What are the ongoing expenses of running a survey business?

Ongoing expenses for a survey business can include: Independent market research Website/advertising costs Administrative equipment/maintenance Employee salaries Office space (if applicable) Learn more about running a survey business.

Should I Start an LLC for My Survey Business?

Starting a limited liability company (LLC) for your survey 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 survey business, lawsuits can arise from things like the public release of a customer’s sensitive information following a data breach or a failure to deliver the data from a survey to a customer by the date agreed in the contract.

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

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

Do I Need an LLC for a Survey 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 Survey Business

By starting an LLC for your survey 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.

Survey businesses will benefit from liability protection because of the risk of being sued for negligence, libel, and data breaches.

Example 1: After a devastating hack, the sensitive and personal information of respondents collected by your survey business is made publicly available. As a result, a number of these affected individuals agree to file a data breach lawsuit against your business. In this example, any obligation the court imposes on your business to pay damages is limited in its entirety to the assets belonging to your business.

Example 2: A company hired your business to collect data about its customers. In your agreement, it is stated that this data will be delivered by a specified date. However, your business is unable to do so, which prompts the company to sue you for breaching this contract. In the ensuing litigation, limited liability precludes your personal assets from being pursued by the court to satisfy any business obligation to pay compensation.

Example 3: One of your employees creates a logo for your company that is uncannily similar to that of a very popular online brand, who quickly realizes this and files a copyright infringement lawsuit against your business for using their property without permission. Limited liability ensures that the court cannot hold you personally responsible for this infringement.

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 Survey 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 survey 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

Survey 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.

Insurance is particularly important for survey businesses because of the peace of mind that it provides. By creating a buffer between a business’s assets and liabilities, the business is free to operate without the worry of its assets being threatened by numerous risks (e.g., data breaches, etc.).

Common Situations Business Insurance May Cover for a Survey Business

Example 1: A potential new client comes to your office to discuss an upcoming project. While there, he trips over a computer cord and injures himself. Your company is being named in a lawsuit, asking for payment for damages and pain and suffering. Your general liability insurance would cover your legal costs and any damages paid out in the suit.

Example 2: While on the job, your employee accidentally drops a piece of equipment in the road. Someone runs over the equipment, causing major damage to their vehicle. Your general liability policy would cover the repairs to their vehicle and any personal injuries stemming from the accident.

Example 3: Your new brochures include a photo that is protected under copyright law. The photo owner is suing for copyright infringement. General liability insurance will help pay litigation expenses and any judgments against you up to the limits of the policy.

Other Types of Coverage Survey 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 survey businesses should obtain.

Professional Liability Insurance

If a customer feels they have been harmed in any way as a result of your actions or services, they can sue the company for damages. Professional liability insurance will cover negligence claims, whether it be due to a mistake or failure to perform.

Commercial Auto Insurance

Your work requires ownership and operation of a fleet of vehicles. Because a personal auto policy does not apply in this instance, a commercial auto policy is necessary. In the event of an accident, the policy would cover the cost to repair your vehicle, as well as any liability claims that may arise.

While the state mandates the minimum amount of coverage required, this is often not enough to cover a major accident. Therefore, business owners are encouraged to consider professional and personal assets and purchase limits that ensure no coverage gaps.

Commercial Property Insurance

If your business-owned building is damaged, repairs could become quite costly. A commercial property insurance policy pays to repair or replace damaged property, as well as the contents stored on-site. Business owners should discuss their needs with an insurance professional, as coverage may not apply to equipment damaged or stolen off-site without the proper endorsement.

Workers’ Compensation Insurance

Workers' compensation coverage, required by every state in the United States, offers payment for medical bills when an injury occurs while on the job. Additionally, the policy covers your employees’ lost wages and assists with fees associated with a related lawsuit.

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 professional liability insurance.

Read our Business Insurance article for more info.

If you’re thinking about starting a survey business, the startup costs are extremely minimal. With a small advertising budget, a computer, and some Wi-Fi, you can easily get started from home. For those on a budget, large amounts can be saved through the use of services such as Survey Monkey.

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

Ongoing expenses for a survey business can include:

Independent market research
Website/advertising costs
Administrative equipment/maintenance
Employee salaries
Office space (if applicable)

Learn more about running a survey business.

Survey businesses charge for designing, distributing, and analyzing surveys based on their size and complexity.

Learn more about starting a survey business.

A survey company creates, distributes, and analyzes the results of surveys for companies, nonprofit groups, and other organizations. Surveys can be either simple or complex, and they can focus on a specific niche or a broader variety of subjects.

Profits depend on client volume and your business’s reputation for getting good results.

Learn more about starting a survey business.