How to Be Self-Employed Legally

Last Updated on September 14, 2022 by EarthTechy Staff

If there’s one thing that I’ve learned in life, it’s that you are the only one who can make things happen for yourself. You have to be self-reliant and work hard to get what you want. And if you want to be successful as a self-employed person, there are a few things you need to know. In this blog post, I’ll share with you what it takes to make it as a self-employed individual and give you some tips on how to succeed. So read on and learn more!

7 Tips to Be Self-Employed Legally and What It Takes to Succeed

1. Set up an Entity (LLC)

You might wonder, how can I create an LLC for free and also create a business bank account in only a few days? Now a lot of people, including accountants and lawyers might tell you it is not possible. They will tell you that you have to pay for filing fees and also labor fees, but in reality, there are ways around all of those issues and complications. Here is how you can legally create an LLC for free and not have to pay a penny of your own money.

What Is an LLC?

To kick it all off, the acronym LLC stands for “limited liability company”. Simply put, an LLC is a literal company that you form. In this form, there is limited liability in order to protect you and your assets in case anything goes wrong while you’re doing business and you get sued. If you get sued under an LLC they can’t go after your personal assets, you can only go after the assets of the business itself. You are a lot more protected this way.

Who Should/Can Open an LLC

Anyone that’s conducting business, yes you can run the entire business through your personal taxes but this way you are more protected and can sleep better at night. Plus it’s free. To put it into perspective, say you own a company, and someone got injured on the job, well now they are suing you for 1.7m million dollars; well they can only take what the LLC actually owns and cannot come after your personal assets. It’s an extra layer of protection.

How to Create an LLC for Free

You can choose any of these methods to form an LLC:

  • Subtract the cost of forming an LLC from your taxes, everything is deductible. If your business grosses a profit, you can deduct the cost of the LLC from the business taxes, and that way you pay less in taxes. So in a way, it’s free.
  • You can use sources such as Zen Business. This company doesn’t charge you a penny to form the LLC, and the only is the State fee for your state. So the labor cost is free, and then you can just deduct it from your taxes.
  • Lastly, you can open a business account with a bonus. For example, a bank gives you $300 bucks when you open a business account and fulfill a few steps. So you can open the LLC and get the bonus to pay for it.
    Free. Yes, you can do more than one business account. As a normal w-2 employee, your employer is liable for anything that happens, and if any lawsuits happen, then it’s on them and not you however, once you are self-employed that all changes.

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2. Quit or Outsource

What I mean here is to decide whether you want to start a business or work for another company. How does it work? Not all self-employment jobs are equal. For example, some people ask their boss to make them self-employed, so they can write off expenses and have more freedom. This can be risky because then certain people can go out and start their own businesses.

The other way is to work under an already-established company. For instance, Uber and other apps alike are fundamentally self-employed jobs but already have a system established. This is a more risky way of being self-employed because you don’t control anything. Uber could be gone tomorrow, but at least you control your own business.

3. Emergency Fund

If you quit your job or lose your job while becoming self-employed, you’re going to want to have some security. A pro tip is always to keep your job until your side job makes more than your main job. Figure out your monthly expense and multiply it by 6-12. You should have that much money in a high-yield account in case anything goes wrong; you can take 6-12 months to figure it out. You always want to have an emergency fund.

Why? The reason is that this is going to be your safety net if your business goes down or if it doesn’t work out. Businesses fail all the time, and people get fired all the time, so if you lose your job, you have this money on the side to cover all of the expenses for at least six months that way you are good and stable to move forward.

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4. Finance

Should you finance or venture or start with what you have? Probably the safest way to go is no, don’t get finance until you have experience and grow the business organically and understand it. Too many people finance to start a nonprofitable business, and that can be very risky.

Banks are smart, they’ll have some documentation saying that a loan is backed by you personally as well, however, if you have a bank account and record, usually, banks will offer you loans that are only for the business. Make sure to create strong business investment plans and use data dashboards to keep track of all your finances.

5. Prepare to Fail

One of the most important things to know is that you have to prepare for one thing, and it’s something that no one likes; failure. The faster you get used to the reality of failure, the easier your entire life will be. A harsh truth is that if you get used to failing, then you’ll quickly start to succeed.

When you start your first business, you’ll probably fail, the key is to figure out why? Nearly 100% of the time when you are self-employed, it’s because of you, you can’t blame anyone, including the economy. Learning to navigate that fact and also building yourself up again after your failures will only make you better and ultimately more successful at business.

6. Manage Yourself

One of the biggest pros of a normal job is that it is very structured. Your employer tells you when to come in when to go when to eat, and what to do. It is all very organized and follows a strict routine. In reality, all this stuff mentioned here is the regular 9 to 5 structure and that’s something you do not get when you start your own business.

When you are your own boss, you make your own schedule, and usually, your schedule consists of I sleep, I sleep, I work, I sleep, I watch TV, and I sleep again. Now that is a very lazy schedule, so once you start your own business, you have to become self-responsible. When you are self-employed, you have to learn to create a structure for yourself and keep everything organized. Without that organization, your business will fall apart.

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7. Constant Growth

What happens after you win? Often the answer is people stop doing what got them there and they fail or, they keep doing the same thing, and they also fail. The final step is to stay in a locked-in attitude of a growth mentality. The key to maintaining that is to become a student of the game you choose to play, and that way you’re always 10 steps ahead.

You want to keep learning and changing things up. For example, freelance or find new ways to network for self-promotion. This way you always keep improving and you stay on the top.


Breaking away from organized and structured employment and going out on your own is not an easy thing to do. There is uncertainty, instability, and a whole lot of new adjustments to get used to and manage.

You need to start your own company, evaluate risk and reward, manage budgets, finances, and funds, and do all of this while staying on top of everything else that needs attention. Following these seven steps on how to get started and how to keep going can help give you an idea of how to do all of that and bring you one step closer to success.

Being self-employed has its challenges but there are plenty of rewards on the other side, the key is to stay motivated, stick with it, and not give up.

—-This guest post is submitted by Martina Vasconez Vaca of Lensa

EarthTechy Staff

EarthTechy Staff

EarthTechy is a trusted tech news platform that provides information, opinion, and advice on technology and helps you get the most out of it.