What they DON'T TELL YOU about starting an LLC (Why most fail in 3 years)

what's up everyone it's prince dino founder of jumping jack tax and the jack franchise and today we're going to be talking about the things they don't tell you when setting up an llc i appreciate you for watching this video you've probably watched a ton of videos on setting up an llc and everybody's giving advice and et cetera and as you know if you've been following my channel i'm always going to provide you with a different perspective from a business standpoint because not only am i running a uh uh a financial services franchise but it but actual business as well and i like to talk about how business truly works and how you're going to be successful and not just blowing you any smoke so if you watch my channel you know i always give you different perspectives and angles to think about as an entrepreneur not just from a financial standpoint or a legal perspective so let's get into it i want you to like comment and subscribe if this video is valuable to you please and recommend this to somebody else who's new into the world of entrepreneurship so let's get into it first things first right when setting up an llc again there are maybe a thousand videos on youtube right now give you all the steps on how to set it up you know some recommend the diy do it yourself right they show you ways of doing it yourself and how to go through the state websites and uh to keep it very affordable for you and setting up the llc in your home state and then setting up your ein number and then uh finding your actual name that you want and registering that business and all of these different ways in order to set this up right but in a lot of videos that i saw there were things that people weren't telling you from a business standpoint right that that ultimately is going to lead to your success in the future or your demise because honestly setting up an llc is the easy part right that's the easy part but the mindset in the fight the mindset the financials the marketing the the principles the values those are the things that actually attribute to real success not the llc which is the reason why there are a ton of llc's that are being created today but many of them aren't even generating any revenue they're they're dormant they're they're inactive so we don't want that right because we have that then it means that we're not leading further to our goal of developing a successful business and whatever successes is considered to you so i want to talk about the things they don't tell you and i need you to write these down because this is going to save your life okay let's get into it first things first number one learn how to let other people do the work for you learn how to let other people do the work for you here's what i mean by that when it relates to llc or establishing a business i've seen a lot of videos online talking about doing it yourself personally speaking and this is just my opinion i would never ever ever ever ever set up an llc myself never number one there is work that's involved number two it's going to require my time it's going to require energy and busy work i want you to think of yourself as a ceo you are valuable every hour of your time that you spend on doing something it's costing you money it's costing you money for me the amount of value that it would cost me is different than you because how much i value that in an hour and how much you're valued at an hour is different as you begin to grow in business your value per hour becomes a lot different now so when you're spending this time setting up this llc that is time you could have been spending on thinking of new ideas to help that business grow in revenue not sitting here fiddling around with paperwork especially when you can pay somebody 200 bucks to be able to set up the llc on your behalf i would never ever ever do it now again if you're just straight strapped for cash and you have no money at all i'm sorry to tell you this but if you're strapped for cash you got zero bucks you probably shouldn't be starting a business anyway right because you're not in the right financial state to start a business yet you need to build up a couple of some capital work work get a job get a check and start saving some money so you have the necessary capital to start the business so if you strap for cash probably not the best idea for you but if you're somebody coming in this you got a couple thousand dollars saved up etc they don't got to be a lot of money let's say if it's a thousand two thousand three thousand bucks then spend that 200 on getting somebody to set up the llc for you learn how to allow other people to do the things for you by using your money to do that that is a mindset thing if you don't learn that step number one you're going to continue to do this over and over and over again and start doing things that other people could be doing for you because you're afraid to spend money because you're still in an employee mindset and that employee mindset is i gotta do everything and not direct other people to do it on my behalf you have to learn this if you want to grow we're not talking about this mom and pop sole proprietor thing you got to learn that that's a leadership concept that is an investing concept that is a spend money in order to make more money concept that is number one in business and entrepreneurship so all the videos on diy i don't agree with because i would never waste my time doing those things ever i would get somebody else to do it for me because i believe my time and my thoughts are valuable so anyway that's number one please write that down number two write down your