DBA or LLC?...That is the question!

[dpwurz]

Dear All,
My name is Daniel and i am 21 years of age and i work at a bank as a personal banker at the moment. But i do a lot of things for income on the side such as... Supply and Demand Selling tactical gear, weapons accessories, knives, clothing pretty much anything i can buy low and sell somewhat higher and make a profit. I also sell term and whole life insurance. MY question is..I do all this business under my own name/entity and i am thinking about putting all of it under an actual business. So from what i understand i can establish a DBA/Sole proprietorship OR an LLC. From what i understand it will actually save me a lot of money on multiple things and allow me to build business credit and also allow me to open a business account.

Is this even a good idea?

What will be the difference between the LLC and the DBA?

Should i just stick to doing it as a hobby and not make it professional?

Any help is much appreciated. Thank you in advance.

PS- Also, i looked all over the forums and could not find a post mentioning this.

[TelecommutingMom]

An LLC is going to be more of a hassle to set up but the main difference between the two are that if you are a sole proprietor then your own personal assets can be in danger for any debt your business goes in to. You are personally liable for the business. With an LLC there is a separation between you and the business and you have your personal assets are protected. There are tax benefits as well. Really the only benefits to a SP is that it is easier to set up and easier to file your taxes.

[Milkerz]

Don't rush in to any major decisions - make the step up from say doing it 3-4 hours a week and move up to 6 hours a week (or whatever time period is appropriate for you). If this step up has worked well, move up again by another few hours. If it goes even better - then it may be time to consider your position at the bank.

Luke

[dpwurz]

Thank you so much for the quick responses very helpful. What do you mean reconsider my position at the bank?. I would like to continue working at the bank but i still like running my business on the side. So now i have some different questions haha. Is the workload of a business too much when you start growing to have a full time job?. Has it affected you personally if you do not mind me asking?. I am aiming to become a stock broker with a big bank in the US. But i want to have an LLC on the side. Am i being rational?. What are a few key things that would determine if i do too much or too little business on the side. The only thing i am worried about is time management. I usually set two appointments for some kind of business on the side every other day after 4pm-6pm when i get off work at the bank. Also, Do you know of any threads discussing how to build business credit?.

Also Mikers i started following your blog. Very interesting. Keep up the good work. Also thank you telecommuting mom. You have both been very helpful.

[Milkerz]

Ah well if you have dreams of workin in the bank then you should probably keep the business to a hobby, afterall that takes years of dedication. Personally, i was working 24 hours a week and have cut that down to 8 hours so I can cope with a 40+ hour business week.

Thanks for the follow on my blog, I post on twitter a lot more frequently though.
Luke

[PapaSpot]

First of all, I highly recommend an LLC because of the protection and tax benefits, and you can set one up in about 5 minutes online. I've done this several times and I don't know what hassles others are referring to. Also if you are concerned about not having your business interfere with your full-time job, then I recommend pursuing something that does not require such a commitment, and does not interfere with the job. Have you considered becoming an affiliate marketer? I can tell you of two or three really good ones out there that pay pretty good, and all you have to do is tell others about it.

[dpwurz]

Well, I actually have a good amount of free time outside of the bank. Mikers statements are the ones that made me question it a bit is all. Affiliate Marketer?. What is that and what does it involve?

[Dave Ingram]

Hi Luke,

One thing I'd like to add is that the side business you are talking about sounds like it can definitely benefit from the liability protection of an LLC. Selling weapons, essentially in the black market, can be extremely dangerous from a legal liability standpoint. Even legitimate businesses can face serious legal consequences if they haphazardly sell a weapon to someone who uses it to commit a crime. Because of this, you will likely need to call your Secretary of State and local County Clerk's offices to find out what kind of licensing is required in your state to sell weapons.

As far as you're long-term goal of becoming a stockbroker with a major bank, that is a commendable goal, but it is quickly becoming obsolete. Electronic stock trading is becoming so popular that traditional stockbrokers are finding themselves with less and less to do. Consider aiming to become a financial advisor, mutual fund manager or independent stock trader to take advantage of current and future trends.

As far as the time issue is concerned, consider this: Would you rather spend 50 hours per week crunching numbers at a bank or doing the things that you are truly passionate about? For most entrepreneurs, being forced to quit your day job is the ultimate goal of starting a business. But, as others have said, if banking is your true passion, try to keep the business to a hobby (but i totally recommend stopping the black-market weapons sales in favor of legitimate, licensed sales!)

I hope that helps!

________________________________
Dave Ingram

[PapaSpot]

Affiliate marketing is basically becoming a commission only sales person for the companies/products/services you want to promote or sell. It's a lot like running a business, only without the inventory, overhead and other headaches involved in actually running a business. For example, if you enjoy selling holsters, tactical gear, or whatever, you can either buy it at wholesale, pay the shipping costs, stock it, inventory it, advertise it, pack and ship it to your buyers, then have to deal with returns, warranties, etc. Or you can just represent that company, or just specific products, sell it at a markup, then send the orders to the manufacturer or supplier to ship. Essentially, you are acting as a sales person and not charging them a dime. You make money on the markup only. No more shipping costs, etc. Some companies make it even easier. You simply promote their product or service, and the sales and everything else go directly to them, you don't deal with any of it, and they pay you for every sale you send them.

Speaking of which, our company is about to launch an affiliate program that pays $50 per sale, and $25 for every renewal. You sell it once and get paid every time they renew.

Dave, I think he only sells the gear, not the weapons themselves.

[dpwurz]

Whoa! !! When I said tactical gear I mean like hunting knives, mace, police batons, mre's, obsolete non lethal non weaponry military gear. Stuff like that nothing like firearms or ammunitions or anything haha. I appreciate the concern though. I have already checked with local laws and the secretary it is fine for me to sell the merchandise I aquire. Also, about me wanting to become a stock broker...I currently possess my health and life license, property and casualty license, series 6 securities license. I work as a personal banker. I was thinking of selling the rest of my merchandise I have and just focus on being a financial advisor and sell insurance and financial products along wit the duties of being CFP. I honestly and not really big into supply and demand really it was just because I am in the army and I always heard these other soldiers say they wanted this or that and did not know where to buy it so I saw opportunity. But honestly I would just like to be a financial planner and possibly take on one or two sub producers to hustle insurance for me in the late future when I bring in some more revenue.