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Incorporating a business will increase your sales.
Everyone wants to set up a website and make money online, but they don't always know they need to incorporate in order to make even more money than if they weren't a full-fledged business. When you incorporate your business, you're making it legitimate and you'll need to start paying taxes on your profits. If you're making over $600 from your services or products, you will need to pay taxes on it regardless if you're incorporated or not, so why exactly should you be incorporating if you still have to pay taxes?
In this discussion, I'll be going over a few reasons why you should be incorporating and why it will help your business increase it's sales.You'll never hear someone say "I'm a sole proprietor making $1,000,000 a year!" because it simply doesn't work like that. People will incorporate in order to keep everything separate from themselves. They do this because if everything goes south, they can bail and nothing hurts their own credit or bank accounts. If the business ends up doing really well, you can sell your company all at once and get a single check.
If you're a profitable sole proprietor, and you're trying to sell your "business", you'll have to sell everything individually and it will drive the buyer crazy. You may even turn a lot of potential buyers away because they won't want to deal with the stress of signing 100 different points of sales. Having your own business means you're incorporated, and you will be seen as a professional because of it
People see you as an authority
When you incorporate, you will have one leg up on the little mom and pop shops that are selling a simple service or product out of their home. You can set up a mailbox at a mailing company such as UPS and get your own business address. I always recommend UPS because they give you a suite number and not a P.O. box number. It just looks a little more professional when you talk to potential clients and when people see "Suite #26" on your website instead of "P.O. box 129" lol
If people see that you have a home address or a P.O. box, they won't think of you as a professional business and they won't want to take a chance on their purchase. They will go to your competitors who are incorporated and have a legitimate business address, to make a purchase because they are seen as an authority.
If your company is run under your own name, as a sole proprietor, you won't be taken as seriously as if you were "John Doe INC". Sure, you could just put INC after your name or the business name you want to run under, but if it's not registered with your state/country, you won't be professional and people will know when they get their invoice or after their payment.
Incorporating your business will put you ahead of the competitors who are not doing it. If you're in a big niche, you will definitely have to do it in order to be on an even playing field. If you're in a low competition niche with a bunch of sole proprietors, you will still need to incorporate because it will make you look like the main authority in your industry
You will have to do it eventually
If you want to be taken seriously, you will need to incorporate in order to be the top dog. If you run everything under your own name, no one will take you seriously for long because you aren't taking your own business seriously. Incorporating isn't something difficult to do, you just register a business name with the state or country and pay an incorporation fee, after that, you just wait for your incorporation papers to come in and then you set up a business bank account with that information. If you have a partner, you split everything 50/50 or 49/51 depending on how much you trust the other person lol
Running a business is what everyone wants to do if they're being their own boss. So incorporating is something you should have on top of your list if you are already making a few bucks here and there with your website, service, or products.
You will be able to run as a separate entity
Running a business under your own name, as a sole proprietor will just bring up a bunch of problems later on if you end up running it into the ground or wanting to sell it. If you run your business into the ground and fail, you will have to liquify all of your assets and that's not the easiest thing to do if you aren't incorporated. If you are incorporated, you can sell everything in one bundle and not have to worry about individual sales. Sure, you can break everything up if you want, but it's not really needed. If you are solely a digital company, there won't be much to sell off at the end, but it's still worth it to incorporate if you want to be taken seriously
Running your business as a separate entity will show you're an authority and not a single person. People will think you have dozens, or hundreds, or employees working for you and that alone will get people to trust you before they even contact you. Looking like a big corporation, even if you're by yourself, will go a long way when you're trying to get people to work with you
You can sell your business later on
I've already covered this a bit in the above sections, but this deserves it's own section since it's pretty important. Let's say you are a small mom and pop shop that makes a bunch of money and doesn't incorporate, and then you want to sell everything, it will be difficult to do. It's a difficult thing to do because you can't sell everything at once, you will need to sell everything individually since you're selling products, equipment, and anything else that is related to your business.
If you are incorporated and you want to sell your business, you can just sell your business name and anything that is owned by that name will be included in the sale. This means your potential buyers will need to do one business deal and not 50.
Some investors will see that you're not incorporated and see dollar signs. This is because they will save a lot of money because you don't really know what you're doing. If you're making $5,000 or $10,000 a month and want to sell your business, but you're not incorporated, you likely don't know how to run the business and it can be scaled up exponentially. These buyers will gladly purchase 40 different things from you, and take their time doing it because they know they can boost your sales from 5k or 10k a month to 20k to 50k.
I would highly suggest incorporating and learning how to run a business before you start to get serious. Your potential buyers will work with you more often if you're incorporated and if you're not, you will pretty much be calling in the sharks who will low ball you in order to take over and scale everything
You can sell stock in your company
If you get to a certain point on your path to success, you can start selling stock options. People won't buy stock options if you aren't incorporated because they can't! I know that some of you don't want to ever sell stock options because you're basically selling parts of your company. Did you know that as long as you own 51% of the stocks, you still have complete control over what happens even if there is a board of directors trying to tell you what they think should be done with the company? Everything will come down to a vote, and if you own 51% of the company, it doesn't matter what anyone else votes because you can trump them all with your controlling shares
Selling stock in your company is a long way away if you just started out. This should be an end goal, but it should always be a goal for you if you take your business seriously
Incorporating your business should be one of the first things on your list, right after "Make $1,000 a month" lol. If you want to be taken seriously by your clients and buyers, you will definitely need to incorporate. No one wants to hear that you have a P.O. box and you run your business as a sole proprietor, I know I don't. I want to work with the company who has the experience and is professional, and those are the ones who took the time to incorporate. Sure, there are plenty of bad companies out there who are incorporated and there are great ones who haven't, but the ones that are incorporated took the extra steps to run their business and they will likely get more clients because of it.
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