I’d confidently say it’s now. In fact, my philosophy is that individuals, including your children, should embark on entrepreneurial ventures early on. Entrepreneurship contributes to the growth of nations and economies. Here are a few compelling reasons:
- Entity and Tax Structure Freedom: Why tether yourself to someone else’s vision? By starting your own business, you gain the flexibility to choose your entity and tax structure. Working for someone else may limit your potential, especially when it comes to fixed income. Embrace the freedom to unlock an unlimited upside in earnings.
Remember, the journey to financial success often begins with the decision to venture into entrepreneurship. So, why wait? Start now and shape your own path to success.
When should I incorporate?
One of the most frequently asked questions is, “When should I establish a proper business entity, such as an LLC (Limited Liability Company), corporation, or trust?” There are two prevailing perspectives on this matter. The traditional viewpoint from the accounting world suggests that you should form a company when you have sufficient cash. However, this approach has significant drawbacks, and I’ll explain why it’s the wrong answer.
If your goal is to become an entrepreneur, generate income, and build wealth, it’s advisable to form your corporation without delay. The issue with waiting is that, as a sole proprietor, your business is tied to your social security number. Consider the impracticality of this scenario: waiting until you’ve accumulated a substantial income before forming a company. By this point, you may have to overhaul your bank account, merchant account, and domain name, restarting everything associated with your business. This not only poses challenges with state records but also triggers issues with lending and credit.
To avoid this messy situation, my recommendation is to take your entrepreneurial aspirations seriously and initiate the process right away. Consult with the appropriate professionals to ensure that you navigate the complexities correctly from the start. Don’t wait—act now to establish your business foundation with clarity and precision.