Internet Business Mastery: Business Development and Internet Marketing for the Web 2.0 Age

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Sterling: This is Internet Business Mastery, Episode 72.

In a world where bosses control your life, and thoughts of escape fill your mind, where inspiration seems dead and cynicism rules the masses. You have a desire to break free, you feel the need to take control. Now – there exists a place where the secrets of freedom and wealth are given to those who believe. Internet Business Mastery.com – free your mind!

Sterling: Hello, and welcome to Internet Business Mastery online at InternetBusinessMastery.com. I’m Sterling….

Jay: And I’m Jay…

Sterling: And we’re here to help you escape the ‘9 to 5,’ and live the lifestyle of your dreams by turning your life’s passion into a profitable internet business, even if you’re just getting started today.

Now in this episode of Internet Business Mastery, we have Part 2 of a flashback episode series called Protecting Your Assets, Build Your Wealth, and Save Taxes With an LLC. And we also have a resource where you can get everything you need to start your own wealth-building LLC and save hundreds of dollars in lawyer fees.

And we’d like to remind you that if you’d like to get a jumpstart on creating your own profitable internet business using our proven system, you can claim your risk-free trial membership to the Internet Business Mastery Academy by going to FreeAudioGift.com.

So Jay, it’s been a while, what’s going on?

Jay: Well, we’ve been busy for a couple weeks doing all those phone calls with our platinum members and that’s certainly been a lot of fun getting on the phone. With every one of them we’ve had about an hour long conversation with, and I always enjoy it when we get to do the one-on-one with people, because there’s always good insights. You get a feel for where people are at and the problems our communities are running into.

And the thing that we spent a lot of time with most of them talking about was choosing their niche, and that’s definitely an important part of this whole process, so it was worth spending the time on. But something that came up in those conversations and then just also in a few emails and people asking questions about the Academy and stuff, it’s interesting as we realize that a lot of people are getting hung up on the whole choosing your niche idea.

And what’s my internet business going to be about, and I think a lot of people aren’t realizing for instance that some people are saying, “Well I didn’t join the Academy because I didn’t know what my niche was going to be yet.” And I guess this must be a feeling on our part of really communicating well what’s inside the Academy, and something we need to address with our marketing and things, but you don’t need to have a niche before you join the Academy.

In fact, we have a whole course inside the Academy that walks you through a checklist and all these different ideas. In fact we recently redid that checklist.

Sterling: Yeah, that was the thing that was really useful too by talking to the platinum people was, to go through that checklist of everything you need to find out to find your ideal niche. We were able to fix up that worksheet because as we’re talking to people we’re adding all this information for them going; oh we need to make sure little bit of this information is in this checklist. So we redid it, and added it back into the Academy with all the updates.

Jay: So I guess it just made it…I just wanted to bring that up, that people don’t have to have a niche before they join the Academy, that that’s a process that we walk you through. And the other interesting thing is…and I’m sure you’ve noticed this, that a lot of people, they already have…I’d say a good 80% of the people who’ve joined the platinum group, the first thing we have them do is go through the niche worksheet.

It’s the same one that you get inside the Academy, and then we got on the phone with them and talked about the list of ideas – the two or three ideas that they had that they were the most interested in. And yeah, it can seem like a daunting task to finally narrow it down and go okay, this is the one that I’m going to focus on.

But a lot of the people, they always seemed very uncertain when they got on the phone with us, but by the time we were done with the call, we’re like look, you have awesome ideas here, you already knew what your niche was. And maybe we offered a few insights and clarified a few things, but I think a lot more people have good ideas for niches for internet businesses, and they just don’t realize it. I guess it’s just that inner confidence thing, and maybe it helps to have us get on the phone and say yeah, we like it too and have a second or third opinion. Like yeah, that’s a great idea.

But I guess the main thing was just to tell people look, there’s an excellent chance that you already have multiple awesome niche ideas within you and that by going to that niche worksheet, the best one is going to float to the top in your evaluation and that you’ll have something to just dive into and go for. So I just don’t want that to hold people back, because it is an important part of the process but it doesn’t need to be quite so daunting as it seems to be for people.

Sterling: Well, and to know that with the Academy, the thing we wanted to create was something completely step-by-step, meaning you think to yourself, “You know what would be cool? Having an internet business and being able to create a lifestyle.” And from that second further, there was some sort of resource that you could go through to actually make that happen from that moment on, because course 1 deals with all the mindset stuff, and then course 2 gets right into let’s find the right niche and a profitable niche for you.

So definitely, that was our goal was to make it as step-by-step as possible. So there’s outside of your own desire to want one, that’s all you need to come at it with. Yeah, it was really awesome talking to people about their niches like you say, and just again, it’s such a funny thing that a lot of times some people just need to hear somebody else say, “Oh my gosh, that’s a great one!”

There was even one person that was like, “Wow, I really like this next niche, but I was probably going to dump it because I just don’t know,” and they say it and we’re both like, “That’s an amazing niche!” And then she’s like, “Oh! Oh good, that’s the one I liked!” It’s just like well, there’s obviously other things to look at – numbers, and are people looking for it, and things like that. And after looking at all that it was like, it was exciting to hear somebody go, “Oh, for months and months I’ve been dealing with what is my niche, and I really want to do this thing, but I don’t know.”

And then after we look at things, we’re like, that’s amazing. So that’s really exciting to do and definitely has been very eye opening for how we do that Academy as well.

Jay: And when it comes down to it, you just don’t have a whole lot to lose by choosing one and just going forward with it. In fact, you just have a lot to gain in terms of the confidence that comes with action, the things that you learn as you move forward. And I think we just tend to build it up so big in our mind that it seems like there’s a lot to lose. It’s like oh man if I choose the wrong one; that just means that I’m stupid, I can’t do this, and that’s it. I’m just not cut out for internet business, and that’s not the case at all.

