Charlo:
 
I’ve been teasing this conversation for a while now. I have a licensed attorney on the line with me. 

Watch this video on my YouTube channel, Six Figure Side Hustle with Charlo Greene.

So, let’s go ahead and get started.

Mark, are you there?

Mark:
I’m here.

Charlo:
Thank you so much for taking time out of your day to have this conversation with me.

Mark:
Well, thank you. Thank you, I’m looking forward to it.

Charlo:
So, can you do me a favor and give me and my group a little background on your own legal experience?

Mark:
Well, so I’ve been doing this for about 12 years now. That’s scary to say, but I’ve been doing it for about 12 years. I graduated from Columbia Law School and worked for Columbia [inaudible 00:01:21] and worked for a year, and went out on my own shortly after that. I’ve been advising startups and smaller companies now for the better part of a decade. And have also had, I mean I’ve had some great cases with some larger companies. I’ve represented Microsoft. I’ve represented [inaudible 00:01:35], things like that. So, I’ve been around the block a time or two and really enjoyed it. So that’s, oh, and my mother thinks I’m very smart. How’s that?

Charlo:
That also works. So, our group is mostly, it mostly consists of women that are starting hair extension businesses. So, retail businesses fr the most part. And most of them are first-time entrepreneurs, so a lot of questions that I get that I’m not in a position to answer because I don’t give legal advice. But there are a lot of questions surrounding what steps need to be taken for these women to keep their businesses legal or not get into any trouble later on down the line.

Charlo:
So, where should?

Mark:
Absolutely. It’s just a, first of all, congratulations all of the other who are doing this. That’s, I started my own business. It’s scary, but really a wonderful thing. Just so we’re clear, I’m not giving anyone legal advice either. This is all just general information. Got to [inaudible 00:02:43] happy. But anyway, yes.

Charlo:
So, what are the, when does someone need an attorney? When does a first time entrepreneur need to consult with an attorney?

Mark:
Well, okay. So, to some extent, there’s a couple reasons you would want to start with an attorney real easy. Or real early, rather real easy also. Is one is, if you’re involved in a situation where your business is subject to a great deal of regulation. So, I’ve advised certain doctors who are concerned with stark and other anti kickback laws, coming up with business models that meet those requirement. They know there are regulations out there. They know they have to meet them. I’m going to guess as far as hair extensions go, there’s not a great deal of regulation outside of the FTC, is that fair that you guys are aware of?

Charlo:
Yeah, it’s mostly unregulated outside of people actually applying the hair extensions, which is like hair license or a hair cosmetics licenses and that sort of thing. But this is just for the retail portion of things.

Mark:
Sure. So, the only reason I asked was I wasn’t sure if there might be some if you’re dealing with real human hair. But as it goes, if you’re not dealing in a heavily related industry, there are a couple of reasons why you want to consult with an attorney. One, and I’ll be honest with you, attorneys are negative by nature. I mean, we don’t look on the bright side of life. That’s not what we’re [inaudible 00:04:09] to do. And the reason I mention that is if you’re dealing with partners, if you’re dealing with investors, if you’re dealing with anything that can lead to conflict down the road, you want to talk to an attorney early on.

Mark:
Now if it’s just you starting a hair extension business where you’re buying your hair extensions from place X and selling them at retail, here’s what I’ll tell you is you may still want to contact an attorney, but you probably are going to want to ask very specific questions.

Mark:
First is can you set me up an LLC? My own personal view is that LLCs are very inexpensive and worth every dollar. The reason I say that is because it gives you a level of protection that you get without having to buy any insurance. It gives you the ability to work under a brand name without having to register a DBA, which is slang for doing business as. And it’s probably the first step in becoming kind of a legitimate entity outside of yourself. And the other thing is to the extent that anyone wants to purchase you or go in with you or co venture with you, you have a vehicle to do that. Now that shouldn’t be very expensive.

