You are a new entrepreneur on a journey to achieve your goal of working from home, getting rich, writing a bestseller or creating the next great app that no one can live without. Before you get in the car, you'll need to register and insure it, right? I mean, what if you have an accident and someone gets hurt? What if your car breaks down and you don't have enough money to fix it? With the low cost of registration and insurance fees versus the potentially high cost if something goes wrong, it makes sense to go ahead and pay the small fees to protect yourself, right?
You'd be surprised by how many entrepreneurs would rather be exposed to potentially bankrupting liability then spend the small amount of time and money it takes to become incorporated. New entrepreneurs are much more likely to set up their businesses as Sole Proprietorships instead of as Corporations, even though new businesses set up as Corporations are much more likely to reach “Lake Success” than Sole Proprietorships.
Protection from liability is not the only reason to take Incorporation Road. Corporations also become profitable faster and are more likely to survive the growing years than Sole Proprietorships. According to Professor Scott A. Shane, author of Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors and Policy Makers Live By, studies show that new small businesses formed as
corporations out perform new sole proprietorships on almost every possible measure: speed of business development, access to external capital, survival, sales growth, employment growth and profitability.
When you incorporate, it shows customers, banks and other potential investors that you are serious about growing your business and that you intend to be around for a long time.
So don't take a chance on Sole Proprietorship Highway, I know everyone does it and it seems faster and there are no tolls, but if you truly want to achieve your business goals and you want to protect the hard work and money you've poured into your business, take Incorporation Road.
If you want advise on which corporate entity is right for your business and/or need help getting incorporated, call or email me for a free 30 minute consultation.