the most

Unknown:

benefits without worrying about all of the rules. You are not

Unknown:

braking. And so in my experience, yeah, they do

Unknown:

typical CP, a kind of stuff, but they're also looking for

Unknown:

opportunities to save me money. They also do some level of

Unknown:

recommendations for investing in growth. But I think the biggest

Unknown:

thing that they've ever done for me is finding, I hate to call

Unknown:

them tax loopholes. But I guess that's what they are helping you

Unknown:

find the things that legally you can capitalize on. You know,

Unknown:

these people are employed by major corporations for the same

Unknown:

reasons, and just finding all those things. But also, I agree

Unknown:

with the whole keeping records. Yeah, I just, I just got a

Unknown:

letter from the IRS. For a house I sold years ago talking about,

Unknown:

I made all these capital gains that I didn't make on this

Unknown:

house. And if I wouldn't have had the records in place for

Unknown:

that. I mean, super scary when you get a packet from the IRS,

Unknown:

and they're talking about, you owe us like 45 grand. So super,

Unknown:

super intimidating, but having the right people in your corner,

Unknown:

so you can just turn around and be like, I'm good handle this is

Unknown:

wicked important. But also being able to give them that

Unknown:

information so that they can move on that is critical.

Nicole York:

Oh, so much good advice today. All right. So

Nicole York:

later on, when we talk about business, this month, we will be

Nicole York:

talking about taxes, and things that we should be keeping in

Nicole York:

mind. And I am actually going to have, I'm actually searching

Nicole York:

right now. But I'm gonna have a CPA, come on. And talk to us a

Nicole York:

little bit about what we should be considering how which we

Nicole York:

should be putting away like these different things. And

Nicole York:

obviously, the most important part is that this does vary

Nicole York:

depending on where you live. So that's something you need to

Nicole York:

keep in mind. Don't just take our experiences and assume that

Nicole York:

everything is the gospel, go and look at what's going on locally

Nicole York:

for you and make sure that you're talking to a professional

Nicole York:

because they're going to be able to give you that feedback about

Nicole York:

your, your personal life, the intentions that you have with

Nicole York:

your business, how you want your business to function, and give

Nicole York:

you advice that you should be following. So make sure that you

Nicole York:

are doing that. All right.

Unknown:

And I think just to like, again, a good professional

Unknown:

isn't just about keeping you out of trouble. You also want to

Unknown:

look for that team that's going to help manage you and help you

Unknown:

move beyond that space. Or at least in my opinion, make money

Unknown:

for the future. I think I've said that enough here.

Nicole York:

Yep, absolutely. So is anybody looking to switch? So

Nicole York:

obviously I am now I'm about to be on the cusp of changing from

Nicole York:

a sole proprietor to an LLC is anybody else looking to make

Nicole York:

that switch anytime soon? That just a meeting.

Bekka Bjorke:

Like I said, I might in the next year or so.

Bekka Bjorke:

And one of the major factors that was just how much of

Bekka Bjorke:

business I was doing. So when I first you know, registered as a

Bekka Bjorke:

business in the State of Washington, I just had a baby.

Bekka Bjorke:

And I, I did have some work, but it wasn't really to a degree

Bekka Bjorke:

that I felt like I needed to establish myself to the degree

Bekka Bjorke:

that I have now. So again in the next year or so I might make

Bekka Bjorke:

that switch over to analyse to.

Nicole York:

Right. Okay, so what I'd love to hear from y'all

Nicole York:

now is what do you think is the biggest advantage and I know

Nicole York:

there's obviously multiple, right? This is a multifaceted

Nicole York:

thing. But what do you think the biggest advantage is of the

Nicole York:

legal status you chose for your company? I'll start since y'all

Nicole York:

are quiet.

Matt Stagliano:

I was gonna say

Nicole York:

oh, sorry, Matt. Go ahead. No, no, I didn't mean to.

