How to start selling without setting up a company?
Hey guys, there's advice everywhere to just create the mvp/first version, don't put in a ton of time, TRY TO JUST SELL and see if people actually want to buy your product.
I agree with this approach .
But how do you sell without the overhead of setting up a company AND not having your personal name/details on invoice, billing documents, credit card statements etc.? Thanks.
I would also like to hear what others have to say.
I agree that it's pointless to start a new company too soon, but if you do not have a valid business entity, it can be tricky to get money from the customers.
In this early stages of the project, we have one trick. We implement everything, all (MVP) functionality, pricing models, trial, "go-live" page, emails, support, ... and when a user is ready to convert from trial to live (paid usage), she can click on the "Go Live" button. At that point, instead of displaying form to enter credit card info, we display something like "Your profile is eligible for one-month free use."
By implementing this, users will not know that they don't actually have to pay anything at that moment. On the other hand, you can count conversions, get first "paying customers," analyze funnels, etc...
After that, it shouldn't be too hard to decide to go or not to go with forming a company.
That's a great approach, thanks.
Assuming US, register DBA in your state (https://www.legalzoom.com/knowledge/dba/topic/dba-defined).
It's super simple and very cheap.
You can then use that registered name instead of your real name when e.g. getting Stripe account for credit-card processing.
Second this, you can even open a business checking account with a DBA which is a good way to keep your finances separate.
This was solved long ago.
Make a new email address, create a Paypal account with it, make a buy button and put it on your site. Done.
If PayPal account signed up with a custom email id like "Payments@companyABC.com"is used, what name will show up on the customer's credit card statement?
Thanks
Make an account and try it out. That's the only way you'll feel sure.
Not sure why this is a requirement for you?
For a lot of countries you can start business as a single-person entrepreneur by registering yourself with your authorities (i.e. ~20,- € as a "Einzelunternehmen" in Germany, you can use a "brand name" additionally, but you must use your personal name for every buy/sell transaction) or even just by paying taxes at the end of the year...
Isnt a UG better alternative to Einzelunternehmen?
i mean, if someone sues in case of UG one's personal property and bank account is safe. what are the downsides of UG in this case?
Limited liability is an advantage of having an UG, but it's really a trade-off. Downsides in comparison to just starting out are higher cost (notary when setting it up, advanced bookkeeping requiring a tax advisor, ...) and just generally more bureaucracy (takes long to set up, need to have a dedicated business bank account, making sure you are not technically bankrupt!).
If there are no particularly high legal risks and you are just by yourself, I would definitely get started as an Einzelunternehmer. That's what I did.
Awesomly detailed. Forced to do full blown bookkeeping and tax advice can be a big expense in the beginning.
The only thing I'd add is the caveat that you need to hold back 25% of your profit until you reach the 25k of a usual GmbH and then you need to transition the UG to a GmbH anyway...
I'm too interested in the answer
See above
Setting up an entity such as an LLC is actually much easier than you might think. In many states all you need to do is file a simple form with your business name and address and pay a nominal fee (something like $70). You don't need a lawyer or LegalZoom to do this. It takes about 10 minutes in most states.
If you are the only member of the LLC, you don't have to file any additional tax returns as the IRS will regard your LLC as a "disregarded entity". Just include any business income on your usual individual tax return. That's it.
The only thing you have to consider is potential annual fees / taxes. Some higher tax states charge you for the "privilege" of doing business in their state. In CA for example, this tax is $800 / year. That's the highest you'll see, however. In many other states there is no fee at all or it's somewhere between $50 and $300.
Forming a simple LLC will give you liability protection. This is important. It will also solve your problems with personal details on invoices, billing docs, etc.
What about donating proceeds to the charity in the first few months?
Let me know what you think. Good luck!
I'd say that this is a non-issue for 95% of the starters out there. Unless you have (potential) customers telling you this is a problem, it really isn't.
The majority of your customers won't care whether you're incorporated or not. This even applies when doing B2B.
From a legal points of view, in most countries as far as I am aware of, you do not need a legal entity/business registration when starting out. And when you do, you can always start with a sole proprietor setup. Typically with very little overhead and access to business banking.
Worry about making money first, setting up a company later.
Really, you're right. I agree with you about the rest of the comments. I mean, we buy ideas without even being physically present with us. For example, when you make a previous purchase of a video game or a house / apartment, even when you invest, sometimes, the final product is not finished. In my opinion, you register a company because the state needs to see your activity since you employ people, but if you are alone, you do it to protect it (I am only counting the most relevant factors, there are really different strategies, but as no one mentions a plan really there is no need to deepen). Was the Mac 2 finished when the store boy ordered it? No, or I do not know, I'm just saying what I saw in the movie, but the idea from the first moment was bought, and someone could sell it without any problem.
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I have never had issues receiving payments on personal Paypal or Stripe accounts. Not too sure about how this works in Lebanon though.
If you're location is preventing you from taking payments, then yeah, that would warrant action. Setting up an off-shore company could be a solution. But I'd make very sure there isn't any way to take payments without going that route. Isn't Paypal available in Lebanon? Or 2checkout? Or any other provider? You could also use a service like Transferwise.
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It's really bad. I can understand you, I'm from Venezuela and well I don't know the purchasing power in Lebanon or the minimum wage but here the minimum wage are 2 $ the month so... How can we grow up if our problem its macroeconomics and we don't have a directly way to change it?.
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Might me far fetched but have you checked leapin.eu?
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Wow! That's nice!
Do share in a separate post as I'm sure there are others interested (including myself)! Good luck!
My guess would be, there are a ton of Shopify store owners having an operational business, without setting up a company, by just linking their payment info to their account.
We used a Simple checking account to get started and just piped early revenue there. When we decided the thing was going to work, we got an LLC, a bookkeeper, a lawyer, and a CPA.
This seems an appropriate question for someone from the stripe atlas team to answer...
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Maybe check out paddle: http://paddle.com/ ? Not sure if it solves your problem but at least it handles the taxing for you. I am happy with using it for https://abot.apki.io/
Outside the US LLPs are a common close equivleant of LLC.
Might be (a lot) smaller in applicability, but you could accept payments via cryptocurrency.
If you actually see users pay in crypto, the likelihood of credit card payments are much much higher
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