When we are meeting with a potential new client, we find that they have already taken some steps in starting a business without asking or being asked any questions, let alone the right questions. They have created an LLC or a Corporation already in place.
We believe the first step to starting a business should be meeting with a CPA. Yes we are biased, but there are financial impacts on most early decision in setting up a business and attorneys don’t always ask any questions. Some are transactional in their approach to starting a business.
We discuss if it will be a part time or full time business. Does the client have experience within the industry that they are choosing? Is there spousal support? Why are they starting a business?
Then we go over all options for running a business. I have recommended that some clients with limited potential liability not organize or incorporate. Suggesting that they be a sole proprietor reporting on a Schedule C to make sure that they really want to own and run a business.
Entrepreneurship is not for everyone, but I think most should investigate for their own financial wellbeing.