Nicole York:

No, it's okay. Okay, I'll just go really quickly because it's

Nicole York:

short as a sole proprietor. I think the biggest benefit for me

Nicole York:

is just the simplicity of everything. And that is because

Nicole York:

I do have three kids at home well my oldest just graduated

Nicole York:

but he's still living at home. And I guess it's not just got

Nicole York:

it's almost been a year I'm starting to forget. Anyway, I

Nicole York:

have them at home and we move often as a military family and

Nicole York:

so obviously for me, there is really just a level of

Nicole York:

simplicity making everything easier that I value. So that I

Nicole York:

would say is the biggest benefit of a sole proprietorship is the

Nicole York:

is the kind of overall simplicity Have the status and

Nicole York:

things that you don't have to worry about that I will have to

Nicole York:

consider once I become an LLC. But that's basically all. That's

Nicole York:

really the only reason I am there. So there's that for me.

Nicole York:

What about you, Matt? What's the biggest?

Matt Stagliano:

Well, I think I think for me, you know, I'm

Matt Stagliano:

barely one step above a sole prop. But as an LLC, because I

Matt Stagliano:

have investments, and I have homes, and I have, you know,

Matt Stagliano:

assets that I don't want to lose, due to my dumb mistakes in

Matt Stagliano:

business. I wanted to be able to have some level of protection in

Matt Stagliano:

separate my personal assets from my business once that was the

Matt Stagliano:

primary driver of having the LLC. Beyond that I didn't put a

Matt Stagliano:

whole lot of thought into it.

Nicole York:

Great protection is. Right, so having liability

Nicole York:

be just the biggest, the biggest thing, so that the liability is

Nicole York:

to your company, and not to you? Yeah, absolutely. It's a

Nicole York:

separate entity.

Matt Stagliano:

Absolutely. I mean, I, I, the business that I

Matt Stagliano:

was doing before, and being on a range with a lot of firearms a

Matt Stagliano:

lot of times getting in the way. I mean, it was, it was really

Matt Stagliano:

important to me to have as much protection.

Nicole York:

Yeah, yeah, I can imagine. I can imagine. Anybody

Nicole York:

else. What do you think is the the kind of biggest benefit for

Nicole York:

you? So for cat and Matt, obviously, liability? That's a

Nicole York:

really big one. Is anybody looking at the tax status and

Nicole York:

the different tax benefits that you have as an incorporated

Nicole York:

business? As as kind of the main thing? Or is that just an

Nicole York:

awesome side?

Unknown:

I would say that comes kind of second to the protection

Unknown:

factor, and being able to take some of the tax benefits of an S

Unknown:

corp as an LLC. is kind of icing on the cake.

Nicole York:

For sure, yeah.

Bassam Sabbagh:

Well, the tax, I guess the tax benefits really

Bassam Sabbagh:

depend on a difference between a personal tax rates and business

Bassam Sabbagh:

tax rates. Where I am, it's a huge difference, there's 30

Bassam Sabbagh:

points of difference. So 4025 points of difference. So it does

Bassam Sabbagh:

make a difference. If you want to keep money in your

Bassam Sabbagh:

corporation, meaning you don't need all the money you want. You

Bassam Sabbagh:

know, you don't want to be taxed on something you don't, you

Bassam Sabbagh:

know, if you have a sole proprietorship, you're taxed on

Bassam Sabbagh:

your personal rate for everything you earn. Whereas if

Bassam Sabbagh:

you if you want to, if you want to take a salary and keep some

Bassam Sabbagh:

money in the business, then it's being taxed in my case at 21%.

Bassam Sabbagh:

Instead of, say, 48, or 49%.

