The Lie of “Just Start an LLC” — And Why No One Explains the Rest

If you ask ten people how to start a business, nine of them will give you the same answer:

“Just start an LLC.”

It sounds simple.

It sounds safe.

It sounds responsible.

And that’s exactly why it’s misleading.

Not because an LLC is illegal or useless—but because it has been oversimplified, overmarketed, and misunderstood to the point where most business owners think they’re building a business… when they’re really just filing paperwork.

This isn’t an anti-LLC article.

This is about what no one explains after you file one.

Why “Just Start an LLC” Became the Default Advice

The popularity of this advice has very little to do with strategy—and everything to do with convenience.

LLCs are:

• easy to register

• inexpensive to file

• fast to approve

• easy to sell at scale

Filing companies love them.

Accountants default to them.

Friends repeat it.

Social media amplifies it.

Why?

Because “just start an LLC” ends the conversation.

There’s no discussion about:

• how the business will operate

• how money should flow

• how risk is managed

• how growth is structured

• how funding is obtained

And that silence becomes expensive later.

What an LLC Actually Is (Legally and Practically)

An LLC is a legal filing, not a business system.

In most cases—especially single-member LLCs—the IRS treats the entity as a disregarded entity, meaning:

• the business does not pay federal income tax

• income flows directly to the owner’s personal return

• there is limited separation for tax purposes

• finances are often intertwined

The state may recognize the LLC—but the IRS often does not treat it as separate.

That distinction matters more than people realize.

The Real Problem Isn’t the LLC — It’s What Comes After (or Doesn’t)

Most people stop at:

• Articles of Organization

• EIN

• Business bank account

Then they’re told:

“You’re official.”

But “official” does not mean:

• protected

• scalable

• fundable

• properly structured

It simply means you exist.

And this is where the real problems begin.

Existing Does Not Mean Separate

One of the biggest misunderstandings in business is believing that having an LLC automatically creates separation.

It doesn’t.

When an LLC is treated as a disregarded entity:

• the business does not stand on its own for federal tax purposes

• the owner is personally responsible for the business income and losses

• profits and deductions appear on the owner’s personal return

So even if the LLC has its own name, EIN, and bank account, the financial identity still flows back to the individual.

On paper, the business and the person are still connected.

“But I File as an S-Corp” — Why That Doesn’t Solve the Core Issue

This is where confusion increases.

An LLC can elect to be taxed as an S-Corporation.

But that election:

• does not turn the LLC into a corporation

• does not create a new legal entity

• does not remove pass-through taxation

Both LLCs and S-Corps are pass-through structures.

That means:

• income still flows through to the owner

• the owner is still responsible for reporting it

• the owner is still tied to the financial outcome

An S-Corp election may change how income is taxed, but it does not change who ultimately carries responsibility.

That’s the part people aren’t told.

The Cause-and-Effect No One Explains

Here’s the missing link.

When business income flows onto your personal tax return, you are telling the financial system:

“This business depends on me personally.”

And the system listens.

Banks.

Credit card companies.

Lenders

Mortgage underwriters.

Financing partners.

They all reach the same conclusion:

“Since you personally take responsibility for the income, we need you to personally guarantee the risk.”

That’s why:

• business credit still requires personal credit

• loans still require personal guarantees

• funding decisions revolve around the owner

• the business never truly stands on its own

This isn’t unfair.

It’s logical.

You accepted personal financial responsibility—so institutions respond accordingly.

Why This Limits Protection, Scaling, and Funding

When income, liability, and risk all flow back to the owner:

• liability is harder to isolate

• risk is harder to contain

• funding remains personal

• growth hits a ceiling

The business cannot outgrow the individual—because it was never designed to.

This is why:

• personal debt-to-income ratios matter

• personal tax returns are reviewed

• guarantees are required

• expansion slows

Not because the owner failed.

But because the structure was incomplete.

This Is What “They Didn’t Explain” Really Means

No one explained that:

• registering a business is not the same as structuring one

• pass-through taxation ties the owner to the outcome

• disregarded entity status limits separation

• personal reporting triggers personal guarantees

So people assume the struggle is normal.

It isn’t.

It’s structural.

Why Accountants and Filing Services Don’t Teach Business Structure

This is where many business owners feel let down—often without realizing why.

Most CPAs are trained to:

• record transactions

• ensure compliance

• prepare and file returns

Their role is to report what already happened, not to design how a business should be built.

They are not trained to:

• architect business systems

• design entity frameworks

• plan separation beyond basic compliance

That’s not a criticism—it’s simply not what they were educated or licensed to do.

