Financially Inclined March 14, 2025 Transcript

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Yanely Espinal: What’s up, everybody? I’m Yanely Espinal, and this is Financially Inclined from Marketplace. We’re sharing money lessons for living life your own way.

Today, we’re diving into how to start your own business. Now, there’s a lot of great things about being an entrepreneur. Like, I get to set my own schedule, so last year I took off a whole month for my birthday. And I also get to focus on projects that I’m actually passionate about instead of just doing tasks that my boss told me to do. But what do you actually need to do to get your business up and running? 

Today, I’m talking with attorney-turned-entrepreneur, Sam Vander Wielen about the steps that you need to take to set up a legit business and protect yourself as a business owner. Sam uses her law experience to help online entrepreneurs open and grow their businesses, and she’s gone through the process herself with her own business. She even wrote a book about this experience, “When I Start My Business, I’ll Be Happy: A Practical Guide to Successful Online Entrepreneurship.” So you know she has plenty of expert advice to share. All right, let’s get into it.

Espinal: Okay, Sam, I think you probably agree with me on this, but I feel like Gen Z is probably one of the more entrepreneurial generations, right? Like there’s so much they’re achieving, they want to be their own boss, and you work with a lot of entrepreneurs to help them get like legal structures and get the advice that they need to get set up. Why do you feel like this is, like, really important? 

Sam Vander Wielen: It is so important for you to get yourself legally protected because I want you to think of this as, like, a holistic approach, a very well rounded approach. That’s what I like to tell people. So at the forefront, we want to be thinking about protecting you as a person, like from legal liability. We want to protect you. We want to protect your money. And I especially want you to protect your boundaries. 

Espinal: Talk about the yourself piece. Why do you feel like it’s so important for them to focus on protecting themselves? 

Vander Wielen: So basically you don’t want to be responsible for what happens in your business because you can’t control it. Right? Stuff happens in business. People don’t pay you. People sue you. They say something happened. We, ultimately at the end of the day, we just want to make sure that you’re not personally responsible for what happens as a result of your business. So the way that I like to visualize this is as if you were trying to build a wall between you and your business so that, like, what happens in your business has to stay on the other side of that wall, and you’re, like, safe and protected on the other side of the wall. That’s the way I think of it. So the way that we do that is by registering our businesses. There are these different kinds of things called business entities. All that is a fancy term for different types of business structures. Each one has different limitations, rights, responsibilities, and definitely different pros and cons. The main ones that people tend to choose between to start out are sole proprietorships and an LLC, which stands for limited liability company. Sole proprietorship is very easy to start. It tends to be a little cheaper, a tiny bit faster in the sense that maybe your state doesn’t even require registration. The huge, huge, huge con though to a sole proprietorship is that it offers you as a business owner absolutely zero personal liability protection. So remember I said in the beginning, we want to form our businesses as a means to protect ourselves from the actions of our businesses. When you get a sole proprietorship, you get none of that. None of that’s included. LLCs were essentially created as an alternative to sole proprietorships where the state said, Hey, we want to offer like an easy way to form a business, nothing too fancy or complicated. It’s not like a corporation, which is a little fancier, a little more complicated. So the big, big pro to an LLC is that it does offer you some of that separation, some of that insulation from what happens in your business. Um, I would say that the con is that it’s a little bit more expensive than a sole proprietorship, but that pro, it really does it for me over the, over the sole prop. 

Espinal: Yeah. I mean, it makes sense. Like I guess an example would be you’re running your business – in one case it’s a sole proprietorship, in another case, it’s an LLC – I decide that I’m unhappy, uh, I want to sue your business. If your business is a sole proprietorship and I sue you, what does that look like, versus if your business is an LLC structure and I sue you? 

Vander Wielen: Yeah, great question. So if you have a sole proprietorship and you get sued, you are personally financially on the hook for that lawsuit. That means it’s the same thing, it’s no different than if you had just sued me as a person outright, right? So it’s no good. On the flip side, if you have an LLC and something happens in your business, like somebody’s upset, you did something in your business and they sue you. The idea is that only your business is financially responsible for what happens as a result of that lawsuit, but they can’t come after you, your house, your bank account, any, your car, your, any other personal assets that you have. 

Espinal: And that’s huge. 

Vander Wielen: Yeah, very. 

Espinal: You mentioned there’s different types of protection. We talked about personal protection, so let’s move on to the financial protection piece. You’re starting your business, you want to be financially savvy and do your business right the legit way. What are the key financial steps that you have to take to set up your business right? 

