I lost close to $10,000 forming my first Limited Liability Company (LLC). Surprisingly, none of it came from penalties, fines or legal mistakes. I made early decisions without context, largely driven by fear.

I thought that throwing money at the problem would reduce my risks and save valuable time. How wrong I was.

My experience eventually led me to build BizReport, a platform made to help first-time business owners navigate and understand how LLC formation processes actually work. If this happens, they can avoid frustrating delays before unnecessary costs quickly build up.

When starting my business, I thought that my LLC formation process would be simple enough. File some paperwork, wait for approval and continue. However, I found myself spending money on things I didn’t truly understand, before understanding the problems I was trying so hard to solve.

How $3,750 in consulting bought reassurance but not progress

In the early formation stages, I hired an LLC Consulting Service. I was worried about missing things that I viewed as important at the time. I wanted and, in most cases, needed someone to guide me. I finally had someone to show me I was doing everything correctly, which reduced my uncertainty and stress. Or so I thought.

At the time, I felt responsible and in control.

I spent a grand total of $3,750 on consulting services over three months. While the conversations were helpful enough, most of the formation advice was available to me for free. The advice itself was good enough. My main issue was my timing.

At this point, my LLC was non-operational. I had no revenue, no employees, and no important compliance tasks to complete. I paid for professional guidance during my initial formation phase with very little to actually guide.

I bought myself costly reassurance rather than business momentum.

Instead of learning the foundational rules behind how the different formation processes worked, I relied on other people to explain it for me. This slowed my ability to make well-informed decisions as my business began to develop.

Related: If You Don’t Have Integrity, Don’t Expect Success — Why Trust Is a Leader’s Most Valuable Asset

How frustration led me to buy premium services too quickly

As things began to develop, I genuinely felt stuck. With my progress stalled, I needed something tangible to grab on to before I could move forward.

As my frustration continues, I made another quick decision. I bought a premium LLC formation service package, thinking that it would simplify everything, solve my problems, and restore my much-needed momentum.

It definitely worked from a service standpoint. My LLC documents were correctly filed, communication was clear enough and my formation process finally felt organized. To my surprise, I even used a promo code to reduce my upfront cost.

Unfortunately, I realized that the package provided was way above what I needed.

Many of my purchased services were tailor-made for LLCs with employees, revenue and ongoing regulatory requirements, none of which applied to my current business. While the service was delivered as promised, it was way more than I actually needed at the time.

I paid for coverage out of frustration rather than actually thinking about what matched my current situation.

Related: The 3 Biggest Mistakes That Made Me a Better Entrepreneur

Why not cancelling consulting cost me even more

Looking back, one of my biggest mistakes was failing to stop services when I didn’t need them. After paying for a premium formation service, I kept my consulting firm active. I decided to layer support rather than properly assessing my needs.

Until May 2025, I continued paying my consulting firm every month.

Upon reflection, I had no clear reason to keep doing this. At this point, my LLC formation was finished. Therefore, my consulting service overlap added no value at all. All it added was additional costs.

The service was good enough. However, I failed to pause, think and ask myself one simple question: Do I actually need this? My blind oversight turned into significant overspending that would influence the rest of my decisions.

Why LLC formation timing matters more than I realized

If this wasn’t enough, another of my costly mistakes came from misunderstanding my timing.

My LLC existed on paper. Therefore, I still needed to complete my compliance obligations, even though I had no actual business activity. This included my applicable tax filings.

In the end, I paid around $1,500 for tax and accounting services when I had no revenue, no operational activity, and no transactions. I used the same consulting firm that I should have already cancelled.

If I had understood the correct timing, I could have delayed steps or managed them correctly myself. However, I thought that because my LLC existed, I needed to handle everything immediately.

When it comes down to it, timing matters just as much as compliance.

Conclusion

Losing close to $10,000 during my LLC formation process didn’t happen because of one big mistake. It happened because I made several small mistakes governed by fear. I left them unchallenged for too long and paid the price.

I decided to spend money before actually understanding what my business needed. I purchased reassurance rather than meaningful execution. I truly misunderstood how my lack of proper timing affected my business costs.

I’m not saying that professional help is the problem. When used correctly, it saves valuable time and prevents costly mistakes. However, when used without context, it becomes very expensive.

If I could go back in time, there is one thing that I would do differently. I would slow down my spending and understand what I actually needed to do. I would match my services with the reality in front of me rather than being driven by fear.

This mindset would have saved me thousands.