Moving from full time to part time, what can I automate?
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@guyinpv said in Moving from full time to part time, what can I automate?:
Are you talking about incorporating or creating an LLC?
Creating an LLC is incorporating. It's one of several forms of that. Yes, some form of forming a proper business, otherwise, how will YOU get paid?
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@scottalanmiller said in Moving from full time to part time, what can I automate?:
@guyinpv said in Moving from full time to part time, what can I automate?:
Are you talking about incorporating or creating an LLC?
Creating an LLC is incorporating. It's one of several forms of that. Yes, some form of forming a proper business, otherwise, how will YOU get paid?
Not to mention that you could be sued for everything you have if you don't incorporate.
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@guyinpv said in Moving from full time to part time, what can I automate?:
I already work my freelance stuff, all my "extra" money goes into a business checking account, but there is no separation from personal funds yet. I don't have all that worked out.
That's the first step before you do anything else, including telling your current business about going part time or starting to do any work. Absolutely step one.
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@IRJ said in Moving from full time to part time, what can I automate?:
@scottalanmiller said in Moving from full time to part time, what can I automate?:
@guyinpv said in Moving from full time to part time, what can I automate?:
Are you talking about incorporating or creating an LLC?
Creating an LLC is incorporating. It's one of several forms of that. Yes, some form of forming a proper business, otherwise, how will YOU get paid?
Not to mention that you could be sued for everything you have if you don't incorporate.
Yes, can't be overstated how important this step is.
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@scottalanmiller said in Moving from full time to part time, what can I automate?:
@IRJ said in Moving from full time to part time, what can I automate?:
@scottalanmiller said in Moving from full time to part time, what can I automate?:
@guyinpv said in Moving from full time to part time, what can I automate?:
Are you talking about incorporating or creating an LLC?
Creating an LLC is incorporating. It's one of several forms of that. Yes, some form of forming a proper business, otherwise, how will YOU get paid?
Not to mention that you could be sued for everything you have if you don't incorporate.
Yes, can't be overstated how important this step is.
That's not the advice I generally read online. Even if I'm a sole proprietor, which I would be, I can still get "sued for everything". So generally it's not to worry about until I really need the liability protection or start hiring people or whatever the case may be.
Which LLC are you suggesting for a freelancer? Surely I don't need to be a C corp for this?
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@guyinpv said in Moving from full time to part time, what can I automate?:
@scottalanmiller said in Moving from full time to part time, what can I automate?:
@IRJ said in Moving from full time to part time, what can I automate?:
@scottalanmiller said in Moving from full time to part time, what can I automate?:
@guyinpv said in Moving from full time to part time, what can I automate?:
Are you talking about incorporating or creating an LLC?
Creating an LLC is incorporating. It's one of several forms of that. Yes, some form of forming a proper business, otherwise, how will YOU get paid?
Not to mention that you could be sued for everything you have if you don't incorporate.
Yes, can't be overstated how important this step is.
That's not the advice I generally read online.
Um, then you are reading some seriously crazy stuff. I've never read anything that didn't say that this was the absolute number one most important thing ever. Anything you read that suggests anything otherwise, stop reading immediately, that's not a business publication.
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@guyinpv said in Moving from full time to part time, what can I automate?:
Even if I'm a sole proprietor, which I would be, I can still get "sued for everything".
Of course, because "sole proprietorship" is unincorporated - the opposite of what we are telling you is the base requirement. It's what is crazy and no one should ever, ever do. In fact, SPs are generally not considered businesses at all, no serious business could possibly consider such a thing. SP literally means "I did nothing that I was supposed to do and am operating as a person instead of a business" and is termed "unlimited liability".
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@guyinpv said in Moving from full time to part time, what can I automate?:
Which LLC are you suggesting for a freelancer? Surely I don't need to be a C corp for this?
You really haven't seen any material on this yet. You need to get a book on this and dig in. LLC and C Corp are two different things. LLC doesn't mean "company", it's a very specific kind of company that is as far from a C Corp as you can get. When we suggest an LLC, the "type" is... LLC. There aren't types OF LLCs, LLC is a type OF corporation. A non-shareholder type.
