business you are a sole proprietor by default? Just like if you do not have a “Will” the state has one for you, if you do not create your own business structure “The IRS” has one for you. Notice what the spelling of these two words together, The IRS=THEIRS. All that had work to earn that money from your business, down the drain because you did not take the time to properly prepare the plan for the “Vision”.
I am not downing an entrepreneur who chooses to be a ‘Sole Proprietor’ (SP), but understand the risk of this type of business classification.
What are the risks? So glad you asked. There are many risks, but as an entrepreneur myself there are some more challenging than others to overcome.
1. Unlimited Liability
2. Injury Liable
3. Legal Liability
These are just a few of the risk, but know that whatever structure you choose there are potential risks associated. This is not meant to scare or discourage you from pursuing your dream/vision, but where there is Vision there is Provision. Provision is not always financial, knowledge is power but applied knowledge is Success. Wouldn’t it be better to do it right the first time? If you do not take the time to lay a proper foundation for your dream, it is just a matter of time before it turns into a nightmare. Nightmares like personal financial devastation, emotional distress or worst of all criminal ramifications.
So you say, what do I do now? I am already in business.....
1. Don’t beat yourself up. Just start from today. Don’t pray that the issues will go away GET BETTER at dealing with the issues. We have a plethora of resources available to us today. SBA.org offers FREE classes on every topic imaginable
2. Develop a business plan; use your experience as a guide. Make building a team of professional consultants Tax, Legal, Administrative etc. part of that plan
3. Get a Mentor, at least 1 personal and professional. Don’t recreate the wheel it has all been done before successfully. Success is yours for the taking.