--- name: side-business-setup description: "Set up a side business in the right order — the do-first sequence (separate money, basic terms, simple records) vs. the feels-official-but-waits list (logos, LLCs-by-default, office chairs), with the structure question framed honestly and routed properly. Use when asked I'm starting a side business what do I need, do I need an LLC, set up my side hustle properly, or what comes first legally and financially. Produces the ordered setup sequence, the structure-decision framing (jurisdiction-flagged, professional-routed), the money-hygiene rules, and the employer-conflict check most people skip." --- # Side Business Setup Skill New side businesses fail setup in both directions: six weeks on a logo and an LLC for a business with zero customers, or a year of real revenue flowing through a personal checking account with no records, no terms, and a possibly-violated employment contract. The right order is boring and short: check the employer conflict *first*, separate the money *immediately*, get paid under simple written terms, keep records from dollar one — and let the structure question (sole proprietor vs. LLC vs. local equivalents) be decided when the facts justify it, with a professional, because it's jurisdiction- and situation-specific. ## What This Skill Produces - **The ordered sequence** — what happens this week, this month, and at the first real milestone — with the wait-list labeled as such - **The employer-conflict check** — the contract clauses to reread before anything else (IP assignment, moonlighting, non-compete) - **The money-hygiene rules** — separation, records, and the tax-setaside habit, from the first dollar - **The structure framing** — what the sole-prop-vs-entity choice actually trades, when it becomes worth deciding, and the route to local professional advice ## Required Inputs Ask for these if not provided: - **The business, concretely** — selling what, to whom, revenue so far or expected; liability texture matters (advice and physical products carry different risk than selling prints) - **The employment situation** — employed? The contract's IP-assignment and moonlighting clauses are the first read (using employer equipment or work hours for the side business is the classic self-inflicted disaster — asked directly) - **Jurisdiction, loosely** — registration, tax, and entity rules are deeply local; every such step gets typed and verify-locally flagged - **What's been done already** — revenue flowing? Then money-separation is behind schedule and jumps the queue ## Framework: The Order Rules 1. **The employer check is step zero:** reread (or obtain) the employment contract for IP assignment ("inventions made during employment" clauses vary hugely in scope), moonlighting policies, and non-competes; never build on employer time or equipment. Conflicts found → resolve *before* investing more (sometimes a simple disclosure/waiver; sometimes a lawyer question — routed, not guessed). 2. **Separate the money before the second sale:** a dedicated bank account (a plain second account works before any entity exists) — commingling makes taxes miserable, records unreliable, and (where entities exist later) undermines the liability protection people form entities *for*. This is the highest-value 30 minutes in the whole setup. 3. **Paper beats structure early:** simple written terms with every client (scope, price, payment terms — see [first-client-contract](../first-client-contract/SKILL.md)) and an invoice-and-records habit (see [quarterly-tax-rhythm](../quarterly-tax-rhythm/SKILL.md)) protect against the *common* failures; entity structure protects against rarer ones — the order follows the odds. 4. **The structure question, framed honestly:** sole proprietorship (or local equivalent) = zero setup, no liability shield, fine for many low-risk starts · an LLC/limited company = a liability shield *if formalities are kept* (separate finances — see rule 2 — contracts in the entity's name), real costs and filings, and jurisdiction-specific tax texture. Triggers that make the question ripe: meaningful liability exposure, real revenue, contracts that demand an entity, a partner joining. The decision itself: framed here, made with a local accountant/attorney — stated plainly as the skill's boundary. 5. **The wait-list is permission, not dismissal:** logo, website polish, business cards, merch, office — all legitimate *after* there's a customer; the skill names them as morale, not milestones, and nobody has to feel bad about wanting them — they just don't block the first sale. ## Output Format # Side Business Setup: [the business] ## Step Zero — The Employer Check [The clauses to reread · the equipment/hours rule · the found-a-conflict route] ## This Week [Money separation · the records file/sheet started · terms template readied] ## This Month / At First Milestone [Registration steps as locally required (typed, verify-locally) · the tax-setaside % habit · insurance question if liability texture warrants (typed, professional-routed)] ## The Structure Question [The honest trade table: sole-prop vs entity · this business's triggers, assessed · "ripe now" or "revisit at [milestone]" · route: local accountant/attorney] ## The Wait-List (with permission) [Logo, site polish, cards — after customer one] > Registration, tax, and entity rules are jurisdiction-specific — every flagged step needs local verification, and the structure decision deserves a local professional. Not legal or tax advice. ## Quality Checks - [ ] The employer-conflict check appears first, with the equipment/hours rule explicit - [ ] Money separation precedes any structure discussion - [ ] The structure trade is framed with this business's actual triggers, then routed - [ ] Every registration/tax step is typed and verify-locally flagged - [ ] The wait-list is labeled morale-not-milestones without moralizing ## Anti-Patterns - [ ] Do not default to "form an LLC" — the reflex this skill exists to slow down; triggers first, professional second - [ ] Do not let revenue flow personally past this conversation — separation jumps every queue - [ ] Do not skip the employer check because it's awkward — the IP clause doesn't care about awkward - [ ] Do not assert entity/tax specifics for any jurisdiction — frame, flag, route - [ ] Do not shame the logo enthusiasm — sequence it; joy is allowed, it's just not step one ## Example Trigger Phrases - "I'm starting a side business what do I need." - "Do I need an LLC?" - "Set up my side hustle properly." - "What comes first legally and financially?"