Ralph is starting a US firm with two others. He asks me which structure (S corporation or limited liability company) he should use.
While this isn’t my area, I suggest an approach:
- Study online comparison tables.
- Become familiar with both structures.
- Seek independent accounting advice.
- Choose the better structure.
In short: know what you’re getting into, decide, then move on.
Ralph does steps 1 to 3, but just can’t manage 4.
Suzy is a fellow founder of this enterprise. Given her strong business administration skills, she finds Ralph’s indecision puzzling (to put it mildly).
This shows a basic problem that plagues business:
Inability to decide.
Of course, that’s not the way it’s put. Rather, it’s a worry that endless deliberations can’t make a decision 100% correct, forever.
Yet many decisions are over-analysed, delayed, queried and even reversed.
This takes valuable time and energy from something crucial: the next thing you need to decide.
So, when deciding, ask yourself:
Do I need a Rolls Royce, when a Holden will do?
A good decision now may be more valuable than a slightly better one later.
And at some point, the cost of lost opportunities far outweighs the quest for perfection.
I’m not saying you must rush: take enough time – to make a good decision.
In extreme cases, reversing an old decision can be an expensive way to undo good work and end up where you began.
Yet far more often, a reversal merely irritates or costs what can’t be moved to a new approach.
CHANGE FOR CHANGE’S SAKE
Some reversals are due to real need, such as major market shifts. Yet I’ve also seen U-turns done merely to chase competitors.
This comes back to trying to (re!)make perfect decisions.
If, at a fork in the road, you go left and a competitor goes right, that’s no reason to backtrack and go right too.
You’ll merely end up behind your competitor.
WATCH YOUR STEP!
The path to a comfortable life is simple: strive to identify and meet your challenges today, to make room for those that’ll come tomorrow.
Worrying today about tomorrow’s unknowables costs time and effort better applied elsewhere.
Worse, indulging such worries by revisiting past decisions sends you down the road to ruin.
Pic by Rob Lavinsky.