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What's your 'pie in the sky' business idea?

Business meetings - those two words can draw excitement or ire depending on your perspective. As you meet with your partners to discuss a new business idea, you can quickly tap into the creativity in the room, but as ideas become a reality, questions arise that can bog down progress in both business formation and product creation. How can you work past these roadblocks on the way to success?

Choosing a business structure

In the early stages of planning, you will discuss what kind of business structure you and your partners will utilize. You probably know what the company will do, but how it will run takes a little more discussion. The advantages of a limited liability company (LLC), an S corporation or a C corporation will be the subject of much discussion between you and your colleagues, and understanding the differences can help drive the conversation. 

LLC

  • Flexible and simple
  • Avoids double taxation of property and income

S corporation

  • Avoids taxes on profits outside of compensation
  • Limited shareholder and stock options

C corporation

  • Provides more benefits to both employees and shareholders
  • More deductions for employee expenses like health care

Whether you want a small, medium or large-sized business, LLC, S corp. or C corp. may change as the business grows, the prospects of which can be written into the business plan.

A business law attorney can assist in including the legal needs for growth in your business formation. Your legal professional can also act as a third-party voice to your business structure outside of the egos and emotions of the daily workflow.

Focus on the formation

As a soon-to-be business owner, you want to be efficient, and keeping discussions focused is often the key to early meetings. Even if you intend to develop a large business, the close company you keep is critical.

Amazon CEO Jeff Bezos was recently named as one of the richest people in the world. To help him reach his business goals, he relies on a "two pizza rule" to keep meetings productive. That is to say; he never invites more people to a meeting than two pizzas could feed. Could you use this same rule during the formation of your business?

Understanding the advantages of particular business structures can help drive formation discussion toward the 'pie in the sky' that is your business goal.

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Kisner Law Firm, LLC
Gulf Tower
707 Grant St., Suite 2646
Pittsburgh, PA 15219
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Phone: 412-208-4263
Fax: 412-235-6704

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