values and principles that your business stands on if i were to ask you right now just individually what what do you stand on you probably like well don i stand on respect honor integrity trust this is these are the things that that make me these are my principles right some people don't even got principles and again if you don't even have principles set forth for your life the odds are you shouldn't be starting a business if you have principles set forth for your personal life then the business itself is its own person it's its own entity it's why it has an ein number and employer identification number right it has its own social it's its own entity which means it needs to have its own principles and values as well i'll give you an example of that chick-fil-a is a company that i love i stand chick-fil-a i i actually did a whole insta story on them love love love love love love love that company why do we all love them because they stand on a certain set of principles and values that they have not changed for years one of them in particular which i was just reading online is that we all know that chick-fil-a is a uh is they believe in god right chick-fil-a believes in god they believe in in honoring the sabbath they they like that so much so that they closed on sunday and they have not changed that at all and we've all know we all know that chick-fil-a closes on sunday and we got to go on saturday or any one of these days because we know you know chick-fil-a believes in god they believe in the sabbath etc they believe in they have a strong principle of faith and that's why they closed on sunday and it relates in their work and what they do and when we show up in that drive through how they treat us the respect level that they give us right that honor them knowing our names and etc those are all principles and integrity those are principles and values that they have set forth amongst that company to where everybody that works within that organization they all have a clear understanding of that and as customers we have a clear understanding of that too when we come to their establishment to spend money so what i need you to do is write down your principles and your values that you want this business to stand on because when you start having family friends and people that are now involved in the business if they don't got principles and values that they're standing on then they're going to start doing things that you do not appreciate why it's your fault because they didn't know that this is how i gotta operate even customers customers come to you and they start they start treating you and your employees and your team a certain type of way you got to know based off your principles and values what you're going to accept from a customer which you are simply not going to accept because it's going to play into the future it's going to play into your customer service i'm telling you guys from experience when it comes to the jumping jack tax franchise one of the first things when we were setting up our operations manual for our franchise was the guy said well don what is the principles what are the values that the company stands on it was integrity it was faith it was trustworthiness it was it was a ton of different things that we were drawing out and i said i said wow i didn't understand how important this was he said exactly if you want to be successful as a franchise you have to set these principles you have to set these values down this is what the company's stands on it's like it's bible i need you to have that if you want to scale your llc and this should all be done before we even talk about any sort of launching our business from here now let's move to number three create a back-to-front spreadsheet on how the business makes money this is probably most important to me because i feel like we go into business immaturely and we want to set up an llc we want to launch this business but yet we don't even know how the business makes money or how it makes profit or how much money we want to make as the actual as the business owners so for example when i say run a spreadsheet on your business from back to front all right let me ask you question number one how much money do you intend to make in your first year of starting this business of this llc how much money you intend to make if you don't even know the answer to that and by the way i mean the biggest thing i hear people say is a million dollars i mean hey if that if you if you intend to make a million dollars i'm not sitting here trying to uh discourage you but i think a lot of times we say a million dollars simply because we think that that's the coolest thing to say not realizing that even if the business made 250 even if it made seventy five a hundred thousand in this first year that was still very successful because most businesses don't do that in their first years even at 100k so we were to use an example and you were to say to me don i want to make i want the business to make a 100 000 this year i would say great and if you don't know that as of yet you need to figure out how much you wanted to make i want my llc to make a hundred thousand great now that i know that it that it it's i wanted to make 100 000 now what i'm going to do is i'm going to run this from back to front now and i'm going to use my calculator so we can do this together i want you to type 100 000 into your calculator for me now that you have 100 000 typed into your calculator you're now going to divide that 100 000 by 12 because we have 12 months in the year that's going to give me 8 33 per month that i have to make now with that 8 33 per month i want you to divide that by four