Vander Wielen: Yeah, sure. So the EIN number, the employer identification number, it’s free. Takes about five minutes to fill out. It’s like a business’s social security number. That’s how I like to think of it. And then you can take that EIN number from the IRS. That’s what you would use to set up your business bank account at the bank. So this is a bank account that should be designated as a business bank account. And the government has to be able to go in and see that you have clean transactions. You have business money coming in and out, only business stuff, not mixed with your Target run and all that kind of stuff. So it’s just a clean separate account. I then usually have people set it up so that you connect it to like a payment gateway. So still again, always acting like a business. If we go and get a PayPal account or a Stripe account, you set up a PayPal business account or a Stripe business account, whatever you want to use, um, and you connect that to your business bank account that you’ve gone and set up. 

Espinal: Yup.

Vander Wielen: The final financial piece that I want you to consider is business insurance. And business insurance is huge because, you know, we talked about kind of in step one about how we want to personally insulate you so that you’re not personally responsible for what happens in your business, but your business is, but you don’t really want your business to be financially responsible for a lawsuit either, because that’s going to be really expensive. And it could sink a business. 

Espinal: Yeah. 

Vander Wielen: So business insurance provides you with a lawyer, a defense lawyer, if something happened. So if you got sued, you have to send that paperwork over to your insurance company. They get you a lawyer, they pay the lawyer’s hourly fees, which I can tell you are super high.

Espinal: Yes! So expensive!

Vander Wielen: And then they go and pay that. And then they also would pay for any settlement or judgment that was found against your business if, as long as the thing you got sued for was covered by your insurance. So that is huge. 

Espinal: Yep, I love that. Okay, so now the next one that you mentioned was boundaries, right? When I think about boundaries, I think about like, when I tell my little nieces and nephews, like, “If you don’t want somebody to hug you, you don’t have to hug them.” That’s what I think of. But like, we’re talking about business. So what do you mean by business boundaries to protect yourself in business? 

Vander Wielen: Yeah. So one of the, I think the biggest hidden costs of running an online business or running a business in general is that time is money, right? And the more time that you are spending, you’re going back and forth and emailing with your customer and that is wasted money. You’re just throwing money out the window, let alone the actual refund that you’re giving back that you, the person might not be owed, right? So I think that having clear policies, having clear contracts, you know, at checkout, if you’re selling products or digital products, um, and contracts for any services that you’re offering, that’s going to prevent you from having to go down all these like offshoots of like, “Oh, should I, shouldn’t I? Well, what do I do about this situation?” No, it’s clear, cut and dry, and it’s going to make your life a lot easier if you have legit contracts in place. You can just say, “Hey, sorry, here’s the policy. This is what you agreed to when you purchased.” And that’s that. 

Espinal: Yeah. A lot of times you might need help for your business. Do you feel like this is a good tip? Like you should hire a CPA or you should work with somebody or what are some other resources or tips for somebody who’s thinking about all these steps they have to take and maybe are a little bit overwhelmed. 

Vander Wielen: Yeah, for sure. I totally get why people are overwhelmed. And I also like, I just want to encourage you that part of why you’re overwhelmed is like, because people don’t understand how this works, it’s one of those things that we build up to be a lot bigger and harder than it really is. So I truly believe that most people can register their own businesses. You can buy your own domain, get the setup. You can go in and get your business bank account. Like it is really straightforward. I do believe that. Um, and so hopefully we’ve debunked a little bit of that myth. In a lot of states, we have small business associations. We have women’s business associations. We have minority business associations. There are groups for any of you who are in college or have graduated from college, there are sometimes alumni or college groups associated with entrepreneurship that you can go to. And hot tip, you can call – whatever your county is, you can Google like your county’s name “bar association” and call them or email them. They should have some references for you for some small business attorneys who help out with different community-oriented projects, so there might be something like that available too. 

Espinal: Got it. You have shared so many tips and so many gems here. What would be your top tips for opening a brand new business? 

Vander Wielen: I would get an EIN number, register your business, get a business bank account, try to get business insurance, and get a contract in place for whatever you’re selling.

