Broke? Hate Your Job? Start a Corporation!
A ton of my friends are either unemployed, partially employed or almost out of a job. It’s a scary place to be. Believe me, I know. I was unemployed for 3 months without insurance – that was not fun. A few people very close to me are out of work and miserable. They look to me for advice because I was once a recruiter or because they simply value my opinion. The one thing I find myself saying over and over and over again – start your own company. Let me tell you why you should do it right now.
Incorporating will cost you maybe 5-600 dollars after paying the legal fees and the state filing fees. It varies from state to state. I recommend you get a discount lawyer, since this is the kind of work they do all the time, and it’s cheap as heck. You can even do it online!
I myself have been a part of or incorporated 3 separate companies. I’ve learned a lot along the way. (I’m not a lawyer, don’t hold me liable, do your research!)
Let me give you a few reasons why you should consider it:
1. Taxes! Corporations pay tax AFTER everything is spent, and individuals pay tax BEFORE they spend their money.
2. TAXES!!!! Seriously, you need to talk to an accountant, you’ll see right away the huge advantages afforded to you as a corporation. So many more deductions! Maybe you heard Warren Buffet, the richest man in America? He basically said – his secretary pays a higher tax rate than he does. I would guess he pays about 8% of his earnings on taxes. That might even be too high of an estimate.
3. Liability. If you crash your car into a crystal store, man, you are screwed – bankrupt most likely. If you crash your corporate car into the same store while “working” – your corporation may be screwed, but you aren’t. (To clarify, different types of corporations have different levels of liability. A general corporation affords you the most protection) If you messed up, you can just start a new company. Yes it’d suck, but at least you’re not bankrupt, XYZ inc. is. Your credit score is safe!
3. A feeling of self-fulfillment. Nothing feels better than bringing in your own money on your own terms. You set the prices, you determine the quality, you get paid what you can manage to bring in, etc. etc. Being self-sufficient is the best feeling in the world.
4. You learn a lot about the way the business world works. You’ll start to realize why being an employee is basically a dead end – even more so in this current climate of unemployment and the deleveraging of debt. You will most certainly start to see how much more you are actually worth if you do it all yourself.
5. Work whenever and wherever you want! Rent an office, build a bungalow, work in the basement, get a laptop and a Starbuck’s wifi membership – wherever! You will never be forced to be tied to a desk in a cubicle. Want to go get ice cream at 3pm on a busy day? Just go!
6. MONEY! If you are successful at the business you have built, you will make a lot more money than you ever could have made as an employee.
7. Retiring can make you rich! If you decide you’re done with your design business – sell it! You can’t sell work you did for someone else. But building a business is creating a very valuable pile of assets – clients, designs, inventory, computers, etc. Whatever you have is easily bundled into a package that you can sell for sometimes 10 times the annual sales. So if you had a company that was bringing in just 200k per year – you should walk away a millionaire if you can sell the company.
8. Have a family? It’s much easier to take care of the kids when you don’t have to be at work all the time. You make your own schedule. So now you’re free to go to your daughter’s all-state gymnastics meet on a Tuesday afternoon.
If you decide to make the leap and you pursue starting a business and you do it with assertion and dedication, you will succeed. I promise. Expect to learn along the way. Be willing to make mistakes, ask questions, get friends to help you. Just go out and make it work! Don’t take “no” for an answer and stop saying “no” to yourself. I can’t think of a better time to do it.
Good luck!
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