All you have to lose is very little. It takes very little time and actually very little money to test an idea on the internet. I mean we’re talking a matter of about $10 a month, maybe $30 tops to get things up and going, and in a matter of a few months you can know if you’ve got a decent idea or not. So there’s just not a whole lot to lose, so I just don’t want people to build that up so big in their mind where it feels like oh, well the world’s going to crash down if I don’t choose the right idea the first time around.

Because the people that we know that succeed on the internet, it’s something we’ve said in the past, they go to bat multiple times and sometimes they hit something out of the park the first time, sometimes they just get a single or double, and they kind of tweak it until they do hit it out of the park. And so, that’s why we love the nature of this business, is there’s not a whole lot to lose and you get started fast, and it’s easy to tweak until you finally make it work.

So we just want to see a lot more success stories out there, and help people overcome that thing. So hopefully some of those insights will help you right there. Well another thing that people ask a lot when they’re getting started in their business about the whole LLC question, or business entity, and do I need to start one? And so that’s why we’ve got this awesome interview. This has been a…I mean we did this a couple years back, but it’s still completely relevant information and that’s why we’re bringing it back again. We already played the first part for you, so we’re going to replay the second part in today’s feature segment – this interview with Darius, who is a lawyer who helps…I mean he’s into this whole business mindset.

He does work on the internet, he does real estate stuff, and he’s also a lawyer. So he knows the kind of position we’re in as internet entrepreneurs and stuff, so I guess let’s go ahead and dive into the second part of that interview.

And now the featured segment…

Jay: So when it comes time to actually start the LLC, obviously there’s some paperwork involved, and so people are probably wondering, what kind of paperwork do I need, where do I get this paperwork to fill out? Or what’s the step when it comes to the paperwork? What do you do?

Darius: Well, most of the time it’s relatively simple, ever state has the official paperwork that you need to file to create the LLC. These are going to be called your articles of organization, or the articles. And they basically set forth the name of the company, who the members are going to be, the type of management style, and these are some of the things we cover in the materials.

But generally you can pretty much file in about an hour and a half to two hours. In fact, I just had someone call me the other day and say, “I did it in an hour and a half, it was really easy. I went through all your stuff, it really helped me tremendously, and I set it up and it was very easy.” So that’s the good news, and the nice thing about this program, is it takes you step-by-step through all that, but let me tell you, there are a tremendous amount of questions that you’re going to need to ask before you file all that.

And I think the real value of really educating yourself on these processes is going to come from that, and I’d love to talk later about some of the issues that can come up when you have other parties in your business and how you want to determine how monies will be split, and other sorts of things. And we’ll talk about that soon I think, but generally it’s a pretty simple process, it won’t take very long.

And especially because we walk you through it, it becomes really, really simple, and you can be sure that you’re doing it in the most effective manner and you’re not making any mistakes. So for example there’s certain clauses – some states have what are called Acknowledgement of Personal Liability clauses. And this is a disastrous type of thing, and I just wrote an article on this the other day – there’s a handful of states, don’t ask me why they have this clause in the articles of organization – but this clause actually allows you to check a box which acknowledges that you, the owner of the LLC will be personally liable for any debts or judgments against the LLC. Now think about that for a moment.

The whole reason you’re setting up an LLC is because you don’t want that. Well for some reason there’s about six states that have one checkmark box that if you check it, you’re in trouble. Now let me tell you….

Sterling: That is ridiculous.

Darius: It is ridiculous, but isn’t it worth knowing that your attorney, or the company that’s filed it for you did not do that? And what I tell people is, if you’ve already set up an LLC, you need to get out your copy of your articles of organization, you need to review everything against what we have in here, and be sure that that wasn’t checked because the sad reality is, that while you might be paying the attorney – and I’m not going to speak for every attorney – but for a lot of law firms, you may pay them $600 to file the paperwork for you, but the person who’s filling it out is usually not going to be the attorney.

It’s going to be a law clerk, it could be a legal secretary, and it could be a host of other parties. So you really need to watch those sorts of things. So mistakes in that initial process are very common, and so it is easy if you have the right instruction. If you don’t, then you want to get the right instruction, and if you thing you’ve had the right instruction you may learn that your instruction wasn’t as detailed or as thorough or as careful or thoughtful as you originally anticipated. In that event, get some good information and go back and double check everything.

Sterling: Now how much paperwork is involved in maintaining it? Like you just talked about starting it, but what about maintaining it each year and where do you find that paperwork?

Darius: Well generally, the paperwork to maintain it is also going to be very important. And for really most business entities, there is going to be some maintenance. I recommend first at the state level, I recommend that you are sure of all your state requirements. You would be amazed at how many companies are set up, and the owners don’t realize that there is a state tax reporting form that you have to submit, even if you don’t owe any state taxes. Every state may or may not have a state…some call it a state income tax, some call it a state franchise tax, but even the states that have a franchise tax, they’ll have a cutoff.

And at some point you may or may not make enough money to invoke that tax. And in other words, you don’t owe the tax. Well even though there are states that have that, you are responsible for submitting a form generally that will say there are no taxes due. We don’t owe any state taxes, we may owe taxes to the federal IRS guys, but we don’t owe taxes on the state level. For example, for many years – Texas just increased this amount – but for many years Texas had generally what I’ll call a tax that kicked in if you made $150,000 or more.

And so a lot of the folks I was dealing with, they had smaller businesses and that were doing pretty well, but they didn’t kick in to that $150,000 or more amount. But I would see accountants that would not advise their clients and tell them that they needed to submit what’s called a ‘no franchise tax’ form. Well as a result, the client doesn’t submit it, and guess what the state does?

