#4 When Is It Time to Form a Business Entity? (aka making your business legit)
I got a DM the other day from a friend who wants to start one of the coolest business ideas I’ve come across recently. It mixes a few of my interests and I can’t wait to see what she does with it. She had a few questions for me though, one being, “When is it time to form a business entity?”
I get this question a lot so I figured it was time to do an episode on it.
Unfortunately for all of us, there’s no one who goes around online scouting out people and businesses who are ready to form a business entity or even to tell you when it’s time to graduate to the “next” business entity you should have. So annoying, I know.
And even though there’s no one-size-fits-all answer to this question since every business is different, there ARE some ways to tell if you should register your business as a certain legal entity.
Many times, women who ask me this question want to know parameters for where there business falls in the eyes of the government but there’s usually some fear mixed in with the question, too. If you’ve never done this kind of thing before, it’s all kind of unknown and since no one’s telling you EXACTLY what to do, you’re left feeling a little insecure about the decision you’re making (or not making).
In this case, I don’t think insecurity was on the mind of the woman asking me in my DM’s, HOWEVER, I know it was a factor for me when I was deciding what to do with my first business and my current business.
So, in this episode I give you some of the guidelines the IRS uses when deciding if you have a business, plus some ways to know if you’re personally ready to take the leap from one entity to another.
Sometimes, when you’re walking the line between 2 entities, it can feel like both a financial and mental feat to commit to the next level for your business. When I talk about feeling out where you are in your business and whether or not you’re ready- this is what I’m talking about.
Of course, the IRS will always trump how you “feel” about your business but sometimes there can be a little more to it commitment-wise.
Still confused? Listen to the episode- it’s a short and sweet one today so give it a listen and get back to me on whether or not you’ve decided to level-up your biz. It can do wonders for the growth of your business.
If you HAVE made the decision and aren’t sure what to do next, Foundwell, my step-by-step business course will be available May 1! I’ll walk you through the steps to get you feeling confident in your business (legally, financially, and confident in your brand, website and marketing strategies). We’ll cover it all and it’s broken into manageable, bite-sized pieces so that by the time the program ends, you’ll have the foundations of your business set and be ready to grow with the frustrating set-up behind you.
I’ll send you all the details soon so make sure you’re on the list by signing up below.
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Thanks for tuning in guys! Meet me back here next Wednesday for the first interview of the podcast.
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