Mark:
I do them. I do quite a few of them. I will tell you that if you’re a single member LLC, meaning it’s just you setting it up, being frank you could probably use swift filings or CSC to do it. I don’t have any problem with that if it’s going to be you and some partners. Really where the lawyer comes in is hammering out what happens among partners. And so if you’ve got partners it’s worth doing. If you’ve got supplier issues where you’re doing something other than just either cash on 30 days or something, that’s also when you need an attorney. Does that make sense?

Charlo:
That does make sense. So, I know that a lot of people that are starting off their hair businesses, they utilize PayPal which doesn’t require an EIN.

Mark:
Sure.

Charlo:
So, when someone is doing that, my understanding is all of that is, the liability is put onto that individual person.

Mark:
Right. So, the way it works is if, let’s assume that something bad happens. And I’ll be honest, in your business, something bad happening is probably less likely than if you’re running a brew pub say, where somebody could choke or somebody could get food poisoning or something like that. Or at least that’s my initial 30 second guess of your industry. But as far as something bad happening, yes, if you don’t have an LLC, they will sue you personally. But the problem that you come into is if they sue you personally, you really don’t have any choice but to defend the lawsuit. Because if not, they’ll get a judgment and you’ll either have to pay or file bankruptcy, neither of which are great options.

Mark:
If you have an LLC, you may simply dissolve that LLC and/or I shouldn’t say dissolve. That’s a technical term that you probably wouldn’t do. But allow that LLC to go fallow, and start another LLC in its place, which is easy to do and which gives you some protection from lawsuits. Now, whether or not PayPal is processing using your EIN or a Social Security number, to the extent, still using an LLC, you still have some protection. That said, getting an EIN is extremely simple. It’s extremely simple if you have an LLC. You could go to the IRS’s website and they’ll set it up. If not, you need a form SS4. I would recommend you use the website because at this juncture, the IRS is not functioning. So, if there’s going to be a backlog if you send in paper forms.

Charlo:
Okay. And so, back to company formation questions, because I know this is a big one. What is the difference between a sole proprietorship, an LLC, a corporation. I don’t think anyone has asked about an S corp or a C corp. But, so you don’t have to go in too much detail. But what are the differences for one of these entrepreneurs to consider when making this decision?

Mark:
Okay. So the sole proprietorship is really the simplest form of corporation, which essentially, you’re just out on your own. I mean, that’s it. 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 with business, that’s it. It’s just Mark Billion on his lonesome.

Mark:
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 a bill doesn’t get paid by a vendor and what have you, you’re suing me. Everything comes back to me. Now, the benefit of it is, you don’t have to pay the yearly tax, which is in Delaware where I am a franchise tax or what have you to keep the LLC open. But for a couple 100 bucks, I think its probably worthwhile to look at an LLC.

Mark:
Now what the LLC is, it was, 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 it can sue and be sued in its own name. It can get credits in its own name. You can do all this stuff and you’re not personally liable unless you sign a guarantee. So, it gives you some real protection. At the same time, they’re really easy to set up. The form is about a page long, you have an agreement that just says this is how we’re going to run the company. And that’s it.

Mark:
Now, I don’t, on a detailed level, I don’t I’ve tax advice, but what I will tell you is you can choose how it’s taxed. You can choose to have it taxed like sole proprietorship or a partnership, which means that at the end of he year if you made $500,000, you just report that on your personal tax return as $500,000 in business income on a schedule C. [inaudible 00:10:24].

Mark:
Or the alternative is you can be taxed like an S corp, rather a C corp where it holds a taxes, where the money states there, and you pay your taxes on it. And you personally only get taxed when you take a dividend. Now if you’re thinking wow, that sounds really complicated, that’s fair. That’s why most people who use LLCs simply allow that to pass through, and then they put on a tax return I made $500,000 from hair extensions, and it’s easy.

Mark:
Corporations, and the other thing I’ll say about LLC is, they are good for kind of low end partnerships or low end deals. If it’s you and a friend doing something, you can both be 50/50 members of the LLC. If you’re going to have shareholders, which are a whole different bag, then you need a corporation. Now, a corporation is run by a board that’s elected by the shareholders, so we’re talking about selling shares, having shareholders, having board elections. There’s a quite a bit of work that goes into running a corporation. All corporations whether they’re a C or S corp run the same way. The C corp however, is kind of a full-blown corporation that would be, GE would be a C corp.