The state will revoke your business entity. It’s very important to understand if you don’t comply with certain documents and paperwork, the state will pull your entity. Now you may find a great accountant that tells you everything that you need to know and keeps you up to date on all that, or you may not. I’ve seen many situations where they do not, so let me just tell you that that’s pretty important.

The other thing that’s important too from the standpoint of paperwork, some are internal meetings, some of your documents, your tax returns and general…the work and paperwork involved isn’t really that great, but if you decide to use…the tax advantages seem very beneficial to you as you can imagine the liability protection is an issue, you need to play the game right, which means you need to keep up with and you need to be aware of what some of your requirements are.

Again, we go back to the common situation, and that’s why I wrote this material and created it is because most people that go to an attorney to set it up, they get everything, they leave with a bunch of papers, and they’re not really sure what to do next. That invites disaster, because if you don’t keep the proper records, you don’t notify the state, then you’re going to have your LLC or other business entity revoked.

And that is a very disastrous situation because it’s basically as if you’re having nothing at all. And here’s another disaster, if that happens to you and you’ve been using an S-corporation or a S-sub chapter LLC and now you have the IRS asking you questions which would be the Federal IRS, federal government. If you’re no longer viewed as an LLC that’s under sub chapter S by the state, it’s possible that the IRS may also retroactively tax you in the manner that you have been operating.

So let’s say that your LLC was revoked because you didn’t file your state franchise tax reports, then the IRS may view you as no longer a sub chapter S LLC. So those types of things are pretty important, it’s debatable if the IRS would do that, but like I say, the state forms are pretty important. Now we go through all of that, we also go through as I said the records that are necessary so you can run the entity for maximum entity protection and you can back up any taxes. You can back up all your tax decisions and tax choices that you are trying to justify.

Jay: So we’ve talked a little bit about you were just mentioning taxes, so what are some of the traps that if you don’t have your business set up right or if you haven’t set up a business at all, what are some of the tax traps that you’re looking at facing?

Darius: Well instruction in this area is really important, because one mistake can cost you thousands of dollars. The first thing I think for most people is as a sole proprietor, which is the individual that goes out and says, “You know what? I’m going to start a business, I’m going to start an eBay business, I’m going to start any sort of online business or a business with a tangible storefront, you have several risks and traps.
I think the biggest tax trap that we haven’t talked about yet is the fact that IRS auditors spend more time on sole proprietor tax returns than any other tax return. When you file your taxes as a sole proprietor, you’re going to file what’s called a 1040 Schedule C. And that’s going to be active income from the business, and that’s where you’re going to list your deductions and all your different costs, and your income. There is types of returns, 1040 Schedule C is audited as much as five to ten times more than LLC partnership tax returns.

So it is a tremendous audit risk these days to set yourself up as a sole proprietor and not do anything else, just start doing business. You have a very high likelihood of being audited and it’s as much as ten times more than someone who is properly structured as an LLC taxed under the partnership style taxation. So keep that in mind, that’s one massive tax issue. The second thing like we said, one of the tax traps all the time, it’s just this overpaying of taxes. And paying the self employment tax out the nose, and not being able to control that.

That is a huge tax trap; I think those are really the primary tax traps. I mean I would say the other one is most small business owners or sole proprietors, they really don’t have a lot of advice and assistance on finding a good CPA. They may not know what questions to ask, and so they may do the taxes themselves. A good CPA will find you deductions, but you need to be able to find one.

We have a whole section on finding the right CPA for your business, how to find common deductions, how you go about selecting a CPA, questions to ask them, and things of that nature. So when you get your business entity structured every year when you pay your taxes, you can find a CPA that can not only save you taxes from the standpoint of the self-employment taxes that we talked about, but can find other deductions and tax savings that really were not present when you were operating as a sole proprietor and not sure about what some of these different tax deductions are.

And let me say this, and I think that a lot of us have had experience with this, when you go see an attorney or you go see an accountant, and you don’t have a really firm background or even if you have a pretty reasonable background and you try to get some information out of them, a lot of times everything they say sounds really good, or you don’t have any way of evaluating how much they really know.

The attorney start spouting off some cases and some legal jargon, and the accountant starts mouthing off IRS code, and it sounds like they really know what they are talking about, and so you say yeah sure, that sounds good, let’s do it. Once you have material like this, you will have more information in my opinion then most attorneys that work in this area. Now I’m not trying to say you don’t need an attorney and you never will, but I’m going to tell you, you’re going to have a very high level of specialized knowledge to the point that if someone tries to tell you what makes sense and what doesn’t, you have a very good idea of whether they’re telling you the truth, or whether they’re up to date on the laws and the rules and the same will be true when you go to an accountant.

The horror stories are out there of people getting horrible accountants and other things, make sure you know what you need to ask. Make sure you understand the background. The sad reality is this, and I discovered this many years ago, and I think all you all can reiterate – nobody will care as much about your business as you do. It doesn’t matter how much you pay your lawyer or your accountant, it doesn’t matter if you think you can trust them necessarily or that they know everything.

You need to make some decisions on your own, and the first of those is – if you’re going to get help from an accountant, you need to be able to evaluate them. And you need to be able to keep up with state requirements, and reports, and forms. Remember I told you about the accountant that did not inform their client regarding the state franchise taxes.

So no one will care as much about your business as you do, so get educated, make sure you understand everything, and then you can make the right choices when the choices come up.

Sterling: Well this is all something very similar to me, that’s why I was basically interviewing CPAs again was because I’m on my third, no fourth CPA – because believe me, everybody sounds exactly like they know what they are doing and they have no question that they’re doing it right. But I’ll tell you what, they don’t have to be there when you’re being audited, and that’s happened to me twice.