Nicole York:

This is a huge move. Yeah, for sure. And then

Nicole York:

when you pay what I so my question would be to besar is

Nicole York:

when you pay yourself, do you then have to pay the difference

Bassam Sabbagh:

yourself, you pay the difference. So for

Bassam Sabbagh:

example, there's just just for numbers sake, if I, if I have

Bassam Sabbagh:

100, if I make $100,000, in my business in one year, and I just

Bassam Sabbagh:

like pure profit, and I decided I want to, I want to I don't

Bassam Sabbagh:

need it all, I'm gonna take a $50,000 salary, then I keep the

Bassam Sabbagh:

other 50,000 in the business, and it's only taxed at 21%. So

Bassam Sabbagh:

there's more cash in the business, and maybe I'll need it

Bassam Sabbagh:

next year. But when I take it out, it's becomes personal

Bassam Sabbagh:

income, and I paid it, I pay basically the difference, right

Bassam Sabbagh:

when it becomes personal income. But if you want to build wealth

Bassam Sabbagh:

with any company, it's very powerful when the tax rate is

Bassam Sabbagh:

very different.

Nicole York:

For sure, okay, that's really fantastic to know,

Nicole York:

folks. Does anybody else have a super benefit that they want to

Nicole York:

say about the legal status that they've chosen? Then I just want

Nicole York:

to ask everyone. What do you think? How do you think having

Nicole York:

chosen that particular legal status affects the way that you

Nicole York:

have to run your business, because obviously, there are a

Nicole York:

lot of things to keep in mind when we're looking at things

Nicole York:

like how much tax we should be putting away how often we need

Nicole York:

to file all of that kind of stuff. So it really can affect

Nicole York:

the way that you structure what you're doing, I can pretty much

Nicole York:

ignore everything all year. And I don't have to worry about what

Nicole York:

I made that quarter. I can look at it as a cumulative that then

Nicole York:

I have to deal with at the end of the year. Whereas some folks

Nicole York:

depending on where you are really have to do quarterly, and

Nicole York:

also the fact that I'm still technically a resident of

Nicole York:

Washington State, that's my home of residents. There is no income

Nicole York:

tax in Washington State. So I'm I'm pretty lucky with that. Of

Nicole York:

course, there are still business taxes. But I get to skate a

Nicole York:

little bit on some of those things. Whereas if you live in a

Nicole York:

state that does have an income tax, that changes things for

Nicole York:

you. So does anybody else have a benefit? I see, MJ is with us.

Nicole York:

So I want to make sure we hear from you. And then what I want

Nicole York:

to ask folks and keep this in mind is how does that particular

Nicole York:

legal status effect The way that you run your business so MJ

Melissa:

I totally forgot what I was going to say I'm so sorry.

Nicole York:

No worries, I just threw a whole lot out there. If

Nicole York:

you remember, just go ahead and unmute yourself and go for it.

Melissa:

I think it was if you're not making very much

Melissa:

money, the difference like right now I've got five kids at home,

Melissa:

there's not a lot of time, but I'm still growing. And I'm just

Melissa:

recently made the switch from sole proprietor to LLC and I

Melissa:

still don't make enough like, I'm just, you know, it's, it's

Melissa:

just a little bit here and there. I don't make enough to

Melissa:

necessarily outs can you guys still hear me? I'm so sorry.

Melissa:

Yep. No, we got to, um, to make to you know, have it make a big

Melissa:

difference in tax cuts. So if you're on the edge, at least

Melissa:

where I am, I'm in Indiana, there's not a big difference in

Melissa:

what even how you file your taxes. So and I know you can

Melissa:

find out that there. There's a cap that says hey, you you do

Melissa:

have to be can't just file on your, your regular income taxes,

Melissa:

you need to move up. And at that point, when you're making that

Melissa:

much more money and opening up any other kind of accounts where

Melissa:

money is coming in. You do need to be extra careful. I know that

Melissa:

it I feel like I jumped the gun. The only benefit I found for

Melissa:

having LLC is that I got my my tax ID number and I'm able to

Melissa:

get discounts. But like, I'm excited to get to a point where

Melissa:

I know that sounds silly but where I will need to pay taxes

Melissa:

and need to pay.

Nicole York:

No, that doesn't sound silly. I mean, that's

Nicole York:

goals, right? Like we all want to be earning enough that we

Nicole York:

need somebody to come along and and handle that stuff for us. So

Nicole York:

makes a lot of sense.

