I’ve written guides on how I structured my prior LLCs. This is my latest version with the services and structure I use and recommend for Skeptical Labs, LLC. This is not advice. Structure your business to fit your needs.

Background

I’ve started Skeptical Labs, LLC as a continuation of the spirit of Skeptical Consulting, LLC. I seek to:

Solve the most interesting problems For the best clients With the most talented people To live the lives we choose All the time

— Skeptical Consulting’s Purpose

To meet these goals, I enter into consulting contracts with clients. Since Skeptical Consulting LLC has closed, I have worked ad hoc as a sole proprietor. I’ve reached a point that I’d like to formally separate my work from me as an individual.

From founding, selling, and dissolving Skeptical Consulting, LLC, I have learned:

  • Starting and maintaining an LLC is relatively inexpensive ($50 - $500 per year)
  • Changing from a Solo LLC to an LLC with employees or reverting back from an S Corp is far more annoying and difficult than starting a separate LLC.
  • I have a permanent need for an LLC that can handle miscellaneous and unpredictable income from $0 - $100,000 per year.
  • If I intend to have a company with employees, S Corp election, and other complications, I should just start another LLC separate from my permanent LLC.

Skeptical Labs, LLC will be my permanent LLC for miscellaneous income. If I reach a point where I am generating enough income to justify an S Corp election, I will found a separate company, migrate applicable work to that company, and keep Skeptical Labs as the permanent LLC.

Goals

I need a permanent, single member LLC to perform these functions:

  1. Protect personal income by separating personal and business assets and data
  2. Serve as a general purpose business structure until I find a reason to run a separate business. The threshold for founding another business will be $100,000 per year in renewing revenue.
  3. Operate as inexpensively and efficiently as possible to allow for years with little or no side income
  4. Maintain a Solo 401k in perpetuity

Operating Principles and Rules

To meet the goals, the company shall abide by the following principles and rules.

Principle 1: Protect Personal Assets First

  1. Skeptical Labs may not take actions that risk personal assets in favor of business assets. This means:
    1. Use a registered agent for filings and public information.
    2. Separate personal vs. business assets (financial accounts, document storage, etc.)
  2. Skeptical Labs must operate with minimum required permits, insurance, and other requirements.

Principle 2: Optimize for Permanent Operation

  1. Skeptical Labs shall operate as if it will continue to run for 30 - 40 years.
  2. Skeptical Labs shall be organized simply and inexpensively through a small number of stable and reliable vendors:
    1. Registered Agent (Northwest Registered Agent): Annual filings, maintain privacy.
    2. Email Service (Protonmail): Free through personal paid plan
    3. Office Suite (LibreOffice & Google Workspace Free Account): Document storage, sharing, etc.
    4. Website (Namecheap, Github Pages, Hugo, Cloudflare DNS): Basic website and contact information
    5. Primary Bank (Mercury): Checking account, invoices, wire transfers (international and domestic), debit cards
    6. Secondary Bank (Fidelity): Competitive money market rate for cash holdings. Backup account.
    7. Solo 401k (Fidelity): Reduce taxes, save for retirement, allow for backdoor Roth IRA contributions in perpetuity.
    8. Accounting (Spreadsheet with upgrade to Quickbooks Simple Start when needed): Track expenses and income.
  3. Skeptical Labs shall not file as an S Corp. If the business is successful enough, I will create a separate LLC and migrate applicable contracts to that LLC.

Principle 3: Keep It Simple (KISS)

  1. No more than 80% billable hours (32 hours per week). Reserve 20% of time for business development.
  2. Use vendors for their assigned roles. Even if it is slower and more expensive, the business will be more stable, reliable, and consistent.
  3. Use simple and reliable contract structures, such as flat fee or hourly contracts.
  4. Make invoices and payments easy and fast. Net 15 - 30 day terms. Accept credit card payments.
  5. No employees. Skeptical Labs shall never have employees and will forever remain a single member LLC.

I want to avoid overcomplicated structures and costs that slowed down Skeptical Consulting. I believe this structure is simple, lightweight, easy to maintain, and easy to upgrade if and when it is necessary. When I find a compelling business model, I’ll form a new company.