Espinal: Sam shared a lot of great tips with us, but also some new words that you might not have heard before. So here are some vocabulary words for today’s episode. Liability: This is the risk of being legally or financially responsible for causing damage or harm. LLC: This means Limited Liability Company. It’s a business structure that protects the owners from personal liability. Sole Proprietorship: This is a business structure that’s owned and run by one person who is not protected from personal liability. EIN: This is employer identification number, which is a unique number that identifies your company so that the IRS knows for tax purposes. So it’s like a social security number for the business. Commingling: This means that you mix or combine your personal money with your business’s money.

Espinal: For our Learn More segment in today’s episode we’re going to talk to a young business owner so that way you can see how Sam’s advice gets applied in the real world. And also you’ll get to hear from somebody who’s already walking the walk. I want you to meet Leslie Zuñiga, a 21-year-old entrepreneur from Durham, North Carolina. A few years ago she opened her own nail studio called The Nail Fairy. Now, she’s built up a big presence on social media where she shares her nail art and connects with her loyal customers. 

Espinal: Okay, so Leslie, let’s start off with the basics. What were some of the steps that you had to take to really create your business in a legit way? 

Leslie Zuñiga: I opened my business up in 2021, and the first step was making an LLC, but obviously before that, doing my research and being like, well, how am I gonna sort out my money? How am I gonna sustain this business? Because really, it’s a fun idea. It’s exciting to be like, I’m gonna be my own boss. But in reality, it’s like, yeah, that comes with a lot of responsibilities and realizing how am I gonna take care of myself, take care of the business? I think that was the first step. 

Espinal: I love that. Okay, so tell us what are the like top key lessons that you learned from this experience of launching your own business and especially because you started so young as a younger teenager. 

Zuñiga: Definitely patience! And that’s something I’m still having to learn every day, and I guess that’s also part of like the starting off of the business is having to think about, yeah you’re gonna have to invest some money. Like you’re gonna have to just not pay yourself for a while. 

Espinal: Oh yeah.

Zuñiga: But essentially it’s gonna come back to you and keeping that in mind that you’re watering a plant that maybe one day will give you some oranges or something. So yeah!

Espinal: Yeah, definitely. You’re not gonna get the oranges the next day after you water your plant, like your seeds. It’s a commitment and an investment that takes time. 

Zuñiga: I know. Social media can be a really helpful tool. I think in-person networking is really important too. I think that’s kind of what also got me inspired to do anything in the first place was meeting these like business owners or other entrepreneurs who were actually doing it. 

Espinal: Definitely. And just to be motivated to do something because you see other people have achieved it. So you know it’s possible.

Zuñiga: I think that’s also one thing for any young business owners is also, like, be gentle with yourselves because I think there were so many times where I was not gentle with myself and burnt myself out. And even now as an adult I’m like, “What’s happening!” 

Espinal: Yep it’s all about balance. 

Zuñiga: It’s really easy to get caught up in this like hustle culture idea because that’s what it’s being sold most of the time. And like I, in a way yes, like you gotta put the time, the effort, like you have to sacrifice, but also like do something that you feel passionate about because again that time is so valuable. And we are like so valuable just as people that like our energy, like where we put that energy really does matter. 

Espinal: Yeah I love that. Thank you so much, Leslie.  

Zuñiga: Thank you! 

Espinal: You’re like, wise beyond your years, girl!

Espinal: Okay, thanks for listening to today’s episode with Sam Vander Wielen and Leslie Zuñiga on entrepreneurship essentials. I hope that this provides you with some useful guidance that you can use to get going with your own business plans, whether you’re mowing lawns, walking dogs, babysitting, tutoring, or selling homemade soaps. And if you have any questions for us, or if you wanna share your own story, our email is financiallyinclined@marketplace.org. I know you got this.

Financially Inclined is brought to you by Marketplace from American Public Media, in collaboration with Next Gen Personal Finance. I’m your host, Yanely Espinal. Our Senior Producer is Zoë Saunders. Our Video Editor is Francesca Manto, and our Graphics Artist is Mallory Brangan. The podcast was edited by Katie Reuther. Gary O’Keefe is our Sound engineer. Bridget Bodnar is the Director of Podcasts. Francesca Levy is the Executive Director. Neal Scarbrough is the VP & General Manager of Marketplace. Our theme music is by Wonderly.

Financially Inclined is funded in part by the Sy Syms Foundation, partnering with organizations and people working for a better and more just future since 1985. And special thanks to the Ranzetta Family Charitable Fund and Next Gen Personal Finance for continuing to support Marketplace in its work to make younger audiences smarter about the economy.