Do You Actually Need an LLC? Probably Not (Yet)
Apr 09, 2025
One of the first things new entrepreneurs often do is hop on LegalZoom and file for an LLC. There’s nothing wrong with that — but you might be putting the cart before the horse.
What LLCs Are Actually For
LLCs are primarily useful for 3 reasons:
- 🛡️ Personal Liability Protection
This is the big one. If your business gets sued or ends up in debt, your personal assets — like your house or savings — are better protected. Without an LLC, you’re a sole proprietor, and that means you’re personally liable for anything that goes wrong. - 🤝 Professional Credibility
An LLC helps you look more legit to clients, partners, and banks. It sends the signal that you’re treating this like a real business — and others should too. - 💼 Clean Finances & Easier Taxes
Having an LLC allows you to open a business bank account and keep your books separate from your personal finances. By default, you’ll still pay taxes as an individual — but you’ve now drawn a legal line between you and your business. We talk about this in Starting Block…keeping your personal and professional finances separate is clutch for making your life easier!
So When Don’t You Need One?
If you’re still:
- Testing our your product/service idea
- Talking to customers to better understand their needs
- Making just a few hundred bucks a month
...you probably don’t need to worry about an LLC yet.
Focus first on building a desirable product or service. Then work on feasibility (can you deliver it?) and viability (can you make money doing it?). Once you’re selling consistently and picking up some traction — that’s the time to go official.
When You Should File for an LLC
✅ You’re making steady income
✅ You’re signing contracts or client agreements
✅ You’re selling something where someone could claim harm or damages (think: personal jetpack)
✅ You’re hiring people or working with partners
At that point, the LLC gives you protection and peace of mind. And depending what state you live in — it’s usually not that expensive.
Bottom Line:
If you’re exploring, side hustling, or validating an idea — don’t stress the legal stuff just yet. But once things feel real — money, clients, or risk — it’s time to make it official.
Starting a business can feel incredibly overwhelming and confusing.
That’s where we come in. Just a couple of punk rock, do-it-yourself guys who have started a few businesses, learned a lot along the way, and have a good strategy to help you build a small, sustainable business that can generate profit and set you on the path to freedom from being an employee for the rest of your life.
