Intro

Starting a side hustle is one thing.

Turning it into a real business that can support you full-time is a completely different game.

One of the biggest questions that comes up early is:

👉 What’s the best business structure to choose?

Should you stay a sole proprietor?
Start an LLC?
Or go the S-Corp route?

In this episode of The Side Hustler’s Society, Elijah Bilel sits down with payroll expert Charles J. Reed to break down exactly how freelancers, tradesmen, and service providers should think about structuring their business as they grow.

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Intro to Charles J. Reed

• Founder of GetPayroll and payroll industry expert
• Certified Public Accountant (CPA) and U.S. tax practitioner
• Vietnam veteran
• 50+ years of financial leadership experience across multiple industries  
• Built and scaled a payroll company serving small businesses since 1991  
• Author of multiple books including The Payroll Book: A Guide for Small Businesses and Startups  

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Episode Overview

This episode is all about helping side hustlers and freelancers make smarter long-term decisions when it comes to:

• Choosing the right business structure
• Protecting their income and assets
• Transitioning from part-time to full-time
• Understanding payroll, taxes, and scaling

Charles brings a unique perspective from decades in both corporate leadership and entrepreneurship, showing what actually works—not just in theory, but in real businesses.

Listen to the Episode

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Side Hustler’s Society Resources

Side Hustle to Full-Time Strategy Session

The Personalized Side Hustle Starter Kit

Quick Takeaways

• Elijah Bilel highlights the growing number of people turning skills into side hustles
• Charles explains why business structure matters more as income grows
• S-Corps can offer strong tax advantages compared to sole proprietorships
• LLCs provide flexibility but may come with higher setup costs
• Liability protection is one of the biggest reasons to incorporate
• Entrepreneurs should think beyond income and focus on protection
• Scaling a business eventually requires hiring and delegation
• Corporate culture matters—even in small businesses
• Many people underestimate legal and financial risks early on
• Entrepreneurship offers wealth-building opportunities not found in traditional jobs

What Is the Best Business Structure?

1. Starting as a Sole Proprietor

Most people begin here by default.

If you:

• Start freelancing
• Pick up clients
• Or offer a service

👉 You’re automatically a sole proprietor

Charles explains that this is fine for testing the waters.

It allows you to:

• Start quickly
• Keep costs low
• Validate your business idea

2. When to Upgrade Your Structure

The key turning point:

👉 When you start making consistent money

At that stage, it becomes important to think about:

• Taxes
• Liability
• Long-term growth

Charles recommends considering a transition once you’ve decided:

👉 “This is something I’m taking seriously.”

3. Why S-Corporations Stand Out

According to Charles, one of the most powerful options is:

👉 The S-Corporation

Key benefits include:

• Pass-through taxation
• Potential tax savings compared to sole proprietorships
• More structured legal framework

This can help you:

• Keep more of what you earn
• Operate like a real business

4. LLC vs Corporation

An LLC is another popular option.

Charles explains:

• LLCs offer liability protection
• They are flexible in structure
• They can elect to be taxed as an S-Corp

However:

• They may cost more to set up
• They are not always as “structured” as corporations

5. The Importance of Liability Protection

One of the biggest takeaways from this episode:

👉 Protecting your assets is just as important as making money

Without proper structure:

• Your personal assets (home, car, savings) could be at risk
• Lawsuits can impact everything you own

Even in low-risk businesses:

• Mistakes happen
• Clients can sue
• Situations can escalate quickly

The Transition From Side Hustle to Full-Time

1. Start Small, Then Scale

Charles emphasizes:

👉 You don’t have to go all-in immediately

Instead:

• Start part-time
• Build income
• Learn the business

Then scale when:

• Revenue becomes consistent
• Demand increases

2. Entrepreneurship Requires Effort Early

One honest truth from the episode:

👉 The early years are heavy work

Charles shares that his first decade in business required:

• Long hours
• Consistency
• Patience

But over time:

• Systems improve
• Income stabilizes
• Workload becomes more manageable

3. Hiring and Delegation

As you grow, doing everything yourself becomes impossible.

Key shift:

👉 From doing the work → to managing the work

Building a team allows you to:

• Scale faster
• Take on more clients
• Create leverage

Mindset Shift: Employee vs Entrepreneur

A major theme in this episode is control.

Working a job:

• You follow someone else’s structure
• You inherit their work culture
• You trade time for money

Building a business:

• You control your environment
• You build assets
• You create long-term wealth

Charles highlights that most wealth is built through:
👉 Ownership, not employment

Key Lessons from the Episode

1. Don’t Just Focus on Making Money

👉 Focus on keeping and protecting it

2. Structure Matters More as You Grow

What works at $500/month:

• May not work at $5,000/month

3. Entrepreneurship Is a Long-Term Game

It may take years to:

• Build systems
• Gain traction
• Create stability

But the payoff can be:
👉 Freedom and ownership

Who This Episode Is For

• Freelancers (video editors, designers, consultants)
• Tradesmen and service providers
• Side hustlers planning to go full-time
• Anyone unsure about LLC vs S-Corp vs sole proprietor

Key Topics Covered

• Business structures explained by Charles J. Reed
• How Elijah Bilel approaches building a business
• Liability protection and why it matters
• Transitioning from side hustle to full-time
• Hiring and scaling a service-based business

Watch The Podcast On Youtube!