I was audited twice and what I was told was incorrect. Once I got there, it’s a whole different story when you’re talking to a tax auditor and he’s saying, “Nope, I’m telling you, you need these.” And you’re thinking to yourself, “Well wait, the CPA said this.” So it’s definitely incredibly important to know, I learned first hand that you have to have some information on this stuff, and some sort of knowledge before you can interview somebody correctly.

Darius: Right, well it’s kind of like the person that goes to the mechanic shop to get their car fixed and the guy says, “Well it’s the Decon X-5 defibulator valve,” and you’re like, “Oh yeah okay, how much is all that?” “Oh yeah, that’s $2,000.”

I mean there’s no way, even if don’t know even just a little bit about cars, there’s no way that you can reasonably interpret whether that person if being truthful or not, or whether they really understand what’s going on. And I’m not trying to say anyone is going to try to sell professional services that you don’t need, but in this case it’s really a question of how up to date is this person on the code? What are they telling me? Does this make the most sense? Then you can have a meaningful discussion.

And a lot of times, when you’re not sure about what someone’s talking about, it just goes in one ear and right out the other. The other thing I want to say is and I remember we had talked and it sounded like you had some situations where the attorney was telling you one thing that made sense kind of from a…well actually the accountant was telling you one thing that seemed wrong, but he was telling you one thing that was relating to a tax choice, but interestingly…and I think we got into this in the emails… the accountant was telling you something that had to do with a tax choice.

The funny thing is, the accountant was wrong…the accountant was telling you something regarding a tax choice, but what the attorney was telling you actually…what I’m trying to point out here is what the accountant was telling you, you needed a single member LLC to use sub chapter S, or was that the attorney?

Sterling: Yeah, the CPA guy said that I can just do a single member LLC, so that I could get this sub S-Corp thing that you said? And then the attorney said he was just really blasé about it, he was like, “Yeah you can do it that way, or you could keep both members.” But really that’s the wrong way to tell me I think.

Darius: Well here’s the point I was going to make, the accountant was telling you something that may have made sense from a tax perspective, although it sounds like the information that he was giving you was erroneous. But from a tax perspective they were looking out for you, but the accountant was giving you information that from a legal perspective was going to reduce your protection.

And that’s because the accountant was telling you, you should set up a single member LLC. Now the attorney, if he would have…I guess had the heart to tell you, should have said well, that may or may not be a good idea from a tax standpoint, but from a legal standpoint, the single member LLC does not offer full protection in certain situations.

One of which is if there’s a personal bankruptcy, they can go right through the single member LLC, but if you have two members, they generally cannot do that. And that’s the state of the law right now, and it’s probably not going to change. So you can see that there is some legal advice that makes sense, and there’s accounting advice that makes sense, but usually when you try to get your information from two different experts, usually they’ll tell you one thing because they only see it from the legal side, or they only see it from the tax side.

I’m not a CPA, I have to be clear on that, but I have dealt with this stuff in my own business so many times, and being an attorney I filter everything through my legal mind, and I can tell you that a lot of things that the accountant may tell you to do, from a legal perspective may not be the best thing for your business. So having material to take you through both ends of the spectrum will let you make the right decision in that area as well.

Jay: I was going to follow up on; you mentioned that with the two member LLC, there was an advantage there. What if it’s just a husband and wife who are members of the LLC? Does that offer that extra protection, or is that just going to be as easy to pierce because their personal assets may be seen as joint?

Darius: That’s a really good question, and actually I don’t know…that’s one I don’t know if we want to include because what I generally recommend people to do in that case, if you’re in a community property state and we list out all the community property states, but if you’re in a community property state, usually you want to have somebody who’s not your wife or husband as the second member, or as a third member – give them a real small percentage.

Jay: So maybe that’s just getting too deep for this.

Darius: It’s kind of getting deep, we do cover it, and I do address that through newsletters and things like that too, but it’s kind of an issue. And it’s all kind of pinning on this, because we really haven’t seen any cases where it’s stuck. It’s kind of like one of those, we don’t really know yet, but what we do say is if you’re in a community property state, you probably want to have just some relative or someone like that have a small interest, maybe 5%.

That’s the answer, and we go through that with folks, and we have articles and all that kind of stuff on this so they won’t be at a lack for that information, that instruction but it kind of gets detailed, but it’s a hell of a question. It’s a real good question, and it’s one that we’re just kind of waiting to see what happens. But the safe end is for you to do it that way.

Sterling: The attorney I just talked to, I wanted because of the CPA thing that I should have an attorney go over my LLC again. I called the attorney and said how much is it to just look over my LLC and make sure it’s formed correctly, and he said, “Uh $600-$700 bucks.” Now, I was like wow that’s a lot to just look at it, it’s already formed. It’s already filled out, it’s already done. How much does it generally cost to set up an LLC through an attorney?

Darius: Well generally it would cost about that much, it’s going to depend on what the attorney charges, it could range anywhere from $500-$600 to several thousand dollars, as much as $3,500 to $4,000. The thing that is sort of the irksome spot with me is that you don’t really get the instruction on how to run the LLC effectively. It doesn’t necessarily mean you’re going to get all the forms you need, all the instruction you need, it doesn’t mean you’re going to get instruction on how to run the business in a low-liability manner.

So you end up, if you walk out of there and you only have the thing filed, and you have no idea how to run it, really you’re going to need a lot more instruction. So I get a lot of people call me and say, “You know what? I saw your materials, they look great, but I already have an LLC set up, I don’t think I need it.” I say you know, that’s wrong, because we cover so much way beyond setting up the LLC because if you haven’t got much out of this today, the whole point that I want to make is, it’s not just setting it up.