because that's going to tell us it's four weeks in a month now that means you need to make 2083 dollars per week right now that i know i need to make 2083 dollars per week let's just divide that by five that means that over the course of a five day running period monday through friday not including weekends i need to make 416 dollars per day so 416 five days a week is 2080 uh in a month 8 320 by 12 that's about 99 000 840 just a little short of a 100 000 now i know at that point that i need to make 400 or so dollars per day that's my goal that i have to make now i have a goal establish a revenue goal for my llc now again it could decrease a little bit if you're making money on saturdays and sundays too four hundred dollars per day is what i got to make so what i need you to do right now is depending on what your yearly goal is and now you ran that from back to front now you ask yourself okay now now you want to write that goal down and you want to say okay i know i need to make 400 per day i want you to put that on your phone i actually had it as my screen saver at one point in time in the beginning phases of starting the business that if i don't hit this 400 gold per day then i got to keep going all night until i get a customer that's going to get to this 400 goal if it doesn't i'm not going to sleep because i can't afford to go to sleep right now i have a goal that i got to reach right but let's go a little deeper on this back to front before i move on from there now that i know i need to make 400 per day in order to hit gold i want you to now ask yourself when running this from back to front how much does your product or service cost so i'll run two examples here let's say that what you're selling costs twenty dollars and then it's a ten dollar expense for that product so you're actually only profiting ten dollars so now if i know i'm only profiting ten dollars but my goal is 400 because again my goal needs to be 400 in profit right so if my goal is 400 now i need to divide 400 into that 10 in profit which means that i will actually need to sell 40 units per day in order to reach my 400 gold the question now becomes can you sell for 40 units per day right so you got to think about that from the very beginning if i have a service and my service is 250 right for example in tax preparation it's a 200 it could be a 200 to 250 customer but my goal is 400 then now i know that i need about two clients per day in order for me to hit my 400 goal now you know how much money you plan to make each day now you will also know how many customers that you need in order to hit that goal you're not going in blind anymore into your llc you're going in with in with with intent on where you where you need to be and how you plan to get there if you're not doing that then your llc is going to fail it's no sense of setting it up it's a waste of your time so let's move into number four now what is your marketing strategy on bud or budget when it comes to launching your llc when it comes to launching your business do you have a marketing strategy set up do you know how you're going to market do you have a budget established which that's why i said in the beginning of the video if you don't got no money when starting this business i mean you might have to wait a bit because you you need to have a budget when going into this thing now what is your strategy if your strategy is simply to post on on facebook and on instagram and on youtube and you expect that people are just going to buy just because you posted it i'm telling you now as a realistic person that's not that's you're never going to get sales it does not work by you just posting something online and people are going to buy that does not work you're never going to get the sales so if you don't have a marketing strategy you don't have a marketing budget established to be honest with you i'm being very serious with you here i would rather i would rather spend my 1 000 my 2 000 whatever money you have as the seed money to start the business i would rather spend that money on taking a course on social media and facebook ads somebody who teaches social media somebody who teaches how to run ads i would rather pay for a course on doing that before i actually launched a business because you have no business if you have no marketing you i'm saying one more time you have no business if you have no marketing you're never going to get customers because they don't know who you are they don't know what you sell they cannot find you especially when you have a marketplace where businesses are opening every day and it's becoming even more competitive meaning that the one who markets the best is the one who's the winner even if you have a superior product i might have a subpar product but extraordinary marketing strategy and campaign and budget and i'll beat you every day of the week because nobody knows who you are i'd rather spend the money on understanding marketing so please have a strategy set forth and if you don't have one do not open up the business yet pay for a marketing course so you can understand how social media works as of right now so you can get ahead when you actually decide to launch if you do have a marketing strategy and a budget set forth good for you because that is a very very very very important and vital piece to actually launching your llc your business forward to see a level of success number five and this one is going to be quick search all social media platforms before launching this llc listen to me clearly it would it would suck for you to start a business and then come to find out somebody else has already been marketing that name and they're well they are way