Bassam Sabbagh:

And there's there's another advantage, I

Bassam Sabbagh:

believe to LLC as an S corpse versus sole proprietorship. And

Bassam Sabbagh:

it may not be for everybody, but it's something to consider in

Bassam Sabbagh:

case you want to pass the business on to a family member

Bassam Sabbagh:

or someone so it's business continuity. When it's a sole

Bassam Sabbagh:

proprietorship, when you decide to stop working, or you pass on

Bassam Sabbagh:

to something different, that it's gone. It doesn't exist

Bassam Sabbagh:

anymore. Whereas if it's an LLC, or an escort, it's it's a it's a

Bassam Sabbagh:

living thing. And there's business continuing.

Nicole York:

Yeah, I'm actually really glad you mentioned that I

Nicole York:

was thinking it earlier. And then listening to everybody had

Nicole York:

kind of distracted me, I meant to ask Dustin, because his LLC

Nicole York:

is his name. So I was meant to ask him, you know what his

Nicole York:

thoughts were when he formed it that way. Because, for me, I can

Nicole York:

I'm doing business as myself. I'm a sole proprietor, so that's

Nicole York:

fine. But as soon as I change to an LLC, I'm absolutely switching

Nicole York:

that over and changing the name because I do want to be able to,

Nicole York:

at least for some aspects of what I'm going to be doing, I do

Nicole York:

want to be able to have an exit strategy where somebody can keep

Nicole York:

the name and everything that's associated with it. So

Nicole York:

definitely an important thing to keep in mind. So how do these

Nicole York:

decisions affect the way our businesses run? Y'all? What are

Nicole York:

some things that we should keep in mind, if you're going to be a

Nicole York:

sole proprietor, if you're going to be an LLC? How does that

Nicole York:

actually affect the things that you have to do with your

Nicole York:

business on a daily or weekly basis?

Matt Stagliano:

I think, you know, cat kind of mentioned this

Matt Stagliano:

at the beginning, one of the most important things is to

Matt Stagliano:

understand how you want your business to run, how you want to

Matt Stagliano:

deal with the business rather than feeling like you have to be

Matt Stagliano:

structured a certain way. That was one thing that I learned

Matt Stagliano:

early on, is that not everything needs to apply to every

Matt Stagliano:

business. So just really understand the structure that

Matt Stagliano:

you have now, what you want now, and then also think about what

Matt Stagliano:

you want in the future. It might be easier to stay a sole prop

Matt Stagliano:

now. But it might benefit you down the line. If you were to go

Matt Stagliano:

through the time and effort, like Joshua said right now to

Matt Stagliano:

talk to accountants and lawyers and get yourself set up as an

Matt Stagliano:

LLC. I think S Corp is typically something that people consider

Matt Stagliano:

when they're further along in their journey, or they're

Matt Stagliano:

already coming out of the gate with a much bigger company

Matt Stagliano:

structure. But it really comes down to how do you want to run

Matt Stagliano:

it? And if you don't know, talk to some other business owners

Matt Stagliano:

talk to some lawyers talk some accountants as to what might be

Matt Stagliano:

the best situation for you.

Nicole York:

Absolutely, I'm gonna have to hand over

Nicole York:

everything to y'all. I'm about to walk up on the grounds crew

Nicole York:

so there's, you can probably hear the loud things so I gotta

Nicole York:

be quiet for just a second y'all. They're gonna have to

Nicole York:

talk.

Gene Sizemore:

If I could real quick, I've just got a few

Gene Sizemore:

minutes here and then I've got to get Get back. But I wanted to

Gene Sizemore:

talk a little bit about what Nicole was talking about with

Gene Sizemore:

the name. So in the state of Virginia, and I'm sure this is

Gene Sizemore:

like this in many other states, but I just wanted to caveat by

Gene Sizemore:

saying, you know, it is different by state and county.