LLC is the normal thing that you want. But there are B, C and S in most states. There are also LLPs and other things. Lots of options and normally this is where you talk to an attorney long before you talk to the first potential client.
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Why even create an LLC? Just see if you can stay on as a part time employee at the same rate of $20/hr. Even at $35/hr after taxes you'll be lucky to clear $20/hr
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@guyinpv said in Moving from full time to part time, what can I automate?:
So generally it's not to worry about until I really need the liability protection or start hiring people or whatever the case may be.
This is as wrong as this info gets. Your sources on business are very, very dangerous. In some ways this is correct, you don't need to incorporate until you need liability protection. That time is... the first moment you talk about doing business. So while it is true, that statement means what we said - that you need to be incorporated before opening a bank account, before talking to literally anyone but your attorney. Your liability starts the moment you do anything other than incorporating.
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I just don't see any value for you getting paid at a such a low rate as a contractor. The $20/hr as an employee is really about the same without all the hassle.
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@IRJ said in Moving from full time to part time, what can I automate?:
Why even create an LLC? Just see if you can stay on as a part time employee at the same rate of $20/hr. Even at $35/hr after taxes you'll be lucky to clear $20/hr
They decided that if I work less than 32hrs it would not be considered full time but part time, and they would want me to go independent at that point.
This is only taking one day off a week, or working a couple half days. It's not much but I can do this for a couple weeks just to help continue finding more business. Ultimately I'd like to work 20hrs if my freelance takes up the rest. But they can't keep on me on W-2 that way.
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@guyinpv said in Moving from full time to part time, what can I automate?:
@IRJ said in Moving from full time to part time, what can I automate?:
Why even create an LLC? Just see if you can stay on as a part time employee at the same rate of $20/hr. Even at $35/hr after taxes you'll be lucky to clear $20/hr
They decided that if I work less than 32hrs it would not be considered full time but part time, and they would want me to go independent at that point.
This is only taking one day off a week, or working a couple half days. It's not much but I can do this for a couple weeks just to help continue finding more business. Ultimately I'd like to work 20hrs if my freelance takes up the rest. But they can't keep on me on W-2 that way.
They can always keep you on W2, hours are not a factor. If they force you off of W2, that is 100% by choice.
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@scottalanmiller said in Moving from full time to part time, what can I automate?:
@guyinpv said in Moving from full time to part time, what can I automate?:
@IRJ said in Moving from full time to part time, what can I automate?:
Why even create an LLC? Just see if you can stay on as a part time employee at the same rate of $20/hr. Even at $35/hr after taxes you'll be lucky to clear $20/hr
They decided that if I work less than 32hrs it would not be considered full time but part time, and they would want me to go independent at that point.
This is only taking one day off a week, or working a couple half days. It's not much but I can do this for a couple weeks just to help continue finding more business. Ultimately I'd like to work 20hrs if my freelance takes up the rest. But they can't keep on me on W-2 that way.
They can always keep you on W2, hours are not a factor. If they force you off of W2, that is 100% by choice.
Half of the hours is half the cost for them even on a W2. Actually it's less than half because they dont need to pay benefits.
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@guyinpv said in Moving from full time to part time, what can I automate?:
@IRJ said in Moving from full time to part time, what can I automate?:
Why even create an LLC? Just see if you can stay on as a part time employee at the same rate of $20/hr. Even at $35/hr after taxes you'll be lucky to clear $20/hr
They decided that if I work less than 32hrs it would not be considered full time but part time, and they would want me to go independent at that point.
This is only taking one day off a week, or working a couple half days. It's not much but I can do this for a couple weeks just to help continue finding more business. Ultimately I'd like to work 20hrs if my freelance takes up the rest. But they can't keep on me on W-2 that way.
The problem that they are going to face at that rate is that it is going to take you almost no work coming in as a freelancer before you will just drop them. You should find them to be a problem, almost overnight, to keep servicing at that price. Make sure that any contract that you have allows you to drop them in a heartbeat. Because that's SO little money.
