1. Never operate as a sole proprietorship. Even if your accountants tells you to “keep it simple” or you are too small to incorporate or you don’t make enough money, don’t listen! You are only receiving one niche of advice from a tax perspective and even it is may be correct from a tax point of view only (because you do not make enough profits to save on SE taxes) you are missing out on the marketing, legal and financial input also. For example, from a marketing point of view you are coming from a point of weakness if you are attempt to position yourself as the owner operator of a sole proprietorship vs the President of your own corporation. Plus you severely limit your ability to gain access to business credit when you do not separate your personal and business credit.
2. Never use the online business checking account balance as the only financial tool to give you feedback on how to run your business. Most people run a small business the same way their run their personal lives, by using their online PERSONAL checking account balance to make personal financial decisions. There is no comprehensive personal budget. Your business should have a tax and bookkeeping system with update software to tell you exactly where your profit and loss is at (even if you have not made a sale). Ask yourself, are you running a real business or just a hobby?
3. Separate your personal and business credit. This is an absolute must in today’s tight credit markets. This involves learning how to manage your business vendor and cash lines of credit, your personal credit score and working with D&B® and Corporate Experian® to develop a business credit profile quickly. Otherwise, your business may stand “financially naked” in front of the world with our you knowing it. How much business will that cost you? Can you afford not to master this subject?
4. Master the leverage of joint ventures to grow your business. You must learn the highest form of leverage to bring in clients at the lowest cost to keep you in business the first 3-6 months in business. Bring in new customers or clients are very expensive unless you know how to leverage properly other people’s money and get them to properly endorse you to their list. Most small business owners run out and place ads to attract new customers and wonder why they run out of money within 90 days. Study this subject. Learn the tools you must have to leverage other people’s money to grow!
   
5. Find a company that can provide a turnkey solution to help you start you business so you can focus on making a profit. After all, making a profit is the #1 reason to start a business. If you spend 14 hours per day attempting to do everything on your own to save a few dollars, you may quickly find yourself out of business because you had no time to acquire new clients or customers to grow your business.

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Forming a C corporation to take advantage of fringe benefits when your business doesn’t fit the C corporation model. (Can you spell nightmare?)

Asset Protection and Business I.Q.

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Costly Mistake Number 3:

Forming an LLC and having it managed by members instead of managers* (A sure way to lose flexibility and control)

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Costly Mistake Number 1:

Forming an LLC and NOT knowing how it’s taxed (Are you a single or multi-member LLC? Will you be disregarded for tax purposes, taxed as a partnership, a C-, or an S-corporation?)
Asset Protection and Business I.Q.

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Fast Business Start up

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