^{This transcription was automatically generated. Please excuse grammatical errors.}

Laura Nicole: 0:02

Welcome to your Virtual Assistant Coach, the podcast for moms who want to make money from home on their own terms. I'm your host, Laura Nicole, a successful six-figure earning VA and coach, who replaced my college professor salary in just five months back in 2020, after my daughter was born, and I have never looked back. I'm here to help you build a profitable, flexible VA business that fits into your family's lives, so you no longer feel like you're living just to work. Let's dive in.

Laura Nicole: 0:33

A common misconception that I hear a lot about virtual assistant work is that you have to have either a business license or an LLC in order to really get started and sign clients and have an income be coming into your bank account as a virtual assistant. But that simply is not true. You can absolutely begin working as a VA and signing clients and having your invoices be paid to you immediately, simply operating as a sole proprietor. In the US, that means that on your taxes, you will just be filing as a 1099. So you're an independent contractor, you're a freelancer, you're a sole proprietor. All of those terms are kind of interchangeable. So when you go to file your taxes instead of getting a W-2 from your employer right, we don't have an employer as a virtual assistant Now you will be receiving 1099s from your clients if, and only if, you had earned $600 or more from them throughout the calendar year. But all it means is that you will be filing your income on your personal taxes as self-employed, and that is totally freaking fine. You can absolutely do that, and you can be listed as a sole proprietor and operating that way for quite a while before you really need to consider getting an LLC in place. I'm here to help you relieve the overwhelm and understand what is actually a necessity and what is not, and I have seen too many women steer away from this opportunity of earning an income as a VA because they think that they're going to have to do the business license and the LLC and all the things. So please do not let the idea of excessive amounts of paperwork hold you back, because I promise there's not actually as much of it as you think there might be.

Laura Nicole: 2:19

I am going to walk you through what an LLC actually is, some of the pros of forming an LLC, if you choose to, the cons of forming an LLC. At what point in your virtual assistant business should you actually consider opening an LLC, and then some guidance on how to set one up if you decide that that is the route that you want to go down the line. To explain it really simply, a LLC is a limited liability company and this creates a legal structure that separates your personal assets from your business, from your virtual assistant business. It tends to offer some protection in case something does go wrong when working with a client, but it doesn't actually change your day-to-day work or your structure. You're still self-employed. You are still an independent contractor. There is just now that legal distinction and separation between your personal assets and your business assets. Setting up an LLC is typically really inexpensive usually no more than $100 to $150 for the year, but it depends on each individual state that you live in.

Laura Nicole: 3:25

Some of the pros of forming an LLC reasons that you might want to consider doing this for your virtual assistant business is that it gives you that liability protection If something were to go crazy, crazy wrong off the rails bad with a client and you maybe ended up getting sued someday. Right, if you have an LLC in place, then your personal assets are separate from your business assets and the money that you have in your business. Obviously, that is like a one in a million chance of ending up in a scenario like that. But that is the pro of having this legal distinction between your personal assets and your business assets. To some clients that you work with, they might perceive you having an LLC set up as being more legit or more professional, but again, y'all it is so not a requirement in order to be able to work with clients and have them paying you. Another pro of forming an LLC is that it opens the door to getting an EIN, which is your employee identification number, and having your EIN is what makes it so that you can go out and set up actual business bank accounts if you want to. How to actually structure your bank accounts and where your money flows and setting aside stuff for taxes and all of that we cover pretty in-depth inside of the Superstar Assistant Academy and especially when you're starting out. My personal opinion is that having a separate business bank account is truly not required because there's so many options out there to set up, like extra checking or extra savings account at whatever bank you already bank with. But if you were feeling really strongly about wanting to have business specific bank accounts, you would need to have an EIN in order to do that and having the LLC grants you that EIN.

