This isn’t legal or accounting advice. 

Once upon a time the first step towards starting a business was to incorporate. In the US, that means calling the IRS to get an Employer Identification Number (EIN). With an EIN, entrepreneurs can form a C-corp, LLC, or whatever other entity the think they’ll need. Conducting business happened after all this was finished.

It’s not like that any more.

Yes, companies still need an EIN, a legal entity, and a bank account, but today startups begin doing business well before they incorporate. They use their own money to create landing pages to test their messages with a modest Adwords budget. They build software and get early commitments from customers.

Vet your business idea and your team first because if either fail to work, all other efforts will be a waste of time. Once you have a better idea of your company’s potential, you’ll be in a better position to know what sort of corporate entity you’ll need.

Operating a business without incorporating is perfectly legal.

You can own websites, charge money, and offer services without incorporating. You’ll just operate under your own name and you’ll have to report any income to the IRS.

This phase can last a long time. The longer the better, actually.

The more time you give yourself to vet your business in a low-cost way, the less risk you’ll face when you ultimately decide to devote more time and money to it. Klaus Teuber, creator of the board game Settlers Of Catan, for example, spent four years tooling away at early versions of the game while working as a dental hygienist in Germany. He tested on his family and friends and didn’t leave his day job until he had a bonafide hit on his hands.

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