It always amazes me at how people view certain things. What makes it even more amazing is the fact that so many people seem to have what I refer to as “selective discernment.” What I mean by this term is that many people will approach things from one standpoint when dealing with one topic and then take a completely different approach when it comes to another one. They’ll apply one set of rules for some activities and then a completely different set of rules when it comes to others. This can not only be confusing, it can even be dangerous in certain settings. Let me show you what I mean.
In working with literally thousands and thousands of current and prospective business owners over the years, I’ve come across a lot of different perspectives on business and life in general. Some of the business owners that I work with are the type that are perpetual students. I mean this in a very positive way because these people are continually looking to continue their education and to learn more and more ways to make their business, their lives, and themselves better and better. I commend these people for doing so.
On the other end of the spectrum are those that seem to employ what is often referred to as the “vaccination theory” of learning. Much like their vaccination shots, their approach is that once you get something taken care of, there’s no sense dealing with it ever again. While this may be okay with certain things in life, there are many other areas where this is an awful approach to take.
Perhaps no field illustrates this phenomenon more so than the area of business structuring. I’m not quite sure why it is but I guess that it could have something to do with the fact that most people just don’t understand this important field. In fact, I think some people mentally shut down at the mere thought or mention of anything having to do with the overall structure of their business. That is, if they take the time to think of it at all.
You see, for many people, the process of structuring their business is something that they’ll get around to whenever they’ve got time to think about it. While this is pretty bad in itself, another problem that people have when it comes to structuring their business is that they do the right thing, by setting up their business, only to mistakenly presume that they’ll never need to look at the structure ever again. They treat the structuring of their business like those vaccination shots and just think that everything’s taken care of for the lifetime of their business. Unfortunately, this is not the case.
What really surprises me is that some of the people who take this approach are the same people who understand full well
that they’ve got to keep on top of the latest trends, current marketing strategies, and the changing environment if they hope to succeed in their business. It’s here that the concept of “selective discernment” comes into play. They know that they’ve got to keep an eye on changing their websites, tweaking their marketing campaigns, updating their copy, and staying ahead of the game in their core business. At the same time, they apply a completely different set of rules when it comes to their structuring. I just don’t get it. It seems like it would be easier and just be common sense to follow the same set of rules. As I always say, “common sense is not so common.”
The worst part about this is that it can prove to be fatal for a business. The reason for this is that most structuring of business ventures is done in consideration of the conditions which exist at the time of the structuring. Sure, there may be some flexibility built in, but it’s rarely done in such a way as to cover the business for the lifetime of the enterprise. In fact, the goal, at least indirectly, of a successful business is to outgrow the business structure necessitating adjustment. If you don’t outgrow your structure, chances are you’re not really growing.
My objective in this article is not to beat up on anyone for failing to think enough about their structuring. I just want to do my part to make you aware of some things that can help
you to be as profitable with your business as possible. If you’re not structured in the best manner, you could be paying far more in taxes than you are legally required to pay which will definitely impact your profitability. At the same time, you may find yourself vulnerable to a lawsuit or ill-equipped to structure a sale of your business in the most efficient and profitable way possible. Isn’t that one of your primary objectives? Isn’t your goal to be as profitable as possible?
Think about your business structure and determine the last time you reviewed it. Is everything structured properly? Are you sure? If you’ve got questions or if you’d like better assurance that you’re properly structured, take some time to give it a once over. It isn’t difficult, and it doesn’t take a whole lot of time, effort, energy, or money. Believe me, taking the time to at least monitor your structure on a periodic basis doesn’t cost, it pays.