Laura Nicole: 5:16

And, on the flip side of that, some cons of forming an LLC is number one, that it costs money and, like I mentioned previously, it's not that it's super expensive or this massive investment right that it costs money. And, like I mentioned previously, it's not that it's super expensive or this massive investment right, but it does cost money. It is, in most states, around $75 to $150 for the year. There are some states, I believe, that it's a one-time fee, but I believe it's more common that it's an annual renewal, depending on your state. But for me and both of the states I've lived in since having an LLC, it has been an annual renewal on your state. But for me and both of the states I've lived in since having an LLC, it has been an annual renewal and so I have that expense every year, which leads to con.

Laura Nicole: 5:52

Number two is that it can be ongoing paperwork and maintenance. I have to make sure that I refile that paperwork and pay the fee every year to keep my LLC. And now, mind you, I know I have been telling you that it's not a requirement when you start and now, mind you, I know I have been telling you that it's not a requirement when you start. And then I just said that I have one, but I did not open an LLC y'all until I was three years in to my virtual assistant business. In hindsight I probably could have opened one sooner because of the amount of income I was generating. But I didn't actually open one until I decided to start coaching and open up the Superstar Assistant Academy because for that business it was a requirement.

Laura Nicole: 6:30

Another con is that it's just more paperwork. Right, and paperwork can feel intimidating or overwhelming, especially when you're starting something new and building out the whole foundation for your virtual assistant income. And since it's not required, it's not something that we have to be pouring our time and energy and brainpower into. It's totally fine if it's something that you just put on the back burner and you can come back to it later when you are at a point in your business where you should be considering an LLC. So when is that time right? There is not a magic length of time. There is not a magic set number of income that you hit where it suddenly becomes a requirement.

Laura Nicole: 7:10

If you have an accountant, this is something that I would recommend. Asking your accountant is what point and what level of income on an annual basis. Do they think is a smart point to get this paperwork in and make this separation between your personal assets and your business assets? My personal accountant indicated that it's smart to do once you're consistently, after a couple of years in a row, making $40,000 to $50,000 a year. But I have heard totally different numbers from different accountants. I've heard $20,000. I've heard $100,000. So I'm not going to tell you a set number or a set length of time that you should be in business before creating an LLC. I am going to encourage you to reach out to an accountant that can know your personal situation and give you advice on this. But my advice would be that when you're ready to add things in like business bank accounts and you feel like you're at a point where you want that added protection for your personal assets versus your business assets, then that's a good time to at least start the conversation with an accountant. But opening up an LLC should be something that you think of as a growth step in your business and not as a starting line requirement.

Laura Nicole: 8:23

Now, if you do decide to talk to an accountant and the conversation between y'all leads you to feel like setting up an LLC is something that you want to go ahead and do, there is obviously paperwork attached to it and things that have to be submitted, but in most states it's a pretty easy DIY process that you can do via your Secretary of State's website. Or, if you're like me and you don't necessarily trust yourself to get the paperwork exactly right, you can use services like LegalZoom or a lot of times, your accountant can actually submit your paperwork for you and, like I mentioned prior, the cost to register your LLC and then also the annual renewal for your LLC will vary by state, so you'll want to look it up for your state individually. But this is the type of paperwork that you actually can keep pretty simple, whether you DIY, legalzoom, use your accountant, but you don't need, like a lawyer, for example, to file an LLC for you. If there is any one thing that you take away from this episode, let it be the fact that you cannot let the fear of getting it quote, unquote wrong stop you.

Laura Nicole: 9:30

Most new virtual assistants start as sole proprietors, as the 1099, as the independent contractor, where you're filing your taxes as self-employed, and then figure out the LLC and the EIN and the business bank account and all of that stuff a little bit further down the line. Once they're working with clients, they're generating an income and they feel ready to make that distinction. If this episode has helped you feel a little bit more confident in the process of getting your VA business up and running, share it with another mom who's considering virtual assistant work, because we do not gatekeep around here. And if you want the full step-by-step system to get your VA business off the ground in just 28 days, then you absolutely want to get your booty inside of the Superstar Assistant Academy. I'll leave that link for you in the show notes. Thanks for hanging out with me today on your Virtual Assistant Coach. If you loved this episode, be sure to share it with your best friend, your sister or even your favorite coworker, who you know wants to start making a flexible income. I'll see you all next time.