|
|  |
|
|
|
| |
| Aug 09, 2007 4:07 am |
|
re: re: Creating a company run from home |
Laura Wheeler
| |
I think there is something to the credibility issue - if you have a structure other than sole proprietorship, people think you are more serious about your business. I'm living this right now, and we get taken seriously by influential entities in the region that did not do so when we were a sole-proprietorship. The difference has been measurable. It does open some doors - not for all businesses, but for some (more likely to in the professional arena, and more especially if you have plans that require cooperation from power players in your area). Given our grandiose plans, it was the logical thing to do, and people whom we need to get in our corner to make it happen are more willing to listen since we have a structure that will support the growth we intend.
I think you tend to take YOURSELF more seriously, and be more diligent about running the business like a business when you have some sort of official status also. Just my opinion.
And even though you do have to have a personal guarantor for a corporation, getting credit is much easier with a business form other than sole proprietor - again, not because of legal reasons, but because banks are more willing to believe you are serious if you form a business on a structure that is more formal than sole proprietorship. In some states, ANYONE can declare that they own a sole proprietorship, and they do not even have to register a DBA. Banks also look at corporations as growth vehicles, so they are more willing to take a risk early on, in the hopes that they'll ride the wave with you.
Credibility does not come in on the surface, but it can in those situations where someone actually looks into your organization before doing business with you. If you sell jewelry retail, it isn't likely to matter. If you sell jewelry wholesale, it may make a difference. If you deal with providing training, professional services, or consulting, to businesses, it can make a difference if you have a structure other than sole proprietorship. Again, I'm saying this from experience, and from seeing the difference in how people react to us, and how much more easily they trust us since we have a business structure they feel has some substance behind it. When we had a sole proprietorship, I never thought there was any disadvantage to having that structure - I never even noticed the difference until we incorporated, and that was in NO WAY our reason for doing it.
I think that growth potential, and growth plans are a prime consideration in choosing a business structure. You really need to know where you are going, and with whom, before you choose a vehicle to travel in.
Laura
Mom to Eight
Firelight Business Enterprises, Inc.
http://www.firelightwebstudio.com
http://www.westernhillsinstitute.comPrivate Reply to Laura Wheeler (new win) |
|
| |
|