It’s everything you do afterwards, and in that regard, that’s why we spend so much time covering all that information. So we do tell all of that, and I would say that it would take a great amount of time to go through all of this information.

Jay: Okay, just to put this in perspective then, maybe give us an idea of how much you charge per hour as an attorney and if you were to walk somebody through all this instruction that you’re talking about, how many hours are we looking at that somebody would be paying for to get that instruction?

Darius: That’s a great question, generally between $180-$200 an hour, and that’s why I find this course to be so great is because for folks that are starting out in business that don’t have the time, or really don’t have the money to have an attorney walk them through every bit. There’s no reason that they should be out there incurring liability, getting into bad business practices and getting into situations that could harm them.

Honestly, it would take me about 35 hours to go through and cover all this stuff with somebody. That at $200 an hour is quite a lot of money, over $6,000. The other thing is that we don’t generally – an attorney generally will charge you extra money for forms. So it may cost you $100-$150 for each form and that sort of thing. This material covers a great deal of forms, in fact it can include well over 50 forms that you can use in your LLC immediately for a myriad of transactions, they’re not fill in forms like you find. They’re usable on Microsoft Word, you can open them up, you can change them; you can edit them. Or if you want, you can utilize some of the pre-printed forms, but all of them are available on Microsoft Word. So you have a great deal of instruction, a great deal of information here that we do include in the materials.

Jay: So Darius, I have a question actually, I mean recently I had a partnership where we went through a splitting up, and of course I’m doing business really through Internet Business Mastery with the distinguished Sterling, but we have a situation…we speak to a lot of solopreneurs on this show, but we’re in a situation with our business here where Sterling and I are partners, and we’re doing business together.

So maybe could you speak a little bit to the issues that might arise when it comes to going into business with somebody, and what you should be aware of?

Darius: Well this is a real important issue, and we talked about the liability issues from suits between your business and outside parties like competitors or other people that are in the same industry. We talked about tax issues and saving money in taxes. Of course we covered reducing liability, which is money in the bank so you can keep going forward. But one thing that most people don’t think about is disputes between individuals in the business.

And if you do business on a handshake, you’re looking for trouble, because you don’t have an agreement that is structured, the details, the obligations and rights of parties. One thing we’ve done in this material that is just phenomenal is we’ve gone through and we’ve spent literally about four hours walking through one of the gold standard agreements for a small LLC. And it will detail exactly some of the protections you would want to include in there.

For example, how will your company handle trade secrets? Customer lists, confidentiality information, do you have a non-compete agreement? What happens if Sterling decides to go to another competitor, who will take the list? If you don’t decide those things first, chances are you may not decide them, or it may be too late when you want to enforce that.

So we don’t just cover tax issues, we don’t just cover getting sued, we cover the mechanics of going into business with other parties. Here’s another one that most people don’t think about – let’s say I decide to go into business with a guy named John, and we’re good friends. We’ve been friends since college, and I like him and he likes me, we work well together and we share some common traits and we have some strengths, where the other has weaknesses.

And let’s say that John decides for whatever reason that he’s tired of the business, he can’t take it any more, and he decides he wants to sell the business. I plead with John, don’t sell your interest; I want you to stay with me in the business. One day he’s like, “I can’t,” and he sells it to his uncle Fred. I have no idea who Uncle Fred is, I don’t want to work with him, I don’t have any desire to work with a stranger, plus the guy doesn’t know anything about business, and now I’m a 50/50 partner with this guy.

Guess what? The business that was going great now may suffer immensely, or I may just hate it. As a result, what happens? I’m stuck. You have to have certain controls in place that will dictate what will happen if somebody wants out of the business. How would they sell their interest to the other party? Is there a buyback right, is there any type of control there?

Another example, let’s say that you’re in business with an individual who’s married. In some states, if the party gets a divorce, and let’s say your partner gets a divorce, and the wife takes control of the business or takes control of the shares, guess what? Now you could be in business with the bitter ex-spouse of your former partner, or your former shareholder. So one thing we’ve done, and we’ve spent a great deal of time on is covering all of those issues. And that’s not just talking about them from the theoretical perspective, but putting in place really detailed agreements and specifications that honestly it would take an attorney thousands of dollars in fees to create. And I’m being really honest here because I know what these things costs, and we go through it, but we go a step further.
Because we don’t just leave it out there, and say look here it is, we walk you through it step-by-step on CD audio, so you understand why that’s there, what that means. What about arbitration agreements, and what happens when you have a dispute between you and one of the members of the business? Do you want to automatically get an attorney involved and have to go to court and file a lawsuit? Or do you want to have an arbitration mediation provision that says if there is a dispute between the parties, we will go to mediation.

Mediation is a form of resolving legal disputes outside of court. It’s cheaper, it generally will result in a much better decision, it will save thousands of dollars in attorney’s fees, and those are the kinds of things that most small business owners don’t think about. See here’s the thing, when you start a business you get really excited, and I know – I’m in business every day, and I want to do well. And I think about success and succeeding, but you have to think about and make provisions for what may go wrong in the business, and make plans for that.

And so for all those reasons, there’s just an absolute wealth of information in this material, much, much more so than the cost of the materials.

Jay: So you talk about all those kinds of issues in your course as well? Besides of just the setting up and the running of the business entity, you also talk about these kind of partnership issues and things that should be thought about?

Darius: Oh absolutely, and I’ll tell you something else we didn’t get to talk about. It’s almost like trying to talk about the dictionary in a short amount of time, but I’ll tell you – we also cover just what I call good business practices. You know what, here’s the deal with business entities – a business entity is a legal arrangement between you and the state. It is a way for the state to promote businesses, and for there to be more commerce.