Mark:
And S corp can have up to 100 shareholders. And so, it’s kind of a mini version of it. And typically unlike a C corp which has to pay corporate taxes, and S corp can let you declare the returns on your own tax return. I I’ll 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. And especially if you’re just starting out, what I’ll tell you is you can start an LLC and if you need, if your investors say you need it, if you grow to a point where it’s worthwhile, you can always with a couple of 100 dollars create a sale contract and sell it to a C corp that will do what you need it to do.

Mark:
But I probably would just do an LLC.

Charlo:
Okay. And now, can we talk about some mistakes that you see a lot of startups make, and how we can avoid those in our businesses?

Mark:
I’ll be really honest, I hate to say it, the biggest mistake people make is to start a business sole proprietorship. You get very little benefit. You’re still going to have to report it on your taxes. You’re still going to have to do the bookwork, and a lot more liability. That to me is my primary mistake.

Mark:
The secondary mistake that I see a lot of is going into business with each other and just thinking it will all be okay. Now, assuming that you’re buying inventory and you’re signing for this personally, you all need to figure out in advance who’s paying what wen if it doesn’t sell. Because like I said, lawyers tend to take a dim view of everything. And frankly, whether you succeed or fail, there are problems that can happen because at the same time, the flip side to that is you buy a lot of inventory and you do very well.

Mark:
And then what happens is well, I’ll give you an example: You do very well because one of the LLC members is intimately connected with a few salons that use this product. Now, their attitude is we made 90% of the sales. We deserve 90% of the profits. Your attitude is we’re all in this together, we’re splitting it by however many people.

Charlo:
Right.

Mark:
Now, what happens when you’re making money is that devolves into a screaming match, people shout at each other, there are huge problems and oftentimes it skills the business.

Mark:
If we talk about it in advance, everyone’s happy because we already agreed on it. And that to be is the single biggest problem is that people think we’ll figure it out later. And I will tell you, if you can’t agree when there’s no money on the table, you certainly aren’t going to agree when there’s 10s and 20s and 1000s of thousands of dollars on the table.

Charlo:
That’s a great point.

Mark:
Yeah, I will say the other thing that I would tell you is that you should not go into business with anyone who you would not share at least two meals a week with. You will share at least two meals a week with them, and if you can’t stand them, it’s not going to get any better either when you’re making money and having to divvy it up or when you’re losing money and having to figure out what to do. I mean, that’s, the single biggest problem with all businesses are partners who jump into bed together because they all like the idea, but don’t like each other.

Charlo:
So, what typically happens is it a dissolution, that’s when the lawyers definitely have to get called in to figure everything out?

Mark:
So here’s, I mean there are two things that happen when things go wrong. So, the first is really simple which is that the business fails. And most people, I mean most businesses and I say this as a small business owner myself, most people are not in a position where we can spend a lot of money litigating. Most of the time there’s a lot of screaming, a lot of incrimination. People go their own ways. And what was once something very valuable turns out to be something not very valuable because we spend our time yelling at each other as opposed to selling the product.

Mark:
Hence, sort of there isn’t a solution or there is money to dissolve. Yes, you absolutely need a lawyer at that point because you’re going to be whacking up both what you have and what you owe. And the other thing you have to deal with a lot in any sort of partnership situation is something called fiduciary duties. Now that’s a fancy term for, not to be un family friendly, but not, well I will be, not [inaudible 00:16:01] with each other. Okay? A good example of fiduciary duties is let’s assume that you and I have this hair extension business. And then I find a client who I really like. I should co-opt that client and go work for them or co-opt those opportunities because I’m a fiduciary and I’m supposed to be honest when I deal with you.

Charlo:
Right.

Mark:
Okay? So, I shouldn’t be invested in another company. I shouldn’t be Mark and Sharlo’s Hair Extensions and Mark and Tamara’s Hair Extensions. Like I shouldn’t be involved in all of that. There should only be more and one other person or this one entity. You can waive those, and then sometimes you will [inaudible 00:16:42] for investors. But, you want to have a strong sense of what those are so that you don’t run afoul of it and no one else runs afoul of it.

