Monday, November 21, 2016

The Legal Form to Start Your Fitness Boot Camp Business With and Why

This is a continuation of part 4 of How To Build Your Own Fitness Boot Camp. In the last post, I covered Creating a marketing budget for your fitness boot camp business.

Before saying anything at all about this topic, it is first very important that I tell you that I am not an attorney, an accountant, nor do I have any legal background whatsoever. You need to check with an informed professional in your area first before you make any big decisions, and don’t hold me liable for anything that resembles ‘legal advice’. I don’t give that kind of advice. What I am giving you here is something general for you to bring to a professional so that you have some basic understanding going in. It may save you time and money since I already went down this road multiple times.

When you are just getting off the ground, it is OK to just get a quick business license from your state and one for the city you are working in (if necessary). This could be a simple business form like a sole proprietorship. If you are still a personal trainer doing basic training activities and are pretty under the radar, then it is a fine place to start to make cash and keep overheads very low. You can even get started in your Boot Camp in this form of business. Your state will have a website. You just need to look up the secretary of state and the department of licensing for your state and they actually help you do the entire process online and it is getting more streamlined all the time. It only takes a few weeks to get your paperwork and you are in like Flynn.

However, since you are going to shoot for the top, for real success here, you need to be prepared for something beefier. I recommend you ask your CPA about registering an LLC.

From Wikipedia: A Limited Liability Company (LLC) is a hybrid business entity having certain characteristics of both a corporation and a partnership or sole proprietorship (depending on how many owners there are). An LLC, although a business entity, is a type of unincorporated association and is not a corporation. The primary characteristic an LLC shares with a corporation is in limiting liability and the primary characteristic it shares with a partnership is the availability of pass-through income taxation. It is often more flexible than a corporation, and it is well-suited for companies with a single owner.

I always ended up with an LLC, since it gives you some of the basic legal advantages of a corporation without being a corporation, and it gives you a lot of flexibility when you are starting out. They are very easy to file for, very low cost, and very easy to manage. In addition to this, they give you more tax advantages than a sole proprietorship so that you can legally pay fewer taxes, which is a very serious thing in the world of business. If you get over-taxed, you don’t make money, which is the whole point of being in business.

In more recent years, when I start a business, I have found the newer Sub-S corporation pass-through entity status more beneficial for some of my businesses. Again, check with a reputable CPA.

Later, if you grow very large (many multiple locations), you can switch to a different entity, but this probably won’t be necessary for a long time. Again, you may want to check with a CPA before you make the big decisions. If you are in a hurry to start, you can just do it and get it over with, but at the very least you need to be building a team of professionals who can help you, and one of the first ones to get is a good, honest, and trustworthy CPA.

In the next post, I will discuss a key component to any fitness business, Your Name, and Your Brand.

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