In the end, whether filing an LLC is right for you and your business will boil down to what your hustle is and your risk tolerance. For a legitimate business, it's generally a wise decision to keep the finances of your entity separate from your personal assets, according to Horwitz. To do so, he says filing as some sort of entity — whether its a C corp, proprietorship or an LLC, with your state, is the best way to go.
"Commingling business and personal assets basically undoes the whole reason you set up the LLC in the first place," Horwitz warns as he guides me through the final step of opening a business checking account. At this point, I was able to open the account with my remaining $500 and the newly minted Crypto Crow LLC Employee Identification Number I got from the IRS after my LLC was approved.
It was a little disheartening to lose nearly half of my budget to governmental red tape and archaic laws, but so goes the cost of compliance and avoiding headaches down the line.
With about half of the second week gone, I was ready to get started on what I actually set out to do: launch a line of crypto clothing.
A business is actually born
With a legit business set up, I squeezed a few free t-shirt designs out of my co-worker Bryce. Then, via Fiverr, I found a gentleman in Bangladesh who created several others for $5 a piece. Thanks to my own sketches, Bryce's work, and my Fiverr hire, by the end of the week, I had about 20 designs to put on t-shirts, hats and mugs offered by Printful, and I had only spent about $50 to acquire them.
With my business model, I didn't have to spend capital on massive quantities of products. (Nothing gets made until a customer buys the design and Printful prints it on a product.) In an ideal world, this lets you test out a bunch of designs to see what sticks with your target audience.
To Chapman, this benefit cannot be overstated.
"You are not the one that will decide if anyone's going to buy, the market decides. So you just need to listen to the market like a wise old man," he says. "Too many people fall in love with their products and they're certain that the market is going to love it as much as they do and so they go bankrupt trying to push the product that they love.