Do I need an LLC before my first paying client, or am I overthinking this?

Nina Park· Lash and brow studio idea; renting a chair at someone else's salon for now· Idea stage, Beauty & Personal Care·5d

Basic question, and I've been too embarrassed to ask it anywhere that isn't semi-anonymous.

I do lashes and brows. Right now I rent a chair at someone else's salon two days a week and I have maybe nine regulars who pay me directly, mostly by Venmo, which I suspect is its own problem. Eventually I want my own small studio.

Everything I read says form an LLC like it's step one, and then the next thing I read says sole proprietor is fine to start and an LLC is mostly about liability. I can't tell which of those is talking about someone like me.

What I'm actually worried about, in order:

Someone reacting badly to an adhesive and coming after my personal savings
Whether I'm doing something wrong by taking payments as just me
Spending $500 on setup for something I don't need yet

The chair rental agreement I signed says I'm an independent contractor, if that changes the answer. What did people at this exact stage actually do, and what do you wish you'd done sooner?

3 replies

Cheryl Dunn· Open·4d

I'm a CPA, not your CPA, and this is general, but your first two worries have different answers and it's worth separating them.

The liability worry is an entity question and an insurance question, and honestly the insurance half does more of the work than people expect. Professional liability cover for lash and brow services exists and isn't expensive relative to the thing you're afraid of. An entity with no insurance behind it is a thinner shield than people assume.

The payments worry is simpler: you're already in business. Income is income whether it arrives by app or by cheque, and the app may well issue you a form at year end. Clean up the personal-versus-business payment split this month whichever entity you land on. That part isn't optional and it costs nothing.

Keisha Brown· Registered·4d

Different view from three feet further down the road. I did exactly your setup, chair rental first, then my own four chairs, lease signed, build-out happening right now, and I'd form the entity before you're choosing between a salon suite and a storefront, not after.

Two practical reasons, neither of them legal advice. My landlord wouldn't discuss numbers with a person, only with an entity. And the beauty supply distributor's wholesale account needed the EIN. Both of those mattered sooner than I expected.

My filing was $100 plus about $50 a year to stay in good standing. It was nowhere near the $500 I'd braced for. Check your own state before you price the fear.

Nina Park· Idea stage·3d

Both of these are more useful than the forty articles I read. I had genuinely never thought about the wholesale account. I buy retail right now and I've been treating that as normal.

Getting an insurance quote this week first, because the point about the shield landed hardest. Then filing, since the $500 in my head appears to be invented. Thank you both.

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