Managing multiple small businesses

[mistymoney]

So - as I look forward to quitting the day job, I am planning on keeping my side hustle going, and I have a couple of ideas for some other things I could try to monitize a bit.

I think that a few around these parts have a couple of things going on and wanted to ask how you all manage these?

I got an LLC for my side biz a few years ago, and I subcontract out some of that work.

I might get another LLC as the name of the current one is very specific to the work done, but wondered if anyone had several small ventures under the same LLC, how that might work, etc.

Can you substract purchases from profits without an LLC? Just filing schedule C? If purchase equipment for a venture and then no sales - can you deduct from taxes?

I do have an EA that I will consult a bit before launching anything, but would be helpful to know what questions I might need to ask.

Any thoughts/advice appreciated.

[morethanconquerors]

You can have multiple activities under one LLC, especially if they are all small and have a low risk of being sued over. The main purpose of an LLC is to provide legal protection. Having multiple LLCs would help protect the assets of LLC A if LLC B would get sued, for example.

As soon as you engage in an activity for profit, you are a "business" in the eyes of the IRS and can deduct business expense against revenue. You do not need to have an LLC set up to do this.

You may be able to deduct an equipment purchase with no sales, but it would depend on the situation and would need more details. I would ask your EA for sure.

[Offshoro]

It's really a question of risk - the risk of the business. The concept of limited liability protects the underlying person from having their personal assets exposed in the event of the business taking a nosedive but equally it works the same for multiple businesses - it keeps them all ring-fenced from each other.

If the area of business you are looking at is inherently risky, then you might want to segregate that. If you are an artist and a musician, then one company might be fine. But I wouldn't mix something like a musician business and a childrends playground or something where you are likely to get sued at some point - because it exposes the cash from the musician business too!

In terms of admin, it's easier now with tech companies like Clerky.com or https://stripe.com/ie/atlas or https://www.openforest.co/ that allow you manage a few companies from the one platform.