Business owners face many challenges as they go down a brand new path. While starting a business can be an exciting time in any person‘s life, it comes with a lot of responsibilities that they might not know much about.
An often overlooked aspect of starting a company involves structuring the business properly. It’s easier to take care of proper structure at the beginning rather than re-organizing later on. With either need, Dorado Management Services has been there for business owners in the past.
Structuring a Brand New Business
Having the opportunity to start from scratch is usually a preferred method with the business structure. That’s because if a business owner works with a company like Dorado Management Services, they can get the exact help and expertise they need to thrive. Every business is different, but they’ve been in the business for long enough to know what works and what doesn’t in certain situations.
Dorado Management Services likes asking every business owner questions before settling on the right structure. Before working with a management service team, keep some of these tips in mind to understand the structure better.
Involvement
How important is it to stay involved with this business? Some starting a business want little to nothing to do with day-to-day operations. They simply want to be a partner or family member of the business, remaining hands-off with everything else.
Others want to be involved every step of the way. Having total control of a business can be very empowering, and it makes a lot of sense for those keeping a business small. Leaning towards sole proprietorship, a partnership, or an LLC makes the most sense for those wanting to stay involved.
Look at the Big Picture
A business can launch with no employees and a one-person team doing it all. However, if the plan is to grow, that should be taken under consideration when putting together a structure. It might not make that much of a difference getting a structure just right in the beginning, but doing it shortly after it’s time to hire people makes sense.
Anyone who is a freelancer should look into a limited liability company so that they can separate themselves from the business itself. It doesn’t take much effort to set up an LLC, and taxes with a W9 and EIN look a lot sharper than just a Social Security number. The best part is that an LLC is simple enough to expand if necessary.
Funding
Funding is always a challenge for any business owner out there. A person might feel like they have everything handled as far as money is concerned, but they are finding out just how much it costs to run a business successfully.
If running a business seems like it might be an issue, a sole proprietorship will likely not fix things. This is where it makes more sense to have a partnership at the very least. Bringing on somebody else who has money can cut down on the amount of debt a business goes into. It’s just a matter of correctly setting up a partnership and signing the required paperwork so that no one feels like they are fleeced on the deal later.
If true investment money is necessary, a C Corporation might be the way to go if true investment money is necessary. It is the easiest way to raise capital, provide stock options, and more. It’s not impossible to convert a different business structure to a C Corporation, but it takes a decent amount of time, and extra money. Starting with a C Corporation prevents this from occurring.
Innovation
If it seems like a business structure is too rigid from the beginning, there’s still plenty of room for innovation. In fact, it’s encouraged for business owners to run an organization the way they want to and make things a little more customized. Once it comes time to acquire new talent, they will see this as a positive that everything‘s operating the way it should.
Businesses grow, and people joining the business want to feel like they are a true part of the organization. With proper structure and job titles, that can be attainable
Re-Organizing an Existing Business
If it seems like structuring a business is a challenge right away, re-organizing is almost always going to be tougher. This is when Dorado Management Services shines when helping out business owners.
Re-organization is not necessarily a bad thing, as it usually means that the business needs to expand at an unexpected rate. Professional assistance will make the most sense to keep everything looking good on paper. The only exception might be a business owner who has reached organized or restructured existing businesses in the past.
The recommendation from professionals is to always go with a limited liability company if there is any doubt. It’s fairly simple to run as an administrator, and re-organizing a business in this way makes sense. There’s flexibility to be taxed as an S Corporation down the road, and restructuring again isn’t incredibly difficult.
That said, even LLCs occasionally require reorganization so a business can raise venture capital. It can be a lengthy process to re-organize that way, but the good news is that money can start to come in that will allow a business to reach new heights.
Why Structure is So Important For Any Business
Going into the business-building world without proper structure is rarely a smart idea. Even if it’s the most basic of ideas with structure, it will make things very simple down the road. The investment in working with a company like Dorado Management Services can save time and money later on.
Once a business owner gets the hang of structure, they can start to handle some of the setups on their own. At the same time, business owners love trusting a management team that knows exactly what’s necessary to keep things looking as they should.