Gene Sizemore:

So, you know, definitely check locally, but in the state of

Gene Sizemore:

Virginia, what I've done is I've created an LLC, with two doing

Gene Sizemore:

business as names that fall under the LLC name, so my

Gene Sizemore:

company name is snatcher, LLC. Underneath snatcher, LLC, I have

Gene Sizemore:

snatcher productions, which is the video side of my business.

Gene Sizemore:

And I have Jean Sizemore photography, which is the

Gene Sizemore:

photography side. The reason I did that is because my late

Gene Sizemore:

friend Frank Ruggles beat into me over and over and over again,

Gene Sizemore:

that people don't care so much about my photography as much as

Gene Sizemore:

they do my name. I used to, I used to sell pictures under

Gene Sizemore:

stamps or photography, well, nobody knew who the heck that

Gene Sizemore:

was. So he encouraged me to go back to my name. And I've found

Gene Sizemore:

that to be very helpful when it comes to people recognizing me

Gene Sizemore:

as a photographer, recognizing my work and my brand of

Gene Sizemore:

photography. When it comes to doing films, it's a little bit

Gene Sizemore:

different. Because my name isn't Martin Scorsese, or, you know,

Gene Sizemore:

George Lucas or something. So coming up with a name that I can

Gene Sizemore:

then build a brand around was important on the video side. So

Gene Sizemore:

that's why I decided to do those two things, the only thing I

Gene Sizemore:

needed to do when I filed the LLC, was provide Articles of

Gene Sizemore:

Organization to the state of Virginia, that just show that I

Gene Sizemore:

am that stature LLC is kind of my umbrella company, and that I

Gene Sizemore:

have two smaller divisions that operate under that name. And

Gene Sizemore:

then with my bank account, I have the doing business as set

Gene Sizemore:

up so that I can receive checks, you know, to either one. And

Gene Sizemore:

that's, that's how I've been operating for the last year. And

Gene Sizemore:

it seemed to make the most sense. One thing that I would

Gene Sizemore:

say Nikolas is, you know, on your point about, you know, when

Gene Sizemore:

you want to stop working, not to be morbid or anything, but just

Gene Sizemore:

keep in mind that, you know, Nicole York is a brand. And it

Gene Sizemore:

is it is a it is I'm you know, because we're all becoming

Gene Sizemore:

billionaire famous photographers here in the artist world, right?

Gene Sizemore:

Everyone's name is going to be recognizable, and we joke about

Gene Sizemore:

it. But there's some truth to the fact that if you're in a

Gene Sizemore:

certain place in your artwork, when you're done working, or

Gene Sizemore:

when you pass on your stuffs not going to lose value, the stuff

Gene Sizemore:

that you've done is not going to die. So you don't necessarily

Gene Sizemore:

want your name to disappear when you disappear. Because you may,

Gene Sizemore:

or your family members may still be able to capitalize on that

Gene Sizemore:

brand that you spent so much time building. So just something

Gene Sizemore:

to consider, just want to throw that in. And

Nicole York:

Oh, for sure. And my photography will always

Nicole York:

remain under my name. That isn't something I would ever hand off

Nicole York:

to anybody. But there are several other things I'm doing.

Nicole York:

And so for those things, I certainly want a name separate

Nicole York:

from myself that way, eventually, somebody else can

Nicole York:

run it, and maybe own it. And so we will obviously see that's

Nicole York:

pretty far in the future. But that's kind of the point of this

Nicole York:

conversation is I'm going toward this with the fact in mind that

Nicole York:

I want an exit strategy eventually, not for myself, not

Nicole York:

for my name, I will keep that. But I do want an exit strategy

Nicole York:

for some of the other ventures that I'm looking into. Because

Nicole York:

at some point, I don't want to have to focus on everything. And

Nicole York:

so I know that then I want to be able to have like the psalmist

Nicole York:

saying the continuity to be able to hand that off. So I know that

Nicole York:

those particular things will have their own business

Nicole York:

structures separately from what I do with my photography. And a

Nicole York:

big part of what hopefully eventually somebody will buy is

Nicole York:

the structure, the name, the clientele, all of that kind of

Nicole York:

stuff, right. So I'm knowing that in advance is influencing

Nicole York:

the decision that I'm making. Sorry for the vehicle sounds,

Nicole York:

which is why this conversation is so important. All right. I

Nicole York:

want to make sure we have a chance to hear from Carol and

Nicole York:

then we're going to tie everything up in a neat bow and

Nicole York:

an end the conversation today so hello, Carol.