The state and the United States and any country as a whole, welcomes business – it increases the tax base, it provides jobs, there’s a lot of good things. In order to encourage businesses, the idea of Limited Liability came into being. In the old days, people would contribute money to businesses and they would have full liability – meaning if the business went bad, they had complete liability, and all their assets were at risk.

When you have a business structure however, you limit that liability, but it is an agreement between you and the state. So if you’re in the state of Florida for example, or the state of New York or California, those states are saying, we will limit your liability to only the amount you invest in the business and you have in the business. But for us to honor this contract between you, you have some things you have to do. You have to fill out certain forms every year; you have to pay certain state fees if applicable. And guess what? You have to act in a fair manner; you have to conduct your business in a manner that respects other parties. You cannot perpetuate fraud, you cannot have one sided agreements to try to cheat or swindle, you cannot perform illegal activities, and so there is a whole issue relating to how do you run the business in a manner that reduces the chances of getting sued.

See we talk about liability protection, I mean a lawsuit really is like at the end of the line. We don’t want to think in terms of business – well we want to keep our assets if we get sued. If you get to the point that you’ve gotten sued; you may have tried really hard because you have a bunch of opportunities probably to make things right with the party who’s upset. If you run your business correctly, it’s kind of hard to get sued these days as long as you run it correctly.

But you have to plan for the worst, don’t be naïve and say well I’m just going to be nice to everybody. Well, things happen. But when you have your entity set up and when you have the materials in your hand, and you know how to handle everything, you’re also going to get instruction on how to run the business so as to reduce the chance of being sued. So we cover a great deal of information really that goes so far beyond the price of the material, it’s just amazing.

But I did it because I’ve seen these mistakes over and over again, I think everybody should have the chance to have a profitable business. It should not be held back from their dreams, or their goals, or their ideals because of fear or because of lack of understanding, or because of not understanding business processes. I wanted to make this stuff simple for people to understand so they could do it, they could profit from it, and they could grow.

Because in that event, we all benefit, we all profit, we all grow. And that’s what this is all about.

Jay: Well I need to go back and look through your course, because sorry Sterling, I’m not going to end up in business with Uncle Frank. I don’t care how nice he is.

Sterling: Oh, he’s a great business man.

Darius: He owned a deli for twenty years, he knows all about the internet.

Sterling: So now we have your wealth building LLC package; is there anything else you want to say about what it includes, and it’s huge. It covers everything, it has the forms, it’s got audio, DVDs, what else do you want to say about it?

Darius: Well definitely, we do cover a lot of information. There’s a manual in there, we made it really easy to understand. It’s not a lot of legal jargon that you look at and go, “Oh man, my brain is spinning.” You know for nearly every new concept that we introduce, we have a couple of examples that make it really easy. And if need we have pictures; we have diagrams. I mean we keep things so simple, but here’s the other thing I learned about trying to teach people stuff.

People learn a lot of different ways, some people learn by reading, some people learn by listening, some people learn by doing, and so we have a lot of different learning methods that we employ in there. We have CD audio that you can listen to in your car; we reinforce the CD audio through online information in the research center. We also have the written manual, which is very important. I think most of your time should be spent there but where you don’t understand it, if there’s a chance there’s anything in that written material, we have audio information that takes you through it in a slightly different way.

You’ll hear it explained a little differently, so you understand it. We also include summaries for all fifty states and District of Columbia. This is not a one state fits all kind of course; where there are exceptions we detail them. We go through and list out all the active links to the websites, so if you want to get on and file your paperwork and pull all the online forms, we have hot links at my website that you can login, pull up the documents, and click right in. We also have all the links right on the state pages.

So we have a lot of pertinent information that is state specific. We also have audio instruction, which is critical, and very important. We also have the fill in forms that we have in hard copy format, and also electronic format so that you can change them around, you can add things; you can remove things. Where there are decision points, we include boxes where we ask you a question, do you want to do this, or you may want to do this, consider this, and you can make choices on that.

The other thing is if you decide to take your LLC paperwork to an attorney, you will save a great deal of money, because the attorney is not needing to start back from square one. You have most everything in place; you probably will have more than the attorney would have even given you. I’m not going to make that a promise, but in many cases I do find out from customers that that’s the case. So your chance of minimizing any fees is going to be very, very high. The other thing that is really interesting is we have some online tutorials on my website that you’ll be able to access once you purchase the materials, and you’ll have links to get into those.

We also include one year of email support from me, and I am the author. Darius Barazandeh, I am an attorney, and you have my email address and email support from me. And it’s one of those things that people say, “Oh man, I just didn’t think I could contact you,” and surprise, surprise; they can. I answer emails, and I just don’t answer them in just one or two line answers, I spend time making sure you understand the information, and I’m always welcomed to get an email from you.

The other thing that we do that’s really exciting is, we have a loss and protection seminar DVD. And the way this works, talk about a risk free offer is – if you get the materials, and for whatever reason you’re not satisfied with them, you can keep the Limited Liability Company Loss & Protection seminar DVD video for free. It’s your free gift, and that will be a tremendous value to you, because it will keep you away from bad business practices and allow you to run your business in the safest manner.

And we’re so sure that you’re going to be so absolutely impressed with this that we do offer that as a free gift. And let me say another thing regarding tax issues here. The cost of these materials, if you currently have a business and you are operating the business, they are going to be costs that are immediately deductible. In the event that you have a new business that you’re starting, then they are also deductible, but then you will just deduct them a little bit over time.

