Should I Start an LLC for My Public Speaking Instruction Business?

Starting a limited liability company (LLC) for your public speaking instruction business can provide several benefits.

Most importantly, an LLC structure offers limited liability to its owners, which can protect their personal assets from lawsuits and creditors.

For a public speaking instruction business, lawsuits can arise from things like claims of libel from your competitors or accusations of false advertising from your clients (e.g., regarding an employee’s instruction quality, etc.).

LLCs are also affordable, highly flexible (from a tax point-of-view), and can make your public speaking instruction business seem more credible.

Recommended: Use Northwest to form an LLC for $29 (plus state fees).

A person giving a speech in front of an audience

Do I Need an LLC for a Public Speaking Instruction Business?

LLCs are a simple and inexpensive way to protect your personal assets and save money on taxes.

You should start an LLC when there's any risk involved in your business and/or when your business could benefit from tax options and increased credibility.

LLC Benefits for a Public Speaking Instruction Business

By starting an LLC for your public speaking instruction business, you can:

Protect your savings, car, and house with limited liability protection
Have more tax benefits and options
Increase your business’s credibility

Limited Liability Protection

LLCs provide limited liability protection. This means your personal assets (e.g., car, house, bank account) are protected in the event your business is sued or if it defaults on a debt.

Public speaking instruction businesses will benefit from liability protection because of the risk of trademark infringement, financial data breaches, and even general workplace injuries.

Example 1: As part of the marketing campaign for your public speaking instruction business, your company claims they are able to convert any customer into a confident public speaker. Unfortunately, one customer still suffers serious stage fright after your course, and so sues your business for misrepresentation, alleging that if he had known the course might not work, he wouldn’t have bought it. Limited liability protects you from being held personally liable for this.

Example 2: In the middle of one of your public speaking classes, a customer suffers a serious fall after a floorboard on the stage breaks beneath them. This encouraged the customer to bring a bodily harm lawsuit against your business. However, any liability imposed on your business to pay the customer compensation is limited entirely to the value of your business’s assets.

Example 3: After firing an employee, you receive notice that this individual is suing your company for wrongful dismissal, maintaining that they had been dismissed in a manner that went against their contract. In this instance, your personal assets are safe from any liability levied against your business to pay damages to the plaintiff.

An LLC will also protect your personal assets in the event of commercial bankruptcy or loan default.

To maintain your LLC's limited liability protection, you must maintain your LLC's corporate veil.

LLC Tax Benefits and Options for a Public Speaking Instruction Business

LLCs, by default, are taxed as a pass-through entity, just like a sole proprietorship or partnership. This means that the business's net income passes through to the owner's individual tax return.

The business’s net income is then subject to income taxes (based on the owner's tax bracket) and self-employment taxes.

Sole proprietorships and partnerships are taxed in a similar way to LLCs, but they do not offer limited liability protection or other tax options.

S Corp Option for LLCs

An S corporation (S corp) is an IRS tax status that an LLC can elect. S corp status allows business owners to be treated as employees of the business (for tax purposes).

S corp tax status can reduce self-employment taxes and will allow business owners to contribute pre-tax dollars to 401k or health insurance premiums.

The S corp status requires that the business pay the employee-owner(s) a reasonable salary for the work they perform.

In addition, the business might need to spend more on accounting, bookkeeping, and payroll services. To offset these costs, you'd need to be saving about $2,000 a year on taxes.

We estimate that if a public speaking instruction business owner can pay themselves a reasonable salary and at least $10,000 in distributions each year, they could benefit from S corp status.

You can start an S corp when you form your LLC. Our How to Start an S Corp guide will lead you through the process.

Credibility and Consumer Trust

Public speaking instruction businesses rely on consumer trust. Credibility plays a key role in creating and maintaining any business.

Businesses gain consumer trust simply by forming an LLC.

A growing business can also benefit from the credibility of an LLC when applying for small business loans, grants, and credit.

