The Mental Side of Forming an LLC

 Feature Image: Unsplash Copy By:  Jeanette Smith

Feature Image: Unsplash
Copy By: Jeanette Smith

Each month, your local Freelancers Union SPARK group brings together a group of freelancers, entrepreneurs, and creatives to explore topics relevant to freelancing life and work. November’s program centered around knowing when and how to form an LLC for your freelancing business. Legally and financially, talking to a CPA and attorney are the only sure ways to know if an LLC is right for you.

But there is another aspect of starting a business that is less often talked about—the mental aspect. The way I see it, there are two very real benefits to forming an LLC or other legal entity for your business: it makes the experience more real and it allows you to separate your work life from your home life.

Making it Real
I bet you sometimes say things like “I just do it on the side” or “it’s not my real job” when people ask you about your freelancing work. If you want to be serious about making freelancing your career, then you should form an LLC. Legally, it comes in handy for protecting your personal liability by keeping it separate from the business. If you plan on making money and buying yourself nice things, then this is a must.

But mentally, forming a company can feel like a legitimization of your work. It’s no longer a hobby and you’re no longer an amateur. You are a professional. To register a business, you must have a company name. Sure, it can be your name, but the act of putting your chosen business name on your registration paperwork automatically adds the moniker “Founder” to your high list of accomplishments. This is a big deal!

Professionals think and work differently. Think you can’t make a living as a dog walker? Try going pro at it and see how easy it can be. The professional looks for opportunities and is excited to work and learn and be fairly compensated for their time and effort. Starting an LLC can lead to a sudden realization that the future you only daydream about can be a tangible possibility. Everything changes from there.

Work/Life Separation
You can achieve this professional mindset without actually forming an LLC, but there are risks for those who so closely intertwine their life and their work. When you become what you do, when you act like a professional 24/7, you risk blurring the line between work and play. Not only is this mentally and physically exhausting, but it can also lead to burnout and a loss of passion for your projects. Starting a formal business allows for a distinct line to be drawn between work life and home life.

I embraced my work, and I named myself Jeanette the Writer, LLC. When I sit down to work each day, I am working as Jeanette, the writer. But when I close my computer and get up from my desk, I abandon that persona and become Jeanette, the everything else. This is the “Me” that gets to do dishes and run errands and have fun with my friends. This is not the “Me” that needs to return that work email that just popped up at 9:00 pm. That Jeanette is off the clock.

When you start an LLC, you are the owner of that business. Like any employee, an owner shows up for work and leaves at the end of the day. Whether you physically or mentally clock yourself in and out of work, having a formal business to clock in and out of is the important part. Starting a company and making it real can create a line between You, the entrepreneur and You, the everything else.

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Sure, there are plenty of legal and financial reasons that make forming an LLC the right thing to do for your company. But the mental benefits of forming a company are another important aspect to consider. If forming an LLC is the kick in the pants you need to become a professional, then it’s definitely the right move for you.