I created my vision board,
identified my mission and goals, and was ready to marry my dreams of
entrepreneurship! I had a brilliant idea that would generate more profits and
purpose for others. What else did I
need? Love and passion is all you need, right? I was head over heels in love
and wanted to accelerate the marriage process so that I could live happily ever
after with the business of my dreams.
But marriage requires more than love. It requires a strategic business
plan that begins with the most important decision you will ever make: your
legal structure!
There are four basic forms of
for-profit businesses in the United States. You can choose a sole
proprietorship, partnership, corporation, or limited liability company. I briefly explored the pros and cons of each
legal structure and quickly concluded that a sole proprietorship was best for
me. Why? I couldn’t wait any longer. I wanted to get married to my dreams NOW
and a sole proprietorship would be the most cost effective and convenient
business to start immediately. There are
no rigorous paperwork requirements, thus, helping you to expedite your business
execution date. I didn’t mind being personally liable for all financial
obligations of the business at this time. Since there are no specific business
taxes paid by the company, the owner pays taxes on income from the business as
part of his or her personal income tax payments. (Does it sound like I’m speaking a foreign
language yet? Don’t worry! I will discuss more about this in future posts or
blogs. You can always hire me to break down the basics over the phone or at
your group event). A sole proprietorship also offers complete managerial control
to the owner. I would be able to sale or transfer the business anytime I
wanted. Well all of these factors probably explain why a sole proprietorship is
the most common form of business organization. We want to marry our dreams and we want to do
it NOW.
So in order to expedite the marriage
process even more, I hired a wedding planner/business consultant. I needed a partner
in crime to help me manage the tasks that need to be completed before the
business launch date. The more we
worked, the more questions she asked. Where do you see your business in 5
years? How much revenue are you expecting to generate this year? What are your
premier products and services? Have you
identified all of the start – up costs? To what extent do you need to be
insulated from legal liability? You need to consider whether your business
lends itself to potential liability and if you can personally afford the risk
of liability. Have you thought about your opportunities to minimize taxation?
There are many more tax options available to corporations than to
proprietorships. What are the unique needs of the business and the personal
needs of you as the owner? What will happen to the business after you die? What
do I want to happen to the business when I’m no longer around to run it? When
you die, the business dies too! A sole proprietorship or partnership may
dissolve upon the death of its owner or owners but a corporation can be readily
distributed to family members. What if
you decide to sell your part of a business partnership? Do you want to bring in stockholders as the
companies grow? If so, you should consider a corporation. A corporation’s
capital can be expanded at any time in a private offering by issuing and
selling additional shares of stock. This is especially helpful when banks are
being tight with money. Do you have the money needed to purchase your inventory
now? Investors won’t usually invest in
sole proprietorships. A sole proprietorship has to contribute whatever capital
needed.
My head was spinning! I
thought I had it all figured out. All I
wanted to do was save the world with my brilliant ideas. But in order to make
this marriage work, these are things I would have to consider. It was a simple idea when my primary goal was
consulting services but my business consultant opened my eyes to other
profitable product ideas that would complement the services that are offered.
So I had million dollar ideas but did not have the funds needed to obtain the different types of inventory that I wanted. This means that I should consider changing my status
to an LLC so that I could attract investors who are willing to support this
dream of helping so many others. I’m glad that I discussed these questions with
my business consultant. I highly recommend that you seek sound counsel from
business experts before settling down.
Now I caution you to consider
these questions before settling down but don’t allow these questions to STOP
you from settling down. The world NEEDS what you have to offer. Marrying your
dreams can change your life as well as the lives of those around you.
Keep Creating Endless
Opportunities,
Ms. Corporate America 2015
*Certified Public Accountant
*Certified Fraud Examiner
*Project Management Professional
*Distinguished Toastmaster
*Certified Zumba Instructor
How can I help you achieve your certification goals?