Carol Gonzales:

Hi, I know it's time to go God I got so many

Carol Gonzales:

questions. Okay for one a quick one. Maybe easy for you guys. If

Carol Gonzales:

it's the LLC is A carol original would want to say my DBAs be

Carol Gonzales:

doing business as a carol original? or must it be

Carol Gonzales:

different from that?

Nicole York:

That's a tricky question because it depends on

Nicole York:

what you're doing. And so, like everybody has said before, with

Nicole York:

the LLC being your name, if that's an important part of your

Nicole York:

brand, just having the recognition that when you stop

Nicole York:

doing business, you probably don't want to hand over your

Nicole York:

name. So that is something to keep in mind. But if, if

Nicole York:

something, most of us will have a DBA, doing business as if what

Nicole York:

we're doing in that particular part of the business is vastly

Nicole York:

different from what's happening in the other places. So for me,

Nicole York:

I'm also an author, right? I'm a fiction author, and I'm a

Nicole York:

freelance writer. So when I'm writing, I don't necessarily

Nicole York:

want that to be tied to the photography work that I do. And

Nicole York:

so there will be a different name there as a publisher, as

Nicole York:

opposed to just my name as a photographer. So if you want a

Nicole York:

DBA, because you're doing something vastly different, I

Nicole York:

think that is a something to keep in mind, as opposed to if

Nicole York:

all you're going to be doing is either, just

Carol Gonzales:

to. Okay, and I probably have too many

Carol Gonzales:

questions. I mean, when you guys talk about all the, you know,

Carol Gonzales:

getting an accountant, CPA, Wealth Management lawyer, I

Carol Gonzales:

don't know anybody. And I don't even know where I don't know, if

Carol Gonzales:

you will be covering, you know, how you even find somebody much

Carol Gonzales:

less, somebody that's trustworthy. And then wanting

Carol Gonzales:

you guys just quickly made you made me think about is that my

Carol Gonzales:

future plans might work real well with what you guys are

Carol Gonzales:

saying as far as setting up a structure. Because my ideal is

Carol Gonzales:

to live in maybe a tiny home or whatever I can afford, is far as

Carol Gonzales:

the space to live, something easy to maintain, with a really

Carol Gonzales:

big warehouse for a place to work for my art and store things

Carol Gonzales:

and teach and whatever I can still possibly do. And then that

Carol Gonzales:

could so then, if I moved to, like, I'm thinking like

Carol Gonzales:

Washington state, or, or probably probably Washington

Carol Gonzales:

State or Oregon. And if I were to, you know, plan on the money

Carol Gonzales:

that I make from my house, be able to pour it into that

Carol Gonzales:

warehouse, and claim it on taxes. Sounds like a good

Carol Gonzales:

strategy to me. So I just, I just thought that was all real

Carol Gonzales:

interesting. And I just don't know how to suss that out a bit

Carol Gonzales:

further. But anyway, thanks for your time. And it's I know, it's

Carol Gonzales:

time to go.

