So, you have ventured out and have set up your own business, you have to be super brave or insane right?
In this day and age with all the challenges facing any rational person you have to be brave but not necessarily insane.
As a starting point we will conduct the insanity test.
Would you do any of the following:
- Would you drive a car without ever having had a driving lesson?
- Would you captain a yacht with no sea legs?
- Would you skydive without a parachute?
- Would you fly an aeroplane with no flying lessons?
- What about getting into a space shuttle?
Hazarding a guess, absolutely NOT but this is what many business owners do. We have the dream and the goal but passion alone will not get you over the moon.
This article is not about the business plan, cash flow, market analysis, supply and demand, the economy etc. We wish to highlight the necessity of having the correct legal business structures.
We have assisted over 30 000 business owners and the one factor that we can attest to is that establishing the optimal business structures is one of the key factors to success or at worst if you fail in ensuring minimal financial pain and at best ensuring that you maximise your after tax returns and leave a proper legacy on the event of your demise.
Back to the insanity test…
It is unfathomable that one will undertake any activity without the proper training or equipment (i.e structures) however that is what we insane business owners do all the time.
The correct structures will guarantee that your personal assets are secured from any business vagary that may befall you. If you have an asset intensive business the assets of the business can also be secured.
The ideal business structures will also ensure that you are tax compliant BUT that you only pay the tax that the law prescribes. We often meet business owners who voluntarily pay too much tax. This is not a crime but criminal as the Income Tax Act clearly stipulates what must be paid.
Life is not a competition but the difference between losing everything you own if your business fails versus getting a bloody nose and a bruised ego is a stark difference.
On the other competition track, if you have a successful business but are paying between 17% to 20% more tax than you should you are going to be at the grindstone longer than you should to achieve your goals versus a business owner that is properly structured and is saving between 17% and 20% tax.
The law allows for you to establish robust structures that will ensure personal and business asset protection and allow for you to be tax efficient to optimally reward you for your bravery in running a business in this day and age.
The question is…
Are you INSANE not to have the ideal structures in place?