Good morning money gang and welcome back to the hair extensions business master class. I, your instructor Charlo Greene have, Uhm, well you guys know how I’m not an attorney or anything like that. The thing that I, I know that makes me a great entrepreneur is the fact that I am willing to accept my weaknesses and then go out and find the people that do have the answers or strengths that I need in order to continue building when it comes to legal matters. Like that’s what we’re talking about today. I do not have all the answers. So I decided to have a conversation with a licensed attorney that I will be tuning you into in just a second. But before we get into that, I think it’ll be helpful for you guys to hear everything that I did to take my hair business from an idea to a legally registered and functioning business. Sound good? Let’s get into it. Give it up for the one and only, Charlo sticking iffy Greene, it’s money Monday! I am here for you, whatever you need, we literally got it.
Whatever you need. We literally got, it almost seems like starting hair extensions business is as easy as putting up an Instagram page and making sure that you have somewhere to accept payments for the items people are interested in but is not so simple. At least after you start getting some momentum. There are different laws in different states that dictate exactly when a side hustle goes from a hobby to an actual business. In Alaska, which is where I’m from and where I started, a couple of businesses, I think that threshold is $700. Once you generate $700 doing this one thing, then the state expects you to register whatever that thing or services as a business. If you don’t do that, then you can get a bunch of fines and penalties and you are also probably opening yourself up to a ton of liability. So that’s Alaska’s number or at least the last time I checked, do not take my word as law.
Like I said, I am not a licensed attorney. Um, but all of this information is readily Google-able. You as the boss as that money making machine, as the force behind your business need to get real friendly with Google. Google has the answers. Google will list the answers by ranking what people have found most useful and what people are returning back to. And for the most part when you’re asking about how to register your business, how to make your business legal in your state, state by state, then Google will show you the search result from your state, your state itself actually that lists is the actual requirements for you to register your business. So starting with Google and starting with a search on what your own state laws are regarding registering your business is always a good idea. But once you get past the state stuff there, it’s like, it’s like there are a number of levels of government that want to know you’re operating your business and want to know that they are getting their cut more or less.
So you need to make sure that you have an e I n and employee identification number. That’s the number that PayPal has been asking you for if you have a PayPal business account. Um, that is the number that you take to open, or at least that I took to open our bank accounts. Um, in addition to our state registration paperwork. So that’s on the federal level beyond the state level, on a local level here in California. We also had to register with our local jurisdiction for the business that we are doing here. So it’s a number of different things that you need to Google and get the exact answers from. And I hope that you guys don’t just like click off this video like Ah, I want at the answers, let me find another youtuber. Don’t go to a youtuber unless that youtube is the lawyer.
This is, this is your business. You not doing these things are you not doing them the right way, could cost you everything your building go directly to the source, go directly to your state’s website. They want you to register your business, they lay out the information. So it’s really understandable and easy for you to navigate. Do not play yourself when it comes to this stuff. Oh. And there are a number of like websites and online resources that are also there to help you and they charge a small processing fee for making it all super, super easy for you and like physically mailing and some of the paperwork that needs to be mailed in. So do not sleep on those resources. Huge companies, they exist to help you get this part done cause you got to get it done right. I’m not saying that to scare you but get it done right.
Room grownups. We’re building businesses here. Now personally speaking, like I said, I’m not okay with giving legal advice but I am willing to discuss what we did when we were starting this business. When it came to us, we went through rocket Boyer, they registered us with the state and with the local entity that we needed, um, probably took maybe 15 minutes for us to fill out all of that information. I hated the fact that it took like 40 days for them to return all of our paperwork. But those are just often state processing times and the cost of going through someone else to register it from there. Once we had all these state registration papers, we went on the, the IRS website and registered for an employee identification number for our corporation. Um, and then from there we took all of those papers to the bank and opened up our bank accounts.
Um, we shared all that information with our tax attorney so they handle like the quarterly filings and all of that stuff that we have to do every few months. Here we got business insurance because we’re like in an office building and it was required by our lease. Not sure if that’s totally necessary for anyone else, but I do know that each provides us some level of protection in case of any legal situation. So again, not too comfortable sharing legal advice with you, but this conversation with this attorney that I hired to have a one on one with him and then all of us conversation to answer all of these questions I think is going to be super helpful about registering as an LLC or a c Corp or an s Corp or like all of that stuff. Super important. So go ahead and check it out. Now. Okay.