Nicole York:

No problem, Carol. And I would just encourage you

Nicole York:

to ask these questions in the Facebook group, I just made sure

Nicole York:

that it was pinned up there at the top. For folks who maybe not

Nicole York:

don't know that it's there. This is a really fantastic place for

Nicole York:

us to chat about these things. Because obviously, it's we have

Nicole York:

to be careful about going too far into anybody's personal,

Nicole York:

their personal business. Because it may not apply. So ask those

Nicole York:

questions in the Facebook group. I just lost an ear, but I'm

Nicole York:

losing it again. And my dogs are fighting right by me. Why do

Nicole York:

they do this? So yeah, the Facebook group is going to be

Nicole York:

the perfect place for us to have those particular conversations

Nicole York:

because we do have the time to address them one at a time. And

Nicole York:

then also recognize, you know, we, I don't know anybody either,

Nicole York:

but I know other people. And I can ask, I can ask them if they

Nicole York:

know somebody, and I can Google them, and I can look up and see

Nicole York:

who's in my area. So don't be daunted by not knowing anyone

Nicole York:

personally, we have a great big group of folks here. And so

Nicole York:

likely somebody knows someone, so I would make sure you ask

Nicole York:

those questions in the Facebook group.

Carol Gonzales:

Thanks for that.

Nicole York:

Yeah, absolutely.

Bekka Bjorke:

I was gonna say the same and I can hop over

Bekka Bjorke:

there right now and um, maybe just start a thread on like, how

Bekka Bjorke:

did people find their various legal consultant people? And

Bekka Bjorke:

maybe we can get that conversation going. Thank you.

Nicole York:

Alright, everybody. So fantastic discussion today.

Nicole York:

Really good to hear what these personal experiences were around

Nicole York:

everybody choosing what legal status for their business they

Nicole York:

were going to be working with and then asking how that legal

Nicole York:

status then affects the business structure, which is what we're

Nicole York:

going to be talking about tomorrow we're going to be

Nicole York:

looking at business structure If that isn't something that you

Nicole York:

have thought about before, you probably doing some of these

Nicole York:

things without realizing it, how your business actually runs, how

Nicole York:

and where you market your business, who your clients are,

Nicole York:

how you sell, what you sell, how people purchase all of those

Nicole York:

things that are involved in the actual structure of the way your

Nicole York:

business runs. So that is going to be the beginning of the

Nicole York:

conversation tomorrow, it'll probably run a little bit into

Nicole York:

next week. So we'll want to talk about those things. So I'm

Nicole York:

priming you now be thinking of that for tomorrow. Because when

Nicole York:

we start looking at those things, and asking ourselves

Nicole York:

those questions, that is going to inform when we talk about

Nicole York:

writing a business plan, because we're going to need to know some

Nicole York:

of those things, if we're going to come up with a vision

Nicole York:

statement, a mission, a strategy, understand our market,

Nicole York:

all that kind of stuff. When we start writing a business plan.

Nicole York:

After that, we're going to talk finances, so we'll probably

Nicole York:

that'll probably be a good week long. We're also going to cover

Nicole York:

customer journey branding, pricing, marketing, things like

Nicole York:

that. So make sure that you are thinking of this stuff now so

Nicole York:

that you're prepared for these conversations. That way you feel

Nicole York:

really comfortable moving forward with some of the

Nicole York:

decisions that we're we're going to be talking about, so you can

Nicole York:

go into the next year feeling so prepared. Alright, John, thank

Nicole York:

you so much for being part of the conversation today for

Nicole York:

sharing your experiences. I hope that it was helpful and I hope

Nicole York:

y'all will join us bright and early tomorrow morning at 7am

Nicole York:

Mountain Standard Time that sucks for the West Coast and

Nicole York:

nine for the East Coast afternoon for our friends

Nicole York:

overseas. In the meantime, go make something amazing. And

Nicole York:

we'll see you tomorrow morning.

Matt Stagliano:

Thanks again for listening to this live clubhouse

Matt Stagliano:

discussion moderated by all of us at the artists Forge. We hope

Matt Stagliano:

you found the information useful and that it helps you gain a

Matt Stagliano:

little bit of insight as to how you work on your craft. For more

Matt Stagliano:

episodes, please join us each weekday on clubhouse or visit

Matt Stagliano:

the artists forged.com Go make something incredible

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About the Podcast

Morning Walk with The Artist's Forge
How to Critique Art
Learn how mindset, creativity, and visual literacy will help you think like an artist so you can create work you love and build a career that matters; bridging the gap between technique and art.

About your host

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Nicole York