Creating an LLC for the future.

[grizzly0925]

Hey all,

I am curious to when you all started a business specifically an LLC, when you started to fill. I am not looking into getting into catering for about 2 years probably on the side which would mostly be family, friends, coworkers, and friends of friends (hence why I want to make sure I do this right and am insured etc). I have some restaurant experience, I am aware of the grind and terrible hours I love bbq and it's become a huge part of my life since I have gotten out of the service. It's smoketherapy

I would also kick myself in the but for not taking a shot at something. Even if it is something relatively small.

Is it better to file and have it on hand with a EIN I wish I knew more about how this works in the long run. Open to any extra business reading material you may have.

Looking to start buying some small stuff here and there piece wise like cambros etc if i can find used at a good price.

[Cook]

What would be your purpose to form an LLC two years before you project needing it?

[grizzly0925]

Originally Posted by Cook

What would be your purpose to form an LLC two years before you project needing it?

I guess retaining the name for the business. I would like to do smaller cooks for people sooner, unfortunately NJ doesn't have cottage laws so i would have to essentially go big or go home from the start unless I was doing things on the down low, which would mean possible legal trouble so I wouldn't want to do that.

[Porcine Perfection]

I got an LLC in Missouri years ago. It was a pretty simple process. I got it for the EIN. Not restaurant/catering related.

I would check with your state on the requirements and fees. Make sure that your LLC name protects others from using it. Some states it does, others it does not.

If nothing else, it gets you a pass to Restaurant Depot and other business only places.

[wbratt1]

I just formed one in Georgia a few weeks back with anticipation of selling sauce. In Georgia, the name is protected as you have to wait for a week or so to get approval for your name after submitting. They make sure it's not the same or very similar to another LLC filed in the state. I think the fee was ~ $100 and and an EIN is free once you have it.

[SmoothBoarBBQ]

As something to consider you'll want to check and see if there are annual filings needed in your state. I'm in North Carolina and every year I have to file my "annual report" which costs $200 to file...1 piece of paper with my contact information and it costs $200 per year...government is such a money-grubbing sinkhole.

BBQ, outside of a restaurant, can be a very frustrating experience when dealing with the health department / environmental health. Outside of simple things like finding a commissary kitchen, health departments really like to give people problems with the type of smokers they're using. Some states (or cities or counties) will require your smoker to be NSF which means it's meets or exceeds the standards of equipment in a commercial kitchen. For smokers this means stainless steel racks, stainless steel interior, etc... NSF approved smokers are few and far between, and they cost a small fortune. Ole' Hickory, Southern Pride, Fast Eddy's Cook Shack, and Myron's Commercial cookers are some of the more common smokers you'll see for food service.

So before you jump in and look at BBQ as a career path you'll need to figure out how far your state will allow you to go before they start standing in your way. Make an appointment (or walk-in) with the health department and discuss your plans / vision, and see if they can set you on the right path. This will stop you from wasting your time if they aren't willing to budge and want you to have a $20,000 smoker. Once you know what your health department requires you can plan further.

Good luck buddy. I started a BBQ food trailer business and it was one of the most frustrating experiences of my life. Starting an LLC was easy as it took less than 30 days. I went with LegalZoom because it was only $300 (or near) and they took care of everything. Truthfully opening an LLC is very easy and requires a very small amount of paperwork...definitely something you can do on your own. I just had too much going on as I was dealing with getting my food trailer built and that was an experience I wouldn't wish on any of my enemies.

[kurtsara]

Originally Posted by grizzly0925

I guess retaining the name for the business. I would like to do smaller cooks for people sooner, unfortunately NJ doesn't have cottage laws so i would have to essentially go big or go home from the start unless I was doing things on the down low, which would mean possible legal trouble so I wouldn't want to do that.

Typically cottage laws are for cakes and baked goods, not something that could get people sick if handled wrong.

[thirdeye]

Other than protecting your personal assets, and showing potential customers that you are serious enough to be registered with your State.... setting up an LLC now will make it a little easier when calculating your income or loss relating to your business venture.

A new business has all kinds of start-up expenses and paying for those from a 'business' bank account keeps you more organized. And makes it easier for your accountant to document expenses when it comes to deducting them. Something like deducting costs for business cards might be a given, but lets say you need a $300 set of knives. If they are paid for by your business there is less of a chance the deduction will be questioned.

Contact your Secretary of State office, or a local Small Business Development Center. They should be able to help and should have many online resources for you to check out.

[TravelingJ]

Originally Posted by thirdeye

Other than protecting your personal assets, and showing potential customers that you are serious enough to be registered with your State.... setting up an LLC now will make it a little easier when calculating your income or loss relating to your business venture.

A new business has all kinds of start-up expenses and paying for those from a 'business' bank account keeps you more organized. And makes it easier for your accountant to document expenses when it comes to deducting them. Something like deducting costs for business cards might be a given, but lets say you need a $300 set of knives. If they are paid for by your business there is less of a chance the deduction will be questioned.

Contact your Secretary of State office, or a local Small Business Development Center. They should be able to help and should have many online resources for you to check out.

Does that also apply if you are selling baked goods under the cottage law?

