Inc. Yourself How to Profit by Setting Up Your Own Corporation

So You Want to Be a Corporation Now that your appetite has been sufficiently whetted by visions of tax-free sugarplums, let's get down to basics. Do You Have What It Takes to Be an Entrepreneur? Consultant Brian Azar, "The Sales Doctor," has worked with several thousand people in the past ten years. He has created the following quiz to predict entrepreneurial success: On a scale of 1 (lowest) to 5 (highest) 1. Can you work on your own, independent of others, for long periods of time? 2. Can you sell yourself, your ideas, products, concepts, services? In other words, can you persuasively and effectively communicate to others and be able to draw them into your point of view or project as collaborators, supporters, customers? 3. Do you have good people skills: bonding and rapport? coaching and managing skills? sales skills? 4. Do you have good organizational skills: time management? communications--oral and written? 5. Are you organized, structured, disciplined? 6. Can you make decisions quickly while maintaining your flexibility? 7. Can you learn from your mistakes? 8. Can you take calculated risks, as opposed to procrastinating? 9. How well do you handle money? 10. Do you know your bank manager's first name? 11. Do you have persistence, tenacity, stamina--especially when the going gets tough? 12. Do you have a "mastermind"? (A mastermind is a group of people--mentors, role models, peers, or other entrepreneurs or small business owners--who support and may assist your vision and goals in various ways.) Finally, and most important: 13. Do you have an idea, service, or product that you love? believe in? A perfect score is 85; a very good score is 60 or higher. Use this quiz to identify the areas in which you need to improve your entrepreneurial skills. Don't slough this self-examination. According to Azar, four out of five small business owners go out of business within five years, and it's not for financial reasons. The top four reasons are: 1. Lack of organizational skills 2. Poor attitude 3. Poor sales and marketing skills 4. Poor people skills Don't be a casualty--be a success! Advantages of Inc.-ing Yourself Until now, most self-employed people have been operating as sole (or individual) proprietorships, a form of business organization in which the individual provides the capital, starts and runs the business, and keeps all the net profits and is taxed on them. As a sole proprietorship, the individual assumes total liability. One step up in complexity from the sole proprietorship is the partnership, in which two or more people act as joint proprietors: They provide joint funding, joint management, and joint financial responsibility. Unfortunately, like the sole proprietorship, the partners are personally liable to an unlimited degree for all the other partners' errors. A corporation is the most sophisticated--and protective--form of business organization. It is a "legal person," completely separate from the individuals who own and control it. A corporation has the power to do anything any person may do: carry on business, own property, lend and borrow money, sue and be sued. Most important, it offers its shareholders limited liability: Its stockholders can lose no more than their original investment; they are not liable for the debts of the corporation. In terms of limited exposure to liability alone, it pays to incorporate to protect your assets; if you incorporate, no one can attach your house, car, or Ming vases if your business fails or if you lose a lawsuit. While this point is particularly important in such obvious professions as medicine, dentistry, law, architecture, and the construction industry, limited liability plays an important role in lesser-known areas.McQuown, Judith H. is the author of 'Inc. Yourself How to Profit by Setting Up Your Own Corporation' with ISBN 9780767902250 and ISBN 0767902254.