So the cost of the material is tax deductible, so you have to take into account there’s tremendous tax savings from being set up correctly, there’s tremendous protection from lawsuits and liability from knowing what to do. There’s tremendous professional fee savings in the event that you need one to help you with your business, but you’re also benefited in that fortunately, the tax code allows for the deduction of educational expenses and materials that relates to your business.

Jay: I’ve got to say, that sounds like an incredible value, I mean if you just consider the fact…I mean just the email. I mean how much does it cost to have a lawyer, an attorney basically on retainer by email. I mean that’s an incredible value there, not to mention all the forms. I mean you said a form can be a $100-$150 a pop, and then you throw in all that information and then the audios and everything you need. I mean to me, it just seems like a definite no-brainer, and after picking your brain now for the last while, I’m excited to have these materials at my finger tips to be able to use in our business that we’re setting up here and be able to make sure that we’re really covered and have all the protection of the tax benefits and things.

That’s just an incredible value that you’ve put together, so that’s really awesome. And I just want to let our listeners know that if they’ve recognized a definite need, and I think every business obviously has a need for these things. They can get their hands on this course as well that Darius has put together, and we’ve made it available on our own website at InternetBusinessMastery.com/LLC and you get all this stuff that Darius just mentioned, and the whole course and the guarantee, and the bonuses, and the access to him by email, the membership site, and all that stuff is made available to you at just a fraction – I mean we heard him say earlier, it would be thousands of dollars to have someone sit down with you, an attorney, sit down with you for 35-40 hours and walk through all this stuff with you.

But you can get it at just a fraction of that price, again at InternetBusinessMastery.com/LLC is where you can check all the details on that course and grab a copy for yourself. Well thanks Darius, and it’s been awesome. I know I’ve learned a lot in talking to you on this interview and being able to pick your brain a little bit. I’ve already recognized a couple places that I can go and strengthen my business, strengthen my legal protection, and my tax saviness by applying some of the tips you’ve pointed out to us this evening. Is there anything else you want to share with us before we let you go?

Darius: Well let me say…one thing I want to say is, I want to be sure somewhere to say that it’s not legal advice. I’m not offering legal services, because in states where I’m not licensed, I’m not acting as anybody’s attorney selling them the course. I don’t know, you may want to take out the part about retainer, because when you’re emailing consulting, it’s like having an attorney on retainer. It kind of makes it like it’s a legal service, it’s okay. We probably just want to clean that up and make it so that this is not legal advice, that’s just the disclaimer that it’s educational materials, which you kind of have to say on these things.

The final thing I want to say, let’s see – what did I want to say….hmmmm. Ah, well the last thing I want to say really is I’m so glad everyone’s taking the time to listen, I really wanted to get people some good information, there’s always something to learn, there’s always something to do. But what you want to do is you want to be in that percentage of people that has everything set up in their business correctly, and they can go forward and push and move towards doing the things that you like to do.

I don’t think you’re starting an internet business so you can become an expert on LLCs. And my goal is not exactly make you an expert, but it is to give you the tools so that you can continue doing what you like to do. And the reality is you’re going to have to know a little bit in order to make sure you’re making the right decisions. It won’t be overly burdensome, but it will be important. The other things is, a lot of times people contact me, they’re in a business and they’re, “You know what? I’m trying to get started, but I just can’t seem to make any headway.”

And I say, “Well let me ask you, have you set up a company? Have you determined the name of your business? Have you set up business cards, have you done this, have you done that? Have you cleaned out an office space for yourself,” all these sort of things that people never get around to doing. And then they wonder, well why I am not succeeding? The reason is this, there’s only a certain number of mental hooks that I call them that you have in your brain.

If you occupy those mental hooks with tremendous number of ‘to do’ things that you haven’t done, that you know you need to ‘done,’ and in essence your subconscious mind will hold you back every time you want to try to do something new or do something that’s beyond your comfort level, and you’ll say, “You know what? I still didn’t set up that company, and someone told me I need to do that, or I’ll get sued. You know what, I won’t go out and try to put together that joint venture.”

Or, “You know, I’m not sure how this all is going to work, I’m not going to do it.” Or, “You know what? I really didn’t make sure that I figured out what was the best tax decision for my business, I don’t know. I’ll just worry about it later.”

The more stuff that you can get done with and you can put to rest, the more energy you’ll have to devote to your business, the more clearer thinking, the more time you’ll have to grow and expand. And that’s the most important thing, and if you have everything set up at once, you can concentrate on the vision you want to achieve which is your business and where you want it to go. And if you keep that vision clear, if you persevere, if you stick to it with unbridled and never ending determination, you absolutely will succeed. That is a universal law, you have to visualize what you want in your mind, and stick to it unrelentingly.

But if you have little hang ups here and there, things that you haven’t done that you know that you need to do, you’re really going to hold yourself back because mentally, that mental game is so, so critical. In fact, it’s really almost 100% of the whole equation. So get everything in order, we’re here to help, and I’m so glad you took the time to listen and if you have any questions or anything, email these great guys at Internet Business Mastery and they will forward any emails or questions that you have straight to me, and I’ll be glad to route it back to them, and we’ll all get back with you.

Jay: And again, you can check out more information about Darius and his course at InternetBusinessMastery.com/LLC. Thanks again, Darius, and I’m sure we’ll be talking to you again sometime soon.

So there you have it, our interview with Darius talking about LLCs and the importance of having a good business entity to protect your wealth and all those benefits and things that he brought up. So if you’d like to know more about Darius’ system for starting your own LLC, you can go to InternetBusinessMastery.com/LLC, and that’s the same product that we’ve used to set up LLCs in the past, have gone through and it’s just awesome information no matter what state you live in.

