Inc.

Jenn: Three letters and a period never meant as much as they do today.

I-N-C. Period. Incorporated. Inc.

That’s US!

This morning, Jill and I met with Matt and Diana Matigian, two people who excel at the services they provide because they are passionate about the work that they do.

Matt runs Blue World Asset Managers and is dedicated to educating small business owners and entrepreneurs on how to be successful and expand their network for professional growth. As he points out on his Web site, “we have all heard that 85% of businesses fail within 3 years. Nobody tells you why. We know what the primary causes of failure are and can help you to avoid them to maximize your opportunity for sustainable success.” His wife, Diana, runs her own law practice specializing in, among other things, strategic business council and business entity architecture.

We were lucky enough to meet Matt and Diana at the #sohoseminar last week. It was clear from the beginning that they believed in what we are doing and were genuinely interested in helping us go about starting a business the right way from the very beginning.

Little did we know just how helpful they were going to be!

Our meeting was originally supposed to take anywhere from an hour to two hours — we chatted easily for well over two and a half. We came ready with a list of questions — their advice and recommendations were so solid that we didn’t even look at our sheets of paper.

In talking through what we saw as the goals of our business and key strategies, we determined that the ideal fit for us at this time would be to file as a corporation. Specifically, an S Corporation.

Jill and I had been debating between becoming an S Corp or an LLC. Both offer great benefits that apply to what we are doing, and we’ve talked to business owners on both sides who are successful and enjoy how they run their business. After working through our long term goals, the S Corporation became most appealing and was recommended by both Matt and Diana.

NOLO has a great article detailing S Corporations. In fact, we’ve read a lot of articles lately. Perhaps too many. It can be hard to come to a clear decision when there are so many legal considerations flying back and forth. But Matt kept it simple for us by explaining the concept visually.

Below is my hilarious attempt at recreating Matt’s drawing for all of you:

Essentially, in a regular, C Corporation, the company is taxed on business profits and its owners pay individual income tax through salaries, bonuses or dividends. Taxed twice? No thanks.

By electing to become an S Corporation, all business profits “pass through” to the owners, who are only taxed once through their personal tax returns. The S Corporation as a living entity no longer has to pay taxes. It’s a simple concept, but bringing it to life through a drawing really drove home the benefits for us and fit the best with our current hopes for our company.

Our relationship with Matt and Diana has only just begun and we can’t thank them enough for the time and energy they have devoted to making our business dream come true. We highly recommend their services because of their sincerity and, or course, passion. As Matt so eloquently puts it:

“Entrepreneurs know their business, but they don’t always know the business of their business.”

It’s easy for us to say what we want to do and know what we’re passionate about, but it’s a whole other beast to try tackling the nitty gritty aspects of being our own business owners. Knowing that we have two well-qualified, energetic people in our corner has done wonders for our confidence levels.

We left the meeting feeling like this:

Source

Our world right now is our business. It’s in our hands to make it a success. But the key thing to remember is that we are not alone. The best thing you can do for your business is to not be afraid to ask for the guidance and advice from those who have done it before you. Matt and Diana call themselves “serial entrepreneurs” — and we take what they have to say seriously.

Here are the three most basic tips Matt provided for a business to be sustainable:

1. Generate positive net income
2. Turn that net income into cash by collecting on receivables
3. Turn cash into a strengthened balance sheet by increasing assets and decreasing liabilities

To the old pros, this may seem logical. To us newbies, it made good business sense. In the whirlwind that has been our first week and a half of entrepreneurship, it was refreshing to spend almost three hours learning the business 101 tools we need to be successful from the ground up.

Stay tuned for more information detailing the official launch of our corporation!

We’re curious if there are any fellow entrepreneurs out there who have stories about your own beginnings and finding out which entity was right for your business. Share your insights in the comments — we look forward to hearing from you!

Dream bigger,