Your Ultimate Guide to Understanding Business Structures

Nov 2, 2020

Your Ultimate Guide to Understanding Business Structures

Why would anyone want to lock their small business down into a business structure? Just the term “structure” might be enough to give some entrepreneurs the heebie-jeebies. After all, modern folks value flexibility. It’s why so many of us own personal vehicles instead of relying on public transportation, why we prefer to book hotel rooms with free cancellations, and why we don’t purchase lifetime subscriptions to streaming services like Netflix or Hulu. We enjoy the freedom afforded by a variety of choices and want to be able to reverse course on decisions whenever the need arises.

This love for flexibility extends to our professional lives. While workers in prior generations often chose a career and stuck with the same company for decades before ultimately claiming their pensions, many Americans now experiment with various options and avoid being tied down to 1 company. This approach often means freelancing for your entire career or taking a meandering journey through the entrepreneurial jungle.

The benefits of a malleable career include fewer constraints on your creativity, pursuits, and accomplishments. If you can dream it, you very well might be able to do it.

“In my case, when I worked as a writer in my full-time job, I was only writing about my beat—articles and features,” explains entrepreneurial guru Mukti Masih. “When I started freelancing, I learned blogging, which was quite different from in-depth articles that I was used to. Thereafter, I co-founded a video production company with my brother so I got the exposure to script and screenplay writing. I have also written scripts for audiobooks, website content, copies for ad films and TVCs, product descriptions for e-commerce websites, white papers, and e-books. I am quite sure, a few jobs down the line wouldn’t give me the freedom to write all these kinds of things.”

At the same time, there’s something to be said for structure in the business world. And there are compelling reasons to set your small business up as an entity. Here are some benefits to consider:

  • Tax savings
  • Growth opportunities
  • Financing qualifications
  • Personal liability protection

It’s also worth noting that when you set up your business as an entity, you don’t completely surrender your flexibility cardyou may actually have the opportunity to change structures if necessary.

About the Author

Grant Olsen

Grant Olsen

Grant Olsen is a writer specializing in small business loans, leadership skills, and growth strategies. He is a contributing writer for KSL 5 TV, where his articles have generated more than 6 million page views, and has been featured on FitSmallBusiness.com and ModernHealthcare.com. Grant is also the author of the book "Rhino Trouble." He has a B.A. in English from Brigham Young University.

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