Filing companies operate the same way.

They are trained to:

• register entities quickly

• upsell standardized add-ons

• move high volumes of filings

They are not incentivized to:

• slow down

• teach strategy

• explain long-term consequences

• educate someone past the point of formation

Education takes time.

Strategy takes effort.

And neither scale well in a volume-based business model.

So business owners are left with:

• an LLC

• no operational infrastructure

• no understanding of true separation

• no roadmap for growth or funding

And when problems arise—when funding stalls, liability surfaces, or growth caps out—the blame quietly shifts back to the owner.

“You should’ve known.”

“You should’ve asked.”

“You should’ve done more.”

But here’s the uncomfortable truth most people won’t say out loud:

There is no money in education.

If there were, teachers wouldn’t be some of the lowest-paid professionals in the country.

Education doesn’t sell urgency.

It doesn’t create shortcuts.

It doesn’t promise speed.

It asks people to think, learn, and take responsibility.

And that reality leads directly into a moment most business owners—and even educators—rarely stop to confront.

A Moment of Perspective Most People Never See

This is where something recently clicked for me.

I logged into LegalZoom and Tailor Brands during the holiday season.

No sales.

No discounts.

No “limited-time offers.”

Just business as usual.

That alone is telling.

LegalZoom generates over $700 million per year.

Tailor Brands is estimated around $60–70 million annually.

Hundreds of millions of dollars.

Built primarily on LLCs.

With minimal education.

And no discounts—even during peak shopping seasons.

That realization was sobering.

Because while those companies focus on volume and simplicity, I am often expected to:

• educate deeply

• explain nuance

• design structure

• discount services

• share my educational background to justify value

• rush filings to meet urgency

• answer questions continuously

• remain available at all hours

And it raised an important question:

if multi-million-dollar companies aren’t teaching or promoting corporations, how are they structured themselves?

The Contrast Most Consumers Don’t Notice

Here’s the part few people stop to think about:

Those companies are corporations.

They don’t operate as single-member LLCs.

They don’t blur personal and business finances.

They don’t rely on discounts to validate value.

Their CEOs are not on social media teaching business every day.

They don’t need to.

Their model is simple:

• sell ease

• avoid depth

• scale volume

They are not teaching you how business works.

They are selling access to a filing.

And they do so confidently, consistently, and at full price.

Why Discounts Feel Normal at the Bottom

(But Rare at the Top)

This isn’t about right or wrong—it’s about maturity.

In business:

• discounts attract volume, not commitment

• education requires intentional participation

• structure requires buy-in

The most successful companies:

• don’t train customers to wait

• don’t make value negotiable

• don’t chase validation

They build systems.

They build trust.

They build consistency.

Which is why discounts disappear as businesses mature.

Registration Is Not Operation

This is one of the most misunderstood truths in business.

Registering a company does not mean you know how to operate one.

Real operation includes:

• money flow

• contracts

• liability management

• documentation

• separation between owner and entity

Most LLC owners:

• mix personal and business funds

• sign contracts personally

• use personal credit

• personally guarantee everything

At that point, the LLC is little more than a label.

Why LLCs Struggle With Growth and Funding

Lenders and underwriters don’t evaluate effort.

They evaluate:

• structure

• documentation

• consistency

• separation

Single-member LLCs often struggle because:

• owner income and business revenue are blended

• there’s no retained earnings strategy

• no governance

• no continuity

That’s why so many owners say:

“I make money, but I can’t get approved.”

It’s not hustle that’s missing.

It’s design.

The Difference Between a Business and a Business Vehicle

Many people believe they’re building a business.

In reality, they’re operating a business vehicle without understanding how it’s engineered.

A real business has:

• systems

• roles

• documentation

• continuity beyond the owner

Corporations are designed for this.

LLCs are designed for simplicity.

That difference changes everything.

Why Corporations Are Treated Differently

Corporations aren’t respected because they’re complicated.

They’re respected because they are:

• separate legal persons

• structured for continuity

• designed to hold assets, contracts, and policies

• built for growth and funding

This is why:

• banks understand them

• insurers price them differently

• underwriters trust them more

It’s not status.

It’s structure.

The Real Lie Was the Omission

The lie was never:

“An LLC is bad.”

The lie was:

“That’s all you need.”

Business owners weren’t taught:

• how businesses actually operate

• how money should move

• how separation is maintained

• how growth is structured

So when struggle shows up, they assume it’s normal.

It isn’t.

It’s structural.

Conclusion

If all it took to build a successful business was filing an LLC, everyone would be winning.

Businesses don’t fail because people don’t work hard enough.

