When starting a business, many entrepreneurs spend too much time deciding whether to organize as a sole proprietor or LLC. Let me explain what you should be focusing on instead.

So, you’ve come up with an idea to change the world. You know at some point you will have to form a legal entity, whereby you can generate revenue on behalf of the business. Should you set up a sole prop or an LLC?

Well, my suggestion is to focus on making money first. No matter how you make the money: be it under your own name or a business name. Just figure out a way to start generating money. Focusing on the money will help to determine if the business has any real potential.

Once you begin generating consistent revenue, then consult with a CPA to determine the suggested filing class. Try to find a CPA that will offer advice on the best structure for your business at no cost. Most of them will initially consult with you for free.

Will they suggest an LLC? Will they suggest a sole prop? Well, there is a good chance your CPA won’t suggest an LLC or Sole prop. With my business, it was an S-Corp that made the most sense.

Bottom line, it doesn’t matter what you initially file as because once you confer with a CPA, they will probably amend your business structure. Business structure can be changed at any time.

So initially, focus on the money. Then worry about the business structure soon thereafter.

I’m Justin Leonard. Please visit leonardinnovation.com take action and sign up for the free mini course. Leonard Innovation is the business school for entrepreneurs who don't come from wealth. Thanks again for tuning in.