Charlo:
Okay. And those are, that’s specifically for people in partnerships?

Mark:
Yeah. I mean the thing is is that, and again I say this really honestly, if you’re a single member LLC and it’s just you who owns the LLC, most of the problems that I see in my practice come from people not agreeing. And one would hope, I mean I get along relatively well with myself, so one would hope that you don’t sue yourself. But no, it’s really all about getting the agreements hashed out in advance.

Charlo:
Okay. Another question that was raised in our group was when should someone consider trademarking their logo or or any of their branding? When should someone consider protecting their intellectual property?

Mark:
Two statements on that: One is sooner is always better. Two, trademarks are defined through use. So, you should always register your trademark. It’s not that expensive. And I would tell you it’s worth the while. Once you start using a trademark, that also gives you the ability to say, look, this is my mark, this is synonymous for my brand, and it gives you some protection. Registration enhances that protection, and I think that’s important. I will tell you that trademark litigation, this is kind of the flip side to that, is inordinately expensive. So, for the most part trademark, and I again, no disrespect to anyone involved, there are very few trademarks in this world worth any money.

Charlo:
Right.

Mark:
And so, if you see somebody else who is using your mark, in some ways we’re sending a letter, but understand that actual litigation’s very expensive. Typically kind of the impressive trademark cases and the ones where you can do well are cases where, for example, I have a Times New Roman M that I stamp on every hair extension for Mark’s Hair Extensions. If somebody else is doing that in my geographic area, I probably have a decent claim. If they’re doing it in California, I probably don’t. And so it becomes a very fact intensive inquiry.

Mark:
The biggest reason to protect your trademarks is to make sure that no one else tries to strong arm you out of it. If your trademark is registered, if you’re using it open end notoriously, then when someone else from California says, “Mark, this is our trademark,” I get to say, “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 I’ll be honest, most legal issues for small business owners defensive rather than offensive. And you want to be able to say, “N, I’m not giving up my trademark just because you think you deserve it.” So, that’s how that works.

Charlo:
Okay. So, I have been, this question was raised, and my advice to the person that asked it was like you were saying, most trademarks aren’t technically worth much. 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 a single package, or proven that their business has any legs or will grow. So I-

Mark:
I couldn’t agree with you more.

Charlo:
Okay.

Mark:
And I think that that’s the biggest thing in dealing with legal advice is that as a lawyer, I can seel you, and I don’t mean this in a con artist way, but I can sell you everything you would ever need. The one thing I will say about entrepreneurs however is your budget is limited, and you don’t probably need everything I have to sell. So, once you know you’re really getting traction with your product and let’s be real, your product in the beginning is going to sell because it’s a quality product. You can worry about trademarking it then.

Charlo:
And you’re also saying once you actually start using it, whether it’s registered or not, that provides you some level of protection?

Mark:
That’s correct.

Charlo:
Mm. And so they were to see someone else using their mark, I guess that’s when they also get in touch with an attorney and get on the defensive to protect what’s theirs.

Mark:
That is. Now to be clear, and this is just in fairness, if you see somebody else using what looks like your trademark that doesn’t end the inquiry. Now, if I have a trademark, my capital M for my hair extensions and I go to the grocery store and I see my local butcher is using it on their meat, there’s not goin to be a lot of fight back and forth because the response from the butcher is going to be, “I’m not taking any of your clients. Fair?”

Mark:
So, you’re looking, in a trademark dispute, it’s going to require a similar mark in a similar line of work. Now as you configure and in the bigger companies, what is Google’s line of work is an interesting question. What is my line of work? Far less interesting question. I mean, if that makes any sense. I’m a law firm in Delaware.

Charlo:
It does. That definitely make sense. I think it’s like a class of goods or you have to specifically register the mark in each class of goods you’d like it protected. So, if it’s in hair extensions, if you also wanted to protect it in t-shirts, then that’s a whole nother thing to add to that list if I’m [inaudible 00:22:38].

