The Benefits of an LLC: Separating You from Your Business

The Benefits of an LLC: Separating You from Your Business 

In my 1:1 coaching through Your Business Blueprint, one of the things I always emphasize to new business owners is the importance of laying a strong foundation from the very start.

And one thing I hear all the time — from forums, groups, and even from some "experts" — is advice I couldn’t disagree with more:

“You don’t need to set up an LLC right away. It’s an unnecessary expense. Just wait until you’re making more money.”

Honestly? That couldn’t be farther from the truth.

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Filing your Articles of Organization is fairly inexpensive (usually under $150 in most states) — and it’s worth its weight in gold.

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The only things you should do before getting your LLC (or incorporating, if that’s the path you choose) are planning your business and picking your name.

After that? Make it official. Getting your LLC in place should be one of the very first steps you take, and it’s something I strongly recommend to every single client I work with.

Understanding Your Options

Before we get into the benefits, here’s a quick snapshot of your main business structure choices:

• Sole Proprietorship: You are the business. No legal separation. If anything goes wrong, your personal assets are on the hook.
  
  
• Partnership: Same as a sole proprietorship but shared between two or more people — and still personally liable.
• Limited Liability Company (LLC): Offers the personal protection of a corporation with the flexibility and simplicity of a sole proprietorship. (Best of both worlds for most new businesses.)
  
  
• Corporation: Strong liability protection but more expensive and paperwork-heavy, with formalities small business owners usually don’t want to deal with right away.
  
  

The Big Win: Separating You From Your Business

The biggest reason I push forming an LLC early? Separation.

You and your business need to be two distinct legal entities — not just for tax reasons, but to protect your personal assets if things ever go sideways. And you might think you have very little to worry about, especially if you’re not seeing in person clients, but to be frank, this isn’t realistic. People can and do sue over just about anything these days. 

Here’s how it makes a difference:

1. Limited Liability Protection

If your business gets sued, racks up debt, or hits any major issues, your personal assets (house, car, savings) are protected. Without an LLC, it’s all fair game. With an LLC, it’s the business’s assets — not yours — that are on the line.

2. Professional Credibility

Having “LLC” after your business name shows people you mean business. It gives you instant credibility with clients, banks, and potential partners. It tells them you’re serious — and you’ve taken the legal steps to back it up.

3. Tax Flexibility

LLCs offer a lot more flexibility at tax time. By default, they’re “pass-through” entities (meaning you report profits and losses on your personal tax return), but you can also elect to be taxed as an S-Corp or C-Corp if that benefits you later on.

4. Easier to Manage (Compared to a Corporation)

LLCs don’t come with a pile of corporate red tape. No mandatory annual meetings. No board of directors. No endless formalities. It’s just you running your business the right way — with a few simple compliance tasks to stay in good standing.

5. Flexibility in Ownership and Management

Whether it’s just you, you and a partner, or a growing team, an LLC can easily adapt as your business evolves. You can run it yourself or bring in managers — whatever makes sense as you grow.

Bottom Line

Setting up your LLC isn’t just a box to check off later when you're “making more money.” It’s part of building your business the right way from the very beginning.

It protects you, strengthens your credibility, gives you options for how you handle taxes, and keeps your operations simple and flexible.

It’s one of the smartest investments you can make — and it’s one I strongly recommend to all my clients.

Because when you’re building something important, you don’t wait to put up the walls before you lay the foundation. You start strong, and you set yourself up for success.

Your future self (and your future business) will thank you.

Ready to make it official? Click here for a step-by-step guide on forming your LLC.

Need more convincing? Hear how having an LLC has protected me. 

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