Should I Start an LLC for My Sandblasting Business?

Starting a limited liability company (LLC) for your sandblasting 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 sandblasting business, lawsuits can arise from things like health conditions suffered by employees after being continually exposed to hazardous materials without adequate protective equipment.

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

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

Do I Need an LLC for a Sandblasting 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 Sandblasting Business

By starting an LLC for your sandblasting 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.

Sandblasting businesses will benefit from liability protection because of the risk of being sued for property damage and personal injuries.

Example 1: A sandblasting company is hired to remove graffiti from a customer’s garage. During the process, some of the sandblasting material splatters onto the customer’s car, causing damage, and the customer sues the business as a result. If the business is found to be liable, limited liability will safeguard the owner’s personal assets from the lawsuit.

Example 2: A sandblasting company is contracted to remove paint from the hull of a boat. During the job, one of the employees accidentally damages the boat's fiberglass. The boat owner then sues the business for the cost of repairing the damage. Regardless of a court’s ruling, limited liability protection will ensure that only the business’s assets will be used to cover any compensation if found liable.

Example 3: An employee goes blind after years of handling hazardous materials without proper protective equipment. The employee then sues the company for their loss of sight. If the company is found to be liable, limited liability protection will ensure that only the company's assets are used to cover any damages awarded in the lawsuit.

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 Sandblasting 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 sandblasting 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

Sandblasting 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.

A sandblasting business can benefit from insurance by having coverage for damages or injuries that may occur on the job or to the equipment being used.

Common Situations Business Insurance May Cover for a Sandblasting Business

Example 1: A client is walking into your office from the parking lot when he trips over some loose pavement and breaks his ankle. He decides to sue your business. Your general liability insurance policy will cover your legal defense costs, including the cost of hiring a lawyer and paying any required settlement.

Example 2: One of your employees is demonstrating the sandblasting process to an investor when he knocks her to the ground. She breaks her wrist and asks that your company pay for her medical treatment. Your general liability insurance policy will likely cover the cost of treatment if you file a claim with your insurer.

Example 3: A competing sandblasting business has filed a lawsuit against your business for libel. You do not believe that you have libeled them, but you do know that you need a lawyer right away. The general liability insurance policy you have covers legal fees for defending your business against libel claims. It will pay for your lawyer, and if you need to settle the lawsuit, it will pay for the settlement as well.

Other Types of Coverage Sandblasting 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 sandblasting businesses should obtain:

Workers’ Compensation Insurance

As an employer, you are likely required by state law to carry workers’ compensation coverage. Your coverage will ensure that your employees can get medical treatment for work-related injuries. If they get hurt on the job, they can rely on the policy to pay for their medical care. If they cannot work for a time due to their injuries, the policy will help to cover their lost wages.

Commercial Property Insurance

You have invested a significant amount of capital in your sandblasting business. You have purchased equipment, tools, supplies, and real estate to establish your company. If you were to lose most or all your property in an unexpected event like a fire, it would be difficult to get replacements so you could get back to doing business. But if you have a commercial property policy, you can file a claim with your insurer to get the money you need for purchasing new property.

Professional Liability Insurance

You are careful to sandblast to the exact specifications of your clients' requests. Yet, there is always the possibility that you could make a mistake — or face accusations of making a mistake—and have a customer sue you over that mistake. You can tailor a professional liability insurance policy for your business to ensure you have coverage if someone sues you. Your policy will pay for your legal defense costs in such a situation.

Commercial Umbrella Insurance

A commercial umbrella insurance policy can be useful if you exceed the limits of your general liability insurance policy. While it does not happen often, certain circumstances can lead to significant damages—like if you lose a big lawsuit. An umbrella policy will kick in when the general liability insurance policy stops paying. It will help you avoid needing to pay the damages out of pocket.

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 and commercial auto insurance.

Read our Sandblasting Business Insurance article for more info.

Starting a sandblasting business can cost between $2,000 and $10,000. These funds go towards purchasing a sandblaster rig, abrasive material, air compressor, abrasive hose, protective gear, reclaiming system, and safety equipment. Mobile businesses will also need a vehicle and trailer.

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

The ongoing expenses of running a sandblasting business include materials, equipment maintenance, insurance, and marketing.

Learn more about running a sandblasting business.

Sandblasting businesses make money by charging customers a fee for sandblasting services.

Learn more about starting a sandblasting business.

Sandblasting is used to quickly remove paint, rust, and residue on various types of materials. Sandblasting businesses serve a wide range of industries, such as the automobile industry and the construction industry.

Sandblasting can bring in significant revenue, with sandblasters charging between $30 and $60 per hour for their services.

Learn more about starting a sandblasting business.