And so back to company formation questions because I know this is a big one. Um, what is the difference between a sole proprietorship, an LLC, a corporation? Um, I don’t think anyone is asked about an s Corp or a c Corp, but so you don’t have to go into too much detail, but what are the differences for one of these entrepreneurs to consider when making this decision?
Okay, so the, the sole proprietorship is really the simplest form of, of incorporation, which is essentially you’re just out on your own. There’s nothing you have to do. You just go into business. Now you may still need business licenses, you still need to comply with your local jurisdiction. But as far as actually being engaged in business, that’s it. It’s just Mark billion on its own. So now the benefit is it’s really easy to do. The detriment is you get no protection. All right? If anything goes wrong, you’re suing me. If the bill doesn’t get paid by a vendor and you know what have you, you’re suing me. Everything comes back to me. Now what the LLC is, is essentially it’s a device that’s created to keep things really simple. Okay? It’s a business. It’s a separate entity from you, which means they can sue and be sued in its own name.
It can get credit and its own name. You can do all this stuff and you’re not personally liable unless you signed a guarantee, so it gives you some, some real protection. At the same time, they’re very easy to set up. You know the Form is about a page long. You have an agreement that just says, this is how we’re going to run the company. I will be honest with you, if I were selling hair extensions retail, I probably would stay with an LLC unless I had a lot of partners or a lot of outside investment. Um, and especially when you’re just starting out, what I’ll tell you is you can start an LLC and if you need, if you’re a customer, say you needed to grow to a point where it’s worthwhile, you can always with a couple of hundred dollars create a sale contract and sell it to a c Corp that will do what you needed to do. But I probably would just do an LLC.
Another question that was raised in our group was when should someone consider trademarking their logo or any of their branding? Um, when should someone consider protecting their intellectual property?
Two, two statements on that. One is this, sooner is always better. Two, trademarks are used. There are defined through use. Once you start using the trademark, that also gives you the ability to say, look, this is my mark. This is synonymous of my brand. And it gives you some protection, registration and answer that protection that I think that’s important. I will tell you that the trademark litigation, this is kind of the flip side to that, is in its ordinance, really expensive. And so you know, if you see somebody else who is using your mark, you know, if it’s where it’s always we are sending a letter, but understand that actual litigation is very expensive. The biggest reason to protect your trademarks is to make sure that no one else tries to strong arm you out of if your trademark is registered, if you’re using an open it victoriously. Then when somebody else from California says, Mark, you know, this is our trademark. I get to say, no, no friends, I’ve been using it in Delaware for five years. This is my trademark and it gives me a leg to stand on because most legal issues for small business owners are defensive rather than office. And you want to be able to say, no, I’m not giving up my trademark just because you think you deserve it. So that’s how that works.
Like you were saying, most trademarks, um, aren’t technically worth much. Um, but if someone is dealing with a limited budget, I said that might be a misappropriation of funds at this early point when they haven’t sold um, a single package or proven that their business has any legs or will grow. Um,
so I couldn’t agree with you more. Once you know you’re really getting traction with your product and, and let’s be really a product in the beginning he was going to sell it. It’s a quality product. You can worry about trademarking it then.
And you’re also saying once you actually start using it, whether it’s registered or not, that provides you some level of protection
For the full video, go ahead and click this link was a thorough
and deep conversation with this attorney. I’m sure if you have any other questions we definitely answer them here. Go ahead and give that a watch. And in the meantime, two days homework, go ahead and drop the actual link to your state’s website where you can find the information you need on what’s required to register your business. Go ahead, drop the link. Let’s see. How many of you have that Google ability that is going to mean the difference between your success or your stagnation. Let’s see, who’s willing to Google to find the answers they need to protect and safe. Keep the business that are building that is going to provide them the life of their dreams. Looking forward to seeing these links in the comment section. You all till tomorrow. Push.