[thirdeye]

Originally Posted by TravelingJ

Does that also apply if you are selling baked goods under the cottage law?

Well, I believe so unless you have a specific example. I'm very pro small business.

For what it's worth.... Wyoming has the best cottage food and food freedom law in the United States. They passed the Wyoming Food Freedom Act in 2015 making us the first state to eliminate most regulations on local homemade food sales.

Unlike most states, Wyoming residents can sell ANY kind of food, as long as it does not contain meat (and some meat and poultry products are allowed, for those who qualify). This allows types of products that are not even close to being considered in most other states, like veggie lasagnas, soups, ice cream, salads, smoothies, cheese, raw milk… the list goes on and on.

For the first five years, only direct, in-person sales were allowed, and foods needed to be consumed within a private home. After a couple relatively minor amendments in 2017, Wyoming significantly amended the law in 2020. That amendment enabled indirect sales (at grocery stores, retail locations, etc) and wholesaling of nonperishable foods. Also, the home consumption restriction was removed entirely, allowing items like wedding cakes (items that would not likely be consumed in a private home). The 2020 amendment also added a $250,000 sales limit. Aside from that, there are ZERO regulations from any governmental agency: that means no permits, inspections, licensing, fees, zoning approval, etc. The only exception is a very minimal labeling requirement for nonperishable foods sold in retail stores.

[TravelingJ]

That's really impressive! And quite the sales limit. I think when I looked Missouri was around 50k in sales, which would still be impressive for selling the allowables from home. Our list is significantly more restrictive than WY.

[grizzly0925]

Originally Posted by SmoothBoarBBQ

As something to consider you'll want to check and see if there are annual filings needed in your state. I'm in North Carolina and every year I have to file my "annual report" which costs $200 to file...1 piece of paper with my contact information and it costs $200 per year...government is such a money-grubbing sinkhole.

BBQ, outside of a restaurant, can be a very frustrating experience when dealing with the health department / environmental health. Outside of simple things like finding a commissary kitchen, health departments really like to give people problems with the type of smokers they're using. Some states (or cities or counties) will require your smoker to be NSF which means it's meets or exceeds the standards of equipment in a commercial kitchen. For smokers this means stainless steel racks, stainless steel interior, etc... NSF approved smokers are few and far between, and they cost a small fortune. Ole' Hickory, Southern Pride, Fast Eddy's Cook Shack, and Myron's Commercial cookers are some of the more common smokers you'll see for food service.

So before you jump in and look at BBQ as a career path you'll need to figure out how far your state will allow you to go before they start standing in your way. Make an appointment (or walk-in) with the health department and discuss your plans / vision, and see if they can set you on the right path. This will stop you from wasting your time if they aren't willing to budge and want you to have a $20,000 smoker. Once you know what your health department requires you can plan further.

Good luck buddy. I started a BBQ food trailer business and it was one of the most frustrating experiences of my life. Starting an LLC was easy as it took less than 30 days. I went with LegalZoom because it was only $300 (or near) and they took care of everything. Truthfully opening an LLC is very easy and requires a very small amount of paperwork...definitely something you can do on your own. I just had too much going on as I was dealing with getting my food trailer built and that was an experience I wouldn't wish on any of my enemies.

Thanks for the honest and truthful insight, I will have to look into setting up an appointment with the health department etc. Thank you again.

[SmoothBoarBBQ]

Originally Posted by grizzly0925

Thanks for the honest and truthful insight, I will have to look into setting up an appointment with the health department etc. Thank you again.

Good luck buddy...BBQ as a job can be a lot of fun, but it's also a metric ton of work. I've said it before on this forum but I work longer hours and am on my feet more than when I was in the Marine Corps. haha My normal day is 12-14 hours between cooking all night and morning, making side dishes, serving lunch, and then cleanup / shopping / preparation for the next days cook.

[Cook]

Originally Posted by SmoothBoarBBQ

Good luck buddy...BBQ as a job can be a lot of fun, but it's also a metric ton of work. I've said it before on this forum but I work longer hours and am on my feet more than when I was in the Marine Corps. haha My normal day is 12-14 hours between cooking all night and morning, making side dishes, serving lunch, and then cleanup / shopping / preparation for the next days cook.

My youngest nephew just went through the Crucible at Parris Island...graduation scheduled for the 26th. He is "supposed" to be at Lejeune soon...we'll see. We're from Wayne County & his family beach house is at Emerald Isle, so he's basically coming home...at least for a while.

[grizzly0925]

Originally Posted by SmoothBoarBBQ

Good luck buddy...BBQ as a job can be a lot of fun, but it's also a metric ton of work. I've said it before on this forum but I work longer hours and am on my feet more than when I was in the Marine Corps. haha My normal day is 12-14 hours between cooking all night and morning, making side dishes, serving lunch, and then cleanup / shopping / preparation for the next days cook.

I remember those days in the Marines. 2010-2015. As long As I am doing what I love I won't mind it. There are a couple local guys I am meeting up with in the coming weeks to get some more information about NJ in general with HD rules how they started etc. This might just turn into not being my thing but I love doing it, and being as there isn't too many great bbq places in NJ it would be nice to spread the love haha.