Should You Register Your Business or Start an LLC (And When)?

Aug 08, 2025

Howdy chump,

This one gets asked so often I should just tattoo the answer on my forehead.
“S, should I register my business right away? Should I get an LLC?”

Short answer? No.

Longer answer? HELL no… at least not until you’ve earned the right to.

We’ve already talked about how to pick a winning product and get a quality supplier, now let’s talk about when it’s actually worth going “official.”

If your store’s still making less profit than your neighborhood kid’s lemonade stand, the only LLC you need is Lots of Legit Customers.

It’s Too Early

I know the fantasy.

You want the shiny official papers, the fancy business name, maybe even a little title on LinkedIn that says “CEO” so you can flex to Stacey when she looks at your page.

Don’t worry bro, she’s never gonna look.

Let her go.

Anyway… here’s the brutal truth: if you haven’t passed 50 sales, your company is as real as your childhood friend’s girlfriend who “goes to another school.”

Spending $300–$500 (or more) on LLC filings, state fees, and some half-baked logo before you’ve validated your product is the fastest way to burn your seed money.

It’s empty dopamine to feel like you’re making progress or doing something big without actually taking meaningful action or getting results.

This is not Shark Tank. Nobody’s impressed.

Also you spent way too long making that logo bro, and for that reason, I’m out.

When You Actually Need an LLC

There’s exactly three scenarios where you should pull the trigger:

You’re making enough money that a lawsuit could actually hurt.
If Karen from Kentucky decides to sue you because her dog choked on your “indestructible” chew toy, the LLC makes sure she can’t also take your PlayStation and your grandma’s house.
You’re running consistent paid traffic and collecting real customer data.
The more eyeballs and transactions, the higher the odds some nutjob tries to cause trouble. LLC gives you a layer of “screw you” between them and your personal bank account. To be honest, in the vast majority of cases, just offering a refund is enough to get them off your back.
You need wholesale accounts or business bank credit.
Some suppliers and banks won’t touch you unless you’re legit on paper. Again, not really an issue if you’re just starting out, but fine, in that case make it official.

The Real “First Step” Nobody Talks About

You don’t need an LLC to sell your first product.

What you do need is:

A product worth selling.
A supplier who won’t disappear mid-shipment.
A store that doesn’t look like it was designed by a blind raccoon or scammer

All of that can be done as a sole prop (fancy term for “you, the individual”) without some state registration fee sucking your wallet dry.

And yes, you’ll pay taxes on that income, but guess what? You’d pay taxes with an LLC too. And when you’re ready, registering your business is still quick.

Trust me, the government will be more than happy to take your filing fee later.

The Hidden Cost Nobody Mentions

That LLC? It’s not a one-and-done.
You’ve now signed up for:

Annual fees (hello, $150/year for the privilege of existing)
More complicated tax filings
Ongoing compliance crap that will bore you into a coma

It’s like getting a pet tiger. Yeah it’s cool at first. You’ll tell your friends about what you’re going to do and you feel like the man.

Then you realize you have to feed it forever or it’ll eat you alive.

It suddenly sounds a lot less cool.

My Rule of Thumb

$0–$1k/month revenue: Forget the LLC. You’re not ready.
$1k–$5k/month and growing: Start thinking about it, especially if you’re scaling ads.
$5k+/month consistently: Form it yesterday.

Until then, focus on making sales. Paperwork doesn’t pay rent.

Stop asking if you “need” an LLC.

Go make $1 in profit first.

Then you can come back, and we’ll talk about liability, taxes, and how to not get financially curb-stomped in court.

But until you’ve proven this business actually works?
You don’t have a business.
You have an expensive hobby and a piece of paper to show for it.

Now get back to work. See you at the top.

– S