Mark:
Right, you have to use it in t-shirts as well. And that’s my point is just there are some trademarks that kind of span a good deal of distance. And so, it makes sense to register across a lot of places. It makes sense to do a lot of protective work. Most trademarks, you don’t really have to wonder what your class of business is. Does that make any sense?

Charlo:
Yeah, that definitely makes sense. And then to how people should pay themselves or manage the money going into and out of their businesses. What is your, well it’s not direct legal advice, but what would you say about that?

Mark:
No, I understand. Yeah. So, here’s what I’ll tell you is to the extent you have employees and you want to pay yourself your payroll, there are quite a few of my clients who do it. I don’t think that’s, I’m not a fan. Because you still have self-employment tax, you still have issues and everything else. My initial statement to you is get a good accountant. That’s always the best as far as paying yourself. But as far as a sole proprietorship or an LLC, again, assuming your partnership, your LLC agreement provides for it, you’ll take a draw. Now, if you and I form an LLC agreement that says nobody gets to take money out except on Christmas, don’t take money out except on Christmas.

Mark:
But you’ll take it out in accordance with the LLC agreement and pay estimated taxes at that time. Th IRS has forms for estimated taxes. I think they’re a 1040E, but don’t quote me on that. That’s probably wrong. But you’ll pay estimated taxes based on the amount of money you take out.

Mark:
Now, I will tell you, I understand. I really do understand that when you’re trying to support yourself, and when I say [inaudible 00:24:34] I get it. You’re taking out, you got to buy dinner, so you’re taking out a lot of draws and doing whatever. I will tell you that as far as saving money, the best thing to do is take as few draws as possible because then you can kind of check with your accountant once and be done. As far as it goes, you may want to consider whether or not you want to take some of it as, you can elect for corporate treatment, take some of it as dividends. A lot of this depends on how much you’re making. And honestly, is probably really dependent on you and your accountant.

Mark:
The other reason I hesitate to say it is depending on where you live, if you have a state sales tax versus a state income tax or both if you’re in some states, but that’s also going to impact how you want to do this, because in a low income tax state you’re less concerned about it. In a high income tax state you’re more concerned about it.

Charlo:
And my understanding is that if you co-mingle your funds, even if you do register as an LLC, that opens you up to liability if anything should happen.

Mark:
Well, so co-mingling funds is an interesting, and I say this only because yes, that’s absolutely true. Now, what I’ll tell you is co-mingling funds and using money are kind of two different things. Co-mingling funds means I pay, I had my laundry done last week, so I paid it out of the LLC. Don’t do that. By the same token, if, and I’ve seen it done where the LLC has a bank account in your name, don’t do that. That’s a problem. But if you’re just taking draws out periodically and investing in the business, that is not a problem.

Mark:
So, what you want to do is make it look like a business, meaning, GE doesn’t deposit its money in Joe Schmo’s bank account. GE doesn’t buy its CEO socks. Just ask yourself if it’s an expense that GE would have, and if it’s not, then put the money in your bank account and buy it then.

Charlo:
And that would mean taking a draw from your business account.

Mark:
Right.

Charlo:
And then putting that money in your bank account. Like it’s two separate, like it’s someone else’s business.

Mark:
Right. Right. And that’s exactly right. There should be the paper trail. And it’s painful, but it’s not terribly painful, is it should go from your business to your personal account to the dry cleaner. Don’t skip that intermediate step.

Charlo:
And what does happen if you do decide to pay for your dry cleaning and your nails and all of that stuff using your company account? What does that open you up to?

Mark:
Most of the time people are drug out and shot. I’m kidding. I’m kidding. But no, what it opens you up to is for someone to say this isn’t a real business. Now, there are two reasons why that’s important” One is for liabilities. So, if I sue you I can say, “Well, it’s not a real business, it’s just your piggy bank anyway.” And that’s unattractive and it ruins your, why did you start this business if you’re just going to run it like a sole proprietorship?

