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how can i start my own business at 16?
what do i need go get? how can I make it legal? whats a LLC? why cant I run it alone at 16?
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deborah’s Answer
Hello Sebastian! Yes, you can start a business at 16 and run it alone. It is wise that you want to set the business up correctly. Since you are under 18, then parent/guardian may need to help you set up the business because of bank accounts, and other accounts to take payments, pay bills etc.
The type of legal structure is highly dependent on the type of business, risk, income, has employees, as well as tax obligations - income and sales tax. As a business owner, you are now "self-employed" and the IRS has rules about this. It is suggested that you get an EIN (employer identification number) so you don't use your social security number when setting up accounts.
No legal structure - Babysitting, dog walking, tutor, lawn mowing in the neighborhood, social media marketing, etc. could be businesses that do not generate enough income and deal in cash, and low risk.
Sole Proprietorship - also known as a "DBA" (Doing Business As) Example: Sebastian doing business as ABC Company. Typically counties require anyone who has their own business register it. Can only have one (sole) owner and low risk. Minimal start-up fees.
LLC - known as a Limited Liability Company is very popular for small businesses. You can have one or more members "owners." The benefit of an LLC is that it protects your personal assets should there be any legal issues. The LLC is recommended for any business that has a higher degree of risk associated with it. Medium start-up fees.
Of course, I suggest you get the advice of a tax/accounting professional to determine which structure you may want to use.
I hope my answer is helpful to you. Good luck!
https://www.nerdwallet.com/article/small-business/business-ideas-for-teens
The type of legal structure is highly dependent on the type of business, risk, income, has employees, as well as tax obligations - income and sales tax. As a business owner, you are now "self-employed" and the IRS has rules about this. It is suggested that you get an EIN (employer identification number) so you don't use your social security number when setting up accounts.
No legal structure - Babysitting, dog walking, tutor, lawn mowing in the neighborhood, social media marketing, etc. could be businesses that do not generate enough income and deal in cash, and low risk.
Sole Proprietorship - also known as a "DBA" (Doing Business As) Example: Sebastian doing business as ABC Company. Typically counties require anyone who has their own business register it. Can only have one (sole) owner and low risk. Minimal start-up fees.
LLC - known as a Limited Liability Company is very popular for small businesses. You can have one or more members "owners." The benefit of an LLC is that it protects your personal assets should there be any legal issues. The LLC is recommended for any business that has a higher degree of risk associated with it. Medium start-up fees.
Of course, I suggest you get the advice of a tax/accounting professional to determine which structure you may want to use.
I hope my answer is helpful to you. Good luck!
deborah recommends the following next steps:
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Jennifer’s Answer
Congratulations on considering starting your own business at such a young age! I was in your shoes once and found the experience incredibly rewarding. It's fantastic that you're thinking about taking this step, and I'm here to help you navigate the process.
Firstly, research and planning are key. Before diving in, thoroughly research your business idea, understand your target market, competition, and potential challenges. Having a solid business plan not only guides you through the initial stages but also helps secure funding if needed.
The most challenging part for me was getting insured, so as you consider what business you want to have it is important to talk to other professionals in the space to see if they have insurance and if so what kind. You will then have to do insurance for a company that will cover you at 16, which may require a lot of research or a cosign from an adult. Don't let things like this limit you!!
Moreover, starting your own business at a young age can open up scholarship opportunities. Many organizations and universities value entrepreneurial spirit and offer scholarships specifically for young entrepreneurs. Your business venture could not only provide valuable experience but also help fund your education.
Lastly, seek mentorship. Reach out to experienced entrepreneurs or mentors in your chosen industry for guidance and advice. Their insights can be invaluable as you embark on your entrepreneurial journey.
Remember, while there may be challenges along the way, being resilient and persevering through them is part of the journey. Wishing you the best of luck as you embark on this exciting adventure!
Firstly, research and planning are key. Before diving in, thoroughly research your business idea, understand your target market, competition, and potential challenges. Having a solid business plan not only guides you through the initial stages but also helps secure funding if needed.
The most challenging part for me was getting insured, so as you consider what business you want to have it is important to talk to other professionals in the space to see if they have insurance and if so what kind. You will then have to do insurance for a company that will cover you at 16, which may require a lot of research or a cosign from an adult. Don't let things like this limit you!!
Moreover, starting your own business at a young age can open up scholarship opportunities. Many organizations and universities value entrepreneurial spirit and offer scholarships specifically for young entrepreneurs. Your business venture could not only provide valuable experience but also help fund your education.
Lastly, seek mentorship. Reach out to experienced entrepreneurs or mentors in your chosen industry for guidance and advice. Their insights can be invaluable as you embark on your entrepreneurial journey.
Remember, while there may be challenges along the way, being resilient and persevering through them is part of the journey. Wishing you the best of luck as you embark on this exciting adventure!
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