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@scottalanmiller said in Moving from full time to part time, what can I automate?:
@guyinpv said in Moving from full time to part time, what can I automate?:
@IRJ said in Moving from full time to part time, what can I automate?:
Why even create an LLC? Just see if you can stay on as a part time employee at the same rate of $20/hr. Even at $35/hr after taxes you'll be lucky to clear $20/hr
They decided that if I work less than 32hrs it would not be considered full time but part time, and they would want me to go independent at that point.
This is only taking one day off a week, or working a couple half days. It's not much but I can do this for a couple weeks just to help continue finding more business. Ultimately I'd like to work 20hrs if my freelance takes up the rest. But they can't keep on me on W-2 that way.
The problem that they are going to face at that rate is that it is going to take you almost no work coming in as a freelancer before you will just drop them. You should find them to be a problem, almost overnight, to keep servicing at that price. Make sure that any contract that you have allows you to drop them in a heartbeat. Because that's SO little money.
I'm sure I'll drop them eventually, or just keep them as a customer in my new business, sticking to the complicated stuff as needed, at my higher rates.
What I'm afraid of is if I go independent but they continue to demand me and my time and basically treat me like I'm still their staff. Obviously, they would not even be allowed to tell me what my hours should be, or when I am to show up or when I can leave. I absolutely refuse to be treated like staff if I'm working for myself!
As for rates and other stuff. I only have a DBA for a year and a half now. My business checking account is opened under that. This will be the first year I've made enough money to significantly change anything about my taxes just by working at night.
I normally do break/fix and random stuff for $40/hr but my freelance rates are $60-$100 or flat project-based.
There are a lot of questions. I have a home office with a designated room. I don't know what business deductions would look like at this point, or how much I'd make and how much overhead there is, none of it.
All I know is I've been here 6 years and there are no jobs in this town. I've got to run my own gig and do something with more opportunity.
If I go 1099 with my company, I would only be offering them "nice" rates as a friend. probably not $40 or $60 but the $30-$35 area sounds nice, unless my hours are cut back lower than 20, at which case I'll just bill them my full rate. I'm not sure how that will work out. They kind of need a full time nerd because nobody there can do computers.
I made 60% of my full time job take home pay just working nights and clocking 9 or 10 hours a week. I'm passing up opportunities to apply for remote work at $80/hr just because I'm still working full time. I'm avoiding looking for new clients because I just don't have the time for more projects. I already have a few clients in limbo due to time constraints.
The ultimate goal is to be able to double my income, or triple it! I need to work backwards how to get to that point. Liability isn't a huge concern, I doubt I'm getting sued any time soon because someone doesn't like the shade of blue I picked! I know it's important.
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@guyinpv said in Moving from full time to part time, what can I automate?:
As for rates and other stuff. I only have a DBA for a year and a half now. My business checking account is opened under that. This will be the first year I've made enough money to significantly change anything about my taxes just by working at night.
A DBA should be assigned to a business. Like "Bob's Hamburgers, LLC" is DBA is "Freddie's French Fry Hut".
A DBA should never be assigned a person, only to a business.
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@guyinpv said in Moving from full time to part time, what can I automate?:
There are a lot of questions. I have a home office with a designated room. I don't know what business deductions would look like at this point, or how much I'd make and how much overhead there is, none of it.
After incorporating with your attorney, the next people you bring on are your CPA and your IT guy. You are the IT guy, so that is covered. Your CPA will answer the tax stuff once there is a business to file under.
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@guyinpv said in Moving from full time to part time, what can I automate?:
If I go 1099 with my company, I would only be offering them "nice" rates as a friend. probably not $40 or $60 but the $30-$35 area sounds nice, unless my hours are cut back lower than 20, at which case I'll just bill them my full rate. I'm not sure how that will work out. They kind of need a full time nerd because nobody there can do computers.
If they need a full time person, then you should be billing them for full time stuff
You have your first customer and are in good shape. -
@guyinpv said in Moving from full time to part time, what can I automate?:
Liability isn't a huge concern,
Yes, it really is. It's HUGE. This is how one mistake leads to you losing your home, cars, business, bed, chairs, blankets, the kids' toys... everything. Liability isn't huge, it's INSANELY ENORMOUS.