Mark:
The other obviously is taxes. It’s now we’re trying to figure out how much of this was really a drawn and how much of it wasn’t? How much of it was legitimate business expenses and how much of it wasn’t? I will tell you, and again, this is all a cost benefit analysis from my perspective. And it’s one where to maintain a decent set of books and records is not costly. And it’s certainly not costly as far as, as opposed to taking the money and spending it directly on dry cleaning, taking it and putting it directly on your account and spending it on dry cleaning. It’s probably five minutes of difference of your time. And to open yourself up to the liability, why bother when you can literally do it in five minutes?

Charlo:
No, that makes sense. So, all of you guys listening, if you’re taking money out of your PayPal accounts, if you’re taking money out of your business accounts and using it on personal expenses, it your company were to get sued, if one of these customers that does these chargebacks or anything like that happens, your business is no longer as protected as it would be, because you’ve muddied the lines between what is person and what is business.

Mark:
Right. You should think of it, and you should actually think of a business as just another person. Now, when I go to the dry cleaner I pay for my own dry cleaning. I would never ask the person [inaudible 00:29:19] behind me to do it. So, he may owe me money, and if he owes me the money I’ll ask for the money and I’ll pay for my dry cleaning. But I certainly, you just got to keep those clean lines of demarkation.

Charlo:
Okay. And now here is a question from one of our group members. Mahogany says, if I buy an existing business, is there a way I can keep the same business name of company credit, but operate the business under a different name?

Mark:
Sure. So there’s two, when it comes to buying existing businesses, there’s really two ways to do it. There’s a third way that is totally relevant as far as doing it through asset sales. But you can either buy the assets of the business or you can buy the equity in the business. Now, I’ll give you an example: If you buy the assets of the business, the business has 100 hair extensions, they have a customer list, they have a logo, you can buy all of that. All right? Now the thing about buying it, buying the assets are that typically the credit doesn’t go with it because you’re buying the assets, but not the business.

Mark:
The benefit of that is if the old business owes somebody money or somebody’s going to sue it or something bad happened, you’re not liable. You just bought the assets and moved on. Now there are some, especially in the [inaudible 00:30:42] that say if you operate under the same name, you deal with liability. And that’s something you may want to check out locally.

Mark:
The flip side to that however is if you’re buying the equity in a business, you are buying the whole business, including its credit, including everything else. And that may be attractive for that reason. Now, as far as changing the name of the business, you have two options. You can either file an amended article of incorporation or certificate of formation or, depending on what the business is, the name of the form will change. Or what’s oftentimes simpler is just to file a different doing business certification saying this business, Rainbow Hair is now doing business as Joe’s Hair. And that’s it. And it’s a very simple process and you can do that as well. Many, many businesses operate under a number of brand names, and you should consider that as well.

Charlo:
Okay. Now another question from one of our group members, Teela asks so what if you use profits for marketing? Like using profits to get your own hair done for a photo shoot? Do you just keep the receipts or is that more of, I mean, is this a question for you or a tax person?

Mark:
It may be for a tax person. Let me, I’ll give you kind of a general view on it, which is, this would be a really easy question if it was can I use it to market my, running a radio ad? Yes. The answer is go for it. That’s a deductible expense. You have nothing to worry about and it’s a radio ad. Good for you.

Mark:
When it comes to getting your own hair done in order to show it off, you’re going to want to check probably with your accountant on that, depending on how they treat that. A lot of it’s going to depend on exactly how that works and how you’re showing it off, and some other vagueries of it. I will tell you that my own personal view is that to the extent benefits you. That makes then harder to deduct. I mean obviously everything benefits you, but if you’re saying, “I got my hair and nails done because me feeling good makes the company run better,” at some point it becomes too intenuated. If it’s I spend $100.00 on a radio ad, that makes sense to everyone. And there’s going to be a gulf between those two.

Charlo:
So, I guess it’s a case-by-case basis and something you should talk about with your tax person.

Mark:
That’s exactly right.

Charlo:
Okay. That was a great question. Is there anything that I’m not asking that you think is important for us to share with this group as we’re in just like a started general legal-ish conversation about business?