They fail because:

• they were never structured correctly

• they were never taught the rest of the story

And that story doesn’t start with:

“Just start an LLC.”

It starts with:

“What are you building—and how should it be designed?”

But here’s the most gut-wrenching part of all.

I just told you that the companies who push LLCs the hardest—LegalZoom, Tailor Brands—are multi-million- and billion-dollar corporations.

They don’t discount.

They don’t run holiday sales.

They don’t explain business.

Yet when I look at my own website:

I see Journey to Success on sale.

Legacy Builder discounted.

LLC-to-Corporation conversions marked down.

Business startup services bundled and reduced.

And it forces me to ask myself a hard question:

What am I really doing in this space?

Why, while staring at real numbers and real data, am I still doing the opposite of what works?

Why do I feel like I owe people a discount?

Why do I feel responsible for saving everyone?

The honest answer isn’t strategic.

It’s human.

Because I care.

Because I know what it’s like to be confused.

Because I know what it’s like to struggle.

Because I know what embarrassment feels like.

Because I know what imposter syndrome is.

Because I know what it’s like to:

• second-guess every decision

• wonder if you started the business the wrong way

• feel behind while everyone else looks like they’re winning

• question whether you’re even cut out for entrepreneurship

• carry the pressure of bills, payroll, and responsibility alone

• lie awake at night replaying decisions you wish you could redo

Because I’ve seen people lose years chasing the wrong advice.

Because I’ve watched hard-working people blame themselves for structural problems.

And because helping people matters to me—not just to start a business, but to understand it.

That’s why I can say this with honesty and clarity:

I understand.

But here’s the truth I’ve had to accept—one that doesn’t feel good, but is necessary:

I don’t get a gold medal at the end of the year for helping everyone.

The IRS doesn’t send a thank-you card.

All I ever get is:

“Dewayne, you’re a good man.”

And I know a lot of good men who are no longer here.

This isn’t bitterness.

This is reality.

Meanwhile, there will always be people:

• Waiting for a sale.

• Waiting for a discount.

• Waiting for someone to make it easier.

That, too, is reality.

There will still be people who say it wasn’t discounted enough.

People who say it should’ve been free.

People who say, “It’s hard.”

People who say, “You don’t understand, Dewayne.”

Even after seeing raw facts.

Even after the numbers.

Even after the truth.

Some will still choose to keep their LLC.

Some will still challenge the message.

Some will still look for a reason not to change.

And that’s not a failure of information.

That’s human behavior.

Reality doesn’t reward good intentions—it rewards clear systems and solved problems.

This is what I mean when I say MAC Enterprise Consulting will be different in 2026.

Not colder.

Not less caring.

But more honest.

Because if I want to be recognized as a leader in the business space, I cannot ignore facts.

And the fact is this:

Success doesn’t come from teaching people endlessly.

Financial success comes from solving a problem people are actually willing to invest in.

The problem was never that people didn’t know how to start a business.

The problem is that they were told:

“Just get an LLC.”

And they accepted the shortcut instead of the education.

LegalZoom knew that.

Tailor Brands knew that.

They didn’t sell education—because that’s not what the market asked for.

But if you’re still here reading this, then you’re not looking for shortcuts anymore.

You’re looking for truth.

And the truth is this:

No one is coming to save you.

No one owes you anything.

And real business isn’t built on discounts—it’s built on design, structure, and intention.

Again, That’s not bitterness.

That’s clarity.

Sources & References

During the 2025 holiday season, I reviewed the websites of LegalZoom, Tailor Brands, and Incfile (now Bizee). Notably, none of these companies were offering holiday sales or discounts. That observation prompted a deeper look at their scale, revenue, and corporate structure.

LegalZoom.com, Inc.

LegalZoom is a publicly traded corporation. The company reported approximately $682 million in revenue in 2024, with trailing-twelve-month revenue exceeding $720 million in 2025.

Source: LegalZoom Revenue Data (2024–2025), StockAnalysis.com

Tailor Brands

Tailor Brands is a privately held company. While exact audited figures are not publicly disclosed, industry estimates place its 2024 revenue at approximately $66.8 million.

Source: Tailor Brands Revenue & Growth Estimates, GetLatka.com

Corporate Structure Context

It is important to note that these companies themselves operate as corporations or large private entities, not as single-member LLCs like the small businesses they help consumers form. This distinction gives them access to capital, scale, continuity, and systems that are fundamentally different from the typical LLC structures most new entrepreneurs begin with.

Source: Wikipedia — LegalZoom, Corporate Structure; General LLC vs. Corporation Definitions