Northwest will start an LLC for you for just $29 (plus state fees).

Get Started

How to Form an LLC

Forming an LLC is easy. There are two options for forming your LLC:

You can hire a professional LLC formation service to set up your LLC for a small fee
Or, you can choose your state from the list below to start an LLC yourself

Select Your State

For most new business owners, the best state to form an LLC in is the state where you live and where you plan to conduct your business.

Do LLCs Need Insurance?

All businesses need insurance to protect their business assets — even LLCs. This is because the limited liability protection from an LLC protects your personal assets, not your business assets.

Clients come to public speaking instruction businesses looking for guidance and advice, meaning there is a risk of professional liability in addition to any general business mishaps that could put your business’s assets at risk.

Common Situations Business Insurance May Cover for a Public Speaking Instruction Business

Example 1: During a coaching session at your place of business, a client slips on some wet tiles in the restroom, breaks an arm in the resulting fall, and sues your business for not marking the floor. General liability insurance would pay for your legal defense and any required settlement.

Example 2: A competitor files a libel lawsuit against your business. While you disagree with the accusation, you know you need a lawyer to defend your interests. General liability insurance would cover your legal defense costs and any required settlement.

Example 3: As you read a document while walking around a corner in your building, you fail to see a client and run directly into her. She breaks a wrist in the resulting fall and asks you to pay for her medical treatment. General liability insurance would cover her medical expenses.

Other Types of Coverage Public Speaking Instruction Businesses Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all public speaking instruction businesses should obtain.

Professional Liability Insurance

While you strive to help your clients get the best results from public speaking, there’s always a chance someone might decide you made a mistake that caused them harm. If a client sues your business for negligence, professional liability insurance would cover your legal fees and any required settlement.

Commercial Property Insurance

You made a major investment in the equipment, supplies, furnishings, and real estate needed to run your public speaking instruction business. In the event of a fire, theft, or natural disaster, commercial property insurance would cover the cost of repairing or replacing your business-related property. This includes structural damage to your building as well as the business materials stored there.

Workers’ Compensation Insurance

If you have any employees, most states will require you to carry workers’ compensation insurance for your part-time and full-time workers. This coverage protects your employees if they become injured at work or fall ill after a work-related accident. It not only covers an employee’s medical bills and lost wages if they need time to recover but also any disability or death benefits stemming from a workplace accident.

Commercial Umbrella Insurance

While your general liability insurance policy covers most claims, some accidents or lawsuits may be so catastrophic that they threaten to exhaust the limits of your primary coverage. Commercial umbrella insurance protects you from paying out-of-pocket for any legal fees and awarded damages that exceed your primary policy.

Should I Start an LLC FAQ

Choosing the right business structure depends on your business’s unique circumstances and needs. However, unless your business is very low risk (like a hobby), an LLC is likely the better option.

Visit our LLC vs. Sole Proprietorship guide to learn more.

At a minimum, you’ll need general liability insurance.

Read our Public Speaking Instruction Business Insurance article for more info.

Since your public speaking instruction can be run entirely from home, the associated startup cost can be as low as $3,000. Around $500 should be allocated to designing your business’s website, and the remainder should be spent on radio and newspaper advertising.

Visit our How to Start a Public Speaking Instruction Business guide to learn more about the costs of starting and maintaining this business.

Operating expenses for a public speaking instruction business are minimal if you operate out of your home. Expenses include fuel and travel costs as well as advertising expenses.

Learn more about running a public speaking instruction business.

Public speaking instruction businesses make money by charging customers for lessons. These can be both group and individual classes.

Learn more about starting a public speaking instruction business.

A public speaking instruction business helps people gain the skills and confidence to speak in front of a small group or crowd. With a large potential customer base and the low startup costs involved, public speaking instruction businesses have great profit potential.

Profit for a public speaking instruction business may start off slow as it builds its client base, but profits over $100,000 are possible.

Learn more about starting a public speaking instruction business.