Mark:
No. I’ll say something that’s probably counterintuitive, but I wouldn’t get too hung up on it on the legal side of it as far as how to create or structure the business. I mean, if it were me and I were in your shoes, I would, everyone I’m talking to roughly, I would say create an LLC, you create an agreement with all the people in the LLC, and move on with life. Your biggest issue is going to be your local regulations. With respect to sales and with respect to sales tax and everything else, those are what can really trip you up because the penalties for not paying the taxes are heavy and the licenses are often relatively onerous. I can’t really tell you much more than that, because these tend to be very local rules.

Mark:
But you want to call down, I mean I would probably call the town I lived in and say, “Here’s what I’m doing. What licenses do I need?” They may or may not help you, but they’ll probably give you a good start.

Charlo:
So, it’s not enough to form an LLC and get your EIN number. You also need to make sure that you’re checking with your local, not just your state, but like your local city also to see what else needs to be filed. I know in California, there are of course thousands of cities, and things change like in a major way from city to city to county to area. So, I know that just inside of my state, I would still have to go and check super locally to make sure that I’m dotting all of my Is and crossing all of my Ts.

Mark:
That’s exactly right, and then the thing about it is that unfortunately, and just being honest, state regulations oftentimes tend to really mirror each other. I mean I can, knowing nothing about California, I can make a decent guess as to what your regulations are because they tend to be fairly mirror image. Local regulations do not share that attribute.

Charlo:
Right.

Mark:
So, it’s really important to check with your local people. The other thing is the fines tend to be expensive. And that’s not to scare anyone, but just if you start making a profit, you don’t want to spend your first profit paying off the city of wherever because you did something without a license.

Charlo:
So, I do know that like I was raised in Alaska and spent a lot of time up there, I know that there is a certain law in the state that says up until your I guess, they kind of designate it a hobby up until it reaches like 700 or so dollars. That’s when you’re required to register for a business license is if it makes more than a certain dollar amount. But I know that’s different in a lot of places. Your advice is to go ahead and get that business license sooner than later?

Mark:
Well, my advice is to go ahead and check because I think you have an excellent statement. And that’s true, different places do it differently. And there’s no reason to pay the money if you don’t have to. At the same time, there’s no reason not to pay the money if you’re going to have to. So, what I would tall you is it’s a really, and again, I’ll be honest. Most city halls are actually really helpful because they don’t want to see you fail. And so, you call and you say, “I want to make sure I’m compliant.” I have not had a lot of problems with clients with that. Normally the city halls are very, very helpful.

Charlo:
Cool. I don’t want to take up too much of your time. I don’t see any questions that we haven’t already answered during this discussion coming up. Are there any parting words that you want to leave us with? I can’t tell you how much I appreciate the fact that you are being really realistic about the need for like legal assistance at this point, and the fact that you stated at the end of the day, you could sell us a million different things right now because they’re available. But do we actually need them? Not necessarily.

Charlo:
So, I appreciate the fact that you really boiled it down to making sure that you have an LLC in most cases, that are you totally compliant with your local and state laws, and that you are not mixing your personal funds with the business’.

Mark:
Thank you. Yes. And if you do those three things, you’re probably well on your way to being okay. The only last piece of parting advice I would give you, and maybe this is just the lazy person in me, but if you hire employees, hiring a payroll company is the cheapest money you will ever spend, because payroll is remarkably confusing. The fines are very high, and they do it very well. So that’s my, as you grow and you’re going to spend more money rather than hiring a lawyer to figure out how to handle payroll, hire paychecks for ADP and have them do your payroll.

Charlo:
Nice. Helping to save them coins, sis. Thank you so much for your time today, Mark.

Mark:
No problem. Take care. I hope you guys do really well. And if you have any questions, you know where to find me.

Charlo:
I definitely do and I’ll definitely be in touch. This was so, we’re getting tons of really positive feedback right now on the live chat. So, everyone is really appreciative. Thank you, thank you, thank you. And I’ll definitely be in touch.

Mark:
Okay. Thank you so much. Take care.

Charlo:
All right. Bye.

