Sometimes, you set out to make money without planning to start a business. You may sell things on eBay or put paintings on Etsy for extra cash. Maybe you invented something that makes a few bucks on the side.
What happens when your small business projects start making big money?
If your side hustle has started to bring in real money, it may be time to consider incorporating. There are several advantages to incorporating a business venture.
When you incorporate a business, you are creating protection for yourself. If your business goes into debt or gets sued, if you’re incorporated they cannot target your personal assets.
This also helps you keep your expenses separate. When you incorporate, any business debt is separate from your personal finances.
Business debt won’t affect your personal credit, and vice versa. It can be a useful tool to help smaller businesses grow.
Help your hustle grow
If your side business is beginning to grow, incorporating can give you new ways to expand. Incorporated businesses may have access to new lines of credit. They can access low-interest business loans that you can't get on your own.
Furthermore, incorporated businesses can last past an owner or the person who started the business. If you ever want to sell your hustle or start a new one, incorporating means your first project doesn’t just end.
Increase your reputation
Being incorporated gives a business a sense of legitimacy. Having a business bank account and business checks makes everything feel official.
This legitimacy can help your customers feel better about recommending your products to friends and family. It can be the extra detail your business needs to take the next step.
Take advantage of tax benefits
Incorporated businesses can write off expenses for tax purposes. This can save lots of money, especially if your business includes driving.
Furthermore, there are certain tax benefits available to incorporated small businesses that you cannot apply for until incorporating.
Your side hustle can turn into the main source of your income with luck and hard work. If that happens, you need to be able to protect yourself and the business. Incorporating can help both yourself and your business.
If you have any questions about incorporating your business, a skilled business law attorney can help you through the process.