Now grant it, we know we have listeners all over the world, so this is a bit more of a United States centric type thing, but there’s some good information on his site and it’s an excellent very thorough product that gives you all kinds of…I mean we’d already started LLCs before we listened to this thing, but then when I got my hands on his Wealth Building LLC kit and listened to it, it was like wow, there’s a lot of things that we haven’t thought of. And just make sure you have all your I’s dotted and your T’s crossed as you’re building up your new internet empire and building up your wealth, you definitely want to make sure that stuff is protected accordingly.

Alright, let’s go ahead and jump into the announcements and breakthroughs. I don’t know if we have any announcements, but we definitely have a couple great break through to share with everyone.

Sterling: Alright, so the first breakthrough is a good example that a breakthrough does not have to be I just made $150 million dollars.

Jay: You did?

Sterling: It doesn’t have to be that; it can be the first steps. Okay, so we’ve got Adam, and I don’t even know if I could even go for this last name. Do you know how to say the last name?

Jay: I think it’s Urstel.

Sterling: Perfect. Alright, so here’s what he said, “Well this is probably the smallest breakthrough mentioned in the history of this forum…” Now again, these are from the Internet Business Mastery Academy forums, “…but I got my first follower on Twitter, and my first subscriber to Aweber, and it appears to be a different person. Still having difficulty on bringing focus to my Aweber subscriber forum, but like I’ve been told so many times – fire, aim, fire.”

And this is his site – HowTechnologyHelpsBusiness.com. And this is just another example of every single step is important when you get started. I mean even getting that first person to subscribe to your opt in list is something to actually celebrate within yourself. Then it will be getting the first person to buy the product, and then it’s getting a certain number of sales each month. And it just keeps going on and on, we have breakthroughs every single month for ourselves as well, at every single level. But of course the first step is going to be to get that opt in form up, and to get an actual subscriber. So good job, Adam.

Jay: Yeah, we were just talking about this, this morning, and the whole process of, okay what keeps people moving, what gives them momentum? What keeps them from finally getting overwhelmed and just stopping? And it’s breaking this process down and realizing, and just thinking forward to the next little milestone. It can seem very daunting when you’re just starting from scratch and you’re going okay, I’ve got to get to my goal of making $5,000 a month online or whatever it might be.

And really it comes down to designing your lifestyle and designing what you want it to look like. And when you’ve got that thing mapped out, that’s an awesome accomplishment right there. And then the next thing is okay, do my niche research, and when you finally pick a niche, that’s an awesome breakthrough. And getting your first subscriber, making your first dollar, getting your first Twitter follower, I mean these are all great milestones. But I remember you were saying Sterling, that sometimes you don’t give yourself credit for even some of the things now that really are pretty significant.

And I do the exact same thing, so that’s why it’s awesome to hear about a breakthrough like this when you’re just starting out, that first Twitter follower, that’s a big deal. And eventually yeah, you’ll get to the point where you’re getting a Twitter follower every day, and every hour maybe even. But when you’re just starting out…

Sterling: Unless that first one’s your mother…sorry you don’t get to count that. Wow if my Mom was even on Twitter, I guess I would be pretty surprised.

Jay: Alright, the next one comes from Maren Kate, and she shares in the Academy forums, “I just launched my first website for my business, or at least my first business. It isn’t nearly what I want it to be in the future, but I re-listened to all the courses, and decided that I needed to take the leap regardless how ready I was. Thanks guys, the site is PowerSellersPrincess.com for those that want to check it out, Maren.”

Then later in the month, she shared, “I know this seems like a baby breakthrough, but it meant a lot to me. I sold my first e-book.” So again, that’s a big deal. We’re totally thrilled to hear that she sold her first e-book. And I went and checked out her site, Power Seller Princess, and it looks fantastic. She’s got a great cover for her e-book there. I mean it’s got all the elements that it needs to have, and it’s looking…well done Maren, it’s a really good looking site.

So I think you’ve done a fantastic job, so congratulations on taking action, and selling that first e-book. And just onward and upward from here.

Sterling: Yeah, and thanks for telling us about your breakthroughs.

It’s time for the Internet Business Quick Tip….

Jay: Alright, this episodes’ Quick Tip refers right back to the interview we had, we just want to remind you…because this is an important part of building the right foundation for your business, that you can go to InternetBusinessMastery.com/LLC to check out Darius’ LLC course. I mean I already kind of talked about it earlier, but that’s also the Quick Tip for this episode, because the cost of the course is just nothing compared to the amount of knowledge that goes into there from an actual lawyer, and you can easily go and hire a lawyer locally if you want and spend several hundred dollars, but this is definitely another…and that’s a fine direction to go if you’ve got the funds and that’s the way you want to do it, but this is an awesome way to go if you want to save a bit of money and kind of get all the information that you need and feel very confident that you’ve put together a good LLC for yourself.

So check that out at InternetBusinessMastery.com/LLC.

Sterling: Now if you’ve like dozen of other resources such as this one, you can find them in the Internet Business Mastery Academy along with video tutorials of us showing you exactly how we use them. And to get a 30 day no risk trial membership to the Internet Business Mastery Academy, visit freeaudiogift.com.

That’s it for this episode of Internet Business Mastery, until next time we wish you ultimate success in your internet business.

You’ve been listening to the Iconiclass of the 9 to 5, and the purveyors of freedom and fulfillment – Sterling and Jay! Sterling and Jay invite you to discover one of their most popular audio programs ever, the free builders of designing your ultimate internet lifestyle! Visit freeaudiogift.com now and sign up for the free weekly Internet Business Mastery email newsletter! And you’ll get instant access to the life changing audio presentations, pulled directly from the content of the acclaimed Internet Business Mastery Academy membership community. Go now to freeaudiogift.com! Internet Business Mastery – free your mind!