Charlo:
We did it. We did it. I’ve been up since two o’clock this morning. I haven’t eaten yet. I have been busy. So, the fact that we made it onto the live on time when you all know when it comes to time, mm-hmm (affirmative), turn on your post notifications because you’ll catch me when you catch me.

Charlo:
Thank you guys so much for making time for this conversation. Thank you for chiming into this conversation. I hope the quality of the livestream was what it should be. We’re doing the horizontal video today and the separate microphone, so it should be decent quality. But yeah, thank you guys so much for tuning in. Yes, should we do LLC, trademark and copyright, all of that stuff we definitely covered earlier in the livestream? I’m going to go ahead and end this, upload the stream to this group and pin it as an announcement, just so nobody misses any part of the conversation.

Charlo:
But for the most part, I think we, that was good, wasn’t it? Saved you guys hundreds of dollars on your own legal consultations. So again, as the attorney said and as I have to legally state, this isn’t direct advice that you need to follow, this is me having a conversation with a licensed attorney. Again, if you run the video back, he goes over where he went to school, how long he’s been practicing, the fact that he’s been doing this for the last 15 years, specifically with startups. So, you’ll see all of his credentials which I think also add weight to this conversation.

Charlo:
But that felt really good. We got to do something like this again really, really soon. I love the fact that I’m not the person that’s just doling out the information. So, maybe we should decide as a group which professional I should have on next. I don’t mind footing the bill for an hour consultation with maybe a tax attorney. Tax season is literally, its’ tax season is right around the corner. I got to send an email about that, because Chinese New Year is also coming up, and all of our hair as you know is sourced from China. Like the majority of our hair is sourced from China. So, during Chinese New Year’s, they don’t fly. So, it’s not an option for me to be like, “Hey, stop being lazy.” Like no planes come or go from February second, I think until the ninth. It’s a whole week when literally the country shut down, so, of course that’s going to affect us.

Charlo:
Like I said, I’ve been up since two o’clock this morning packing orders and responding to customer service calls. We’re super, super busy so even if we put every dollar that we have into stocking up inventory, I know that we will run out within 24 to 48 hours. And then it’s the dead period of Chinese New Year.

Charlo:
So, still figuring out how we’re going to wok things out. We intentionally made sure we didn’t do the official company launch until after Chinese New Year. So, you can expect hat in late February, early March. But I’m really grateful that you guys took out the time to be a part of this conversation. Thank you so much for being a part of the group. I am beyond thrilled at the rate we, because it’s not my group, it’s, if it was just me, it’d be me and a group hanging out with myself. It is our community. It is our platform. I’m just a person that’s helping to put it all together. But at the end of the day, thank you guys for being actively involved and engaged in the group.

Charlo:
I see that you guys are stepping up to answer each other’s questions with the post that we’re putting out in the group, and that’s exactly what I want. I don’t have all the answers. Got a bunch, but I don’t have them all. So, the fact that so many of you are stepping in to make sure that this group is worth it for everyone, I a so grateful.

Charlo:
But yeah, I think that’s pretty much it. Osia, Jalisa, Brittany, Taya, Mahogany, I hope you guys are having a great Tuesday. I actually, with information about our company that we write about our return policy before we put our website, should we get a lawyer to go over it? Wish you would’ve asked that like two seconds ago. But if you guys aren’t familiar with upwork.com, I’m probably going to do a whole video/livestream about this. It is incredibly useful when it comes to outsourcing, when it comes to growing your company. But that’s actually where this attorney was sourced. And he was great. And he actually, other people were like, “Well, I need this much,” and “I need this much.” And he as like, “I just love doing podcasts and stuff. I love just having conversations. So, when ever you need me, let’s go live.”

Charlo:
So, if you guys want to have another conversation with him, we can do that. But for right now, I think we’re good. I actually have to go live and do Rise and Grind, because I didn’t do it this morning. So, if you guys want to tune in, go ahead and do that.

Charlo:
But this will be uploaded to YouTube. I’ve actually been recording it on my separate DSLR camera. So, the quality should be not splotchy like a livestream. And hopefully the audio is really, really good. But you know how that goes.

Charlo:
So, I’ll see you guys in a little. Love you!