more established than you are they are way more established they have more data points when it comes to facebook instagram youtube blog sites and all these different the hashtags i promise you you're never going to beat them because they have too much equity on the internet please be mindful and search all platforms search facebook search instagram search youtube search tick tock search just google for blog sites so that you can know that that name is not relatively is not it's not very relative on the internet now it's one thing if somebody else does have the name but they don't have a lot of equity behind that name you might be able to come in and with the right marketing strategy you can say hey i'll i'll become the top person but if it's somebody that already is very well established with a footprint there i would not suggest doing that you're going to waste a lot of money just trying to just trying to solve the confusion that people are going to have when it comes to trying to search your brand from somebody else that's already established right so don't do it to yourself search all platforms before you start that llc that's very very important every single platform and last but not least number six you're going to set up separate bank accounts once your llc is established so like i said pay somebody to get the llc established within 14 days maybe 21 you're going to have all your llc information back your um you're gonna have your articles you're gonna have your ein number um you're gonna have your operation agreement with all the things that come within that llc once you have that information if it's a partnership you're gonna have to go to the bank with your partner and if it's a single member llc you could go to the bank by yourself make sure you bring that in that entire llc booklet that they're going to give you and you give it to the banker and tell them that you want to set up all separate bank accounts now to me there are a few different bank accounts that you want to set up and i'll talk about this in a separate video but i'll give you guys a synopsis synopsis the way that i operate it is that when you set up separate bank account you're going to set up an operating account you're going to have an operating account set up you're going to have a marketing account set up you're going to have a reserve account set up and you're going to have an innovation account set up and you're going to have a tax account set up so there's going to be five different accounts that you're going to be setting up when it comes to opening the business and by the way you can open up as many bank accounts as you would like there's no cap to it but those are the five accounts that i set up in a separate video i'll break down why i set up each and every one of those five accounts and how they play a part in your growth in the future because i'm not thinking for right now i'm thinking for the future not as a single member llc so just to recap all six things that we talked about right now learn how to get learn how to let other people do the work for you right don't do the diy method pay somebody to do it because your time is valuable number two write down your values and your principles that that business is going to stand on use chick-fil-a as the example like i talked about because they they they're very good at that phase of what i'm talking about around values and principles number three create a back-to-front spreadsheet so you know exactly how much money you you intend to make that year um how much you need to make per day and if your product or service can even hit that goal because if not you should probably start another business because you're never going to hit that goal with that type of business model number four do you have a marketing strategy in a marketing budget set forth before launching this business if you don't then you need to pay somebody for social media uh marketing training and learning ads before you even start that business because the business the marketing is what makes the business number five search all social media platforms for that name before you even move forward so that you're not caught in a pickle and then you get destroyed and then number six set up all separate bank accounts um for the business which again i'll do that in a separate video to talk about that these are the six things that they don't tell you but when starting this llc they just say get an llc but this this is real business that i'm talking about right here things that you need to understand before starting a business and then just running into things and you have no plan you have nothing at all and i'm not a big fan i'm not a big fan of saying i got a plan all the way down before starting something but i need to have an idea before i do something i need to have an idea right um and that's important um when doing these things so those are my six things that they do not tell you when starting an llc please take heed these are all things that i learned from experience and it'll help to change your life so you have a better uh you have a better launch of your llc so that it doesn't become just another failed llc in the united states of america

Channel: Prince Donnell

Views: 262,453

Keywords: how to start a business, llc, limited liability, accountant, setting up llc, what state should I start llc, legalzoom, prince donnell, dana chanel, jumping jack tax, jack life, curlbible, bank, cpa, financial, scorp, profit firtst, save money, make money, money advice, top 5 banks, wells fargo, pnc, bank of america, taxes, pay your taxes, ppp loan

Id: WBhrVubA9Vk

Length: 21min 20sec (1280 seconds)

Published: Fri May 28 2021