Entrepreneurship

Finding the Courage to Leave a Corporate Job: 10 People Share Their Motivations

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Leave a Corporate Job - Woman Typing on Computer

Explore inspiring stories of individuals who traded corporate security for the thrill of entrepreneurship and personal growth.

Beyond the Boardroom: Journeys from Corporate Life to Entrepreneurship

To understand the motivations behind leaving corporate America, we asked entrepreneurs and CEOs this question and received ten insightful answers. From entrepreneurship inspired by “Rich Dad, Poor Dad” to pandemic burnout prompting a business start, here are the top reasons these leaders shared for ditching the 9 to 5 life and starting their own ventures.

  • Entrepreneurship Inspired by “Rich Dad, Poor Dad”
  • Pursuing Passion for Writing and Helping Others
  • Breaking Free to Maximize Creativity
  • Fitness Passion Sparked Corporate Exit
  • Desire to Serve Drove Career Change
  • Autonomy and Innovation Fueled Departure
  • Empowering Small Businesses Inspired Leap
  • Vision for Better Life Led to Exit
  • Calculated Rebellion Against Corporate Constraints
  • Pandemic Burnout Prompted Business Start

Entrepreneurship Inspired by ‘Rich Dad, Poor Dad’

Corporate America never felt like the right fit for me; it was like trying to squeeze into a suit two sizes too small. My motivation to ditch the 9-to-5 life stemmed from reading “Rich Dad, Poor Dad” by Robert Kiyosaki, which opened my eyes to the limitless possibilities of entrepreneurship. 

I initially started a direct-to-home dog product service, driven by a desire to break free from the monotony and take control of my destiny. Courage came from sheer necessity—I was drowning in debt and needed a way out. That desperation turned into determination, leading me to create a book that shared my journey, which, in turn, opened doors to speaking gigs and a tribe of like-minded individuals. This experience inspired the birth of my companies, where I’ve helped entrepreneurs worldwide share their stories and scale their businesses.

Mike Fallat, Owner, DreamStarters Publishing

Pursuing Passion for Writing and Helping Others

I left corporate America because I wanted more control over my work and the freedom to pursue my passion for writing and helping others with their content needs. The rigid 9-to-5 life felt limiting, and I craved the flexibility to innovate and create without constraints.

Starting my own business was the natural next step. The courage to leave came from a mix of confidence in my skills, a strong vision for what I wanted to achieve, and the support of mentors and peers who believed in my entrepreneurial potential. The desire to make a meaningful impact was my driving force.

Bhavik Sarkhedi, CMO, Write Right

Breaking Free to Maximize Creativity

The corporate world was limiting my creative potential. Every day, there were tasks to complete, sure, but most of them were repetitive and didn’t encourage much innovation. I yearned for an environment that could maximize and appreciate my creative abilities. So, I decided to break free and pave my own path.

My main motivation was the desire to express my creativity without limitations. The 9-to-5 life is like a box that hinders my imaginative skills. I wanted to create value, not just for myself, but for others too. I wanted the liberty to explore, innovate, and make an impact.

So, I initiated a venture where my creativity could be the main driving force. This business was a platform that allowed my ideas to flourish and create worthwhile solutions for clients. This pushed me towards the path of entrepreneurship. The excitement of bringing my visions to life outweighed the fear of leaving a stable job.

Tim Hanson, Chief Creative Officer, PenFriend

Fitness Passion Sparked Corporate Exit

After more than one decade of climbing the corporate ladder of success, I came to realize that the so-called 9-to-5 life no longer filled me with passion or ambition. Despite the fact that my life was organized and stable, there was little opportunity for individualistic development. My ambition was to have a career that was linked to my passion for keeping fit and making others’ lives healthier. 

The turning point was at a corporate wellness program where I saw the life-changing power of fitness. I saw colleagues changing their lives through active living, and something hit me. 

Quitting the security of a corporate job was possible only through standing firm in my belief in the mission and support of a community that shared my vision. I had really planned the transition, saved a good amount to ensure financial stability, and really dug deep into learning about the sportswear industry. 

Knowing that I can produce products that will help people feel more confident in order to chase their fitness targets gave me the courage to step into the unknown. My experience in corporate America brought management and strategy skills, along with resilience—all essential in building my business.

Jay Barton, CEO & Founder, ASRV

Desire to Serve Drove Career Change

The main reason why I left corporate America was a desire to serve people in my area of passion. I had always desired to be a life coach or pursue a career that gives people a reason to become better. Where I worked formerly, I did not have this opportunity, and I felt greatly unsatisfied by my 8-5 job. 

Once I saved enough to sustain me outside the corporate world, I stepped out to begin my life-coaching business. What gave me the courage to leave was a strong support system from my family. They always knew what I desired to do with my life, and once I informed them of my intended move, they gave me their approval and support, and that is all I needed to hear from them. 

My father went on to loan me some amount with an agreement that I would give him back once my business had stabilized. I have since done that, and I cannot be happier with my work life as I am today.

Adrienne Allaway, Founder & Life Coach, Adrienne Allaway

Autonomy and Innovation Fueled Departure

The decision to leave corporate America stemmed from a deep desire for autonomy and a passion for innovation. I remember sitting in a meeting, feeling stifled by bureaucracy and the rigid structures that often slow down progress. I realized that my true drive was to build something from the ground up, where creativity and agility were the norms rather than the exceptions. 

Starting a business was indeed the next step, driven by the belief that I could make a more significant impact by bringing my own ideas to life. The courage to leave came from a combination of frustration with the status quo and a strong conviction in my vision. I saw a gap in the market that wasn’t being addressed and knew I had the skills and experience to fill it. The excitement of charting my own course and the potential to create something meaningful far outweighed the comfort of a steady paycheck. It wasn’t just about escaping the 9-to-5; it was about pursuing a purpose that felt truly fulfilling.

Rodney Steele, CEO, Dinsmore Steele

Empowering Small Businesses Inspired Leap

I left the corporate world because I craved more meaning and impact. The rigid schedules and bureaucracy stifled my vision for empowering small businesses. 

After a decade climbing the corporate ladder, I realized my purpose was to help entrepreneurs access capital and scale their impact.

So I founded my company to provide streamlined funding for SMEs, especially women-owned businesses, which face disproportionate obstacles. 

Though leaving my cushy job was terrifying, the vision of enabling growth and innovation gave me courage. With technology, we’ve funded over 5,000 businesses at rates and terms custom to their needs. Seeing their success stories reminds me why I took the leap. 

For anyone seeking purpose, find what ignites your passion, then pursue it relentlessly. There’s more to work and life than conformity—take risks and build something that matters.

Lauryn Grayes, Founder, Wealth Gems Financial

Vision for Better Life Led to Exit

In 2017, I made a bold decision to leave corporate America, driven by a vision to create a different life for myself and others. The relentless climb up the corporate ladder felt unsustainable, prompting me to resign and launch my own company. I decided to keep the elements I enjoyed and eliminate those I didn’t. 

From day one, my company has embraced a remote-workforce model, providing my team and me with the flexibility to seamlessly integrate work and life. This approach has eliminated the constant struggle to balance the two. 

Taking this leap of faith was terrifying, but I was fortunate to have the unwavering support of my husband. Together, we embarked on this transformative journey, redefining what it means to work and live.

Heather Eason, Founder, President & CEO, SELECT Power Systems

Calculated Rebellion Against Corporate Constraints

My decision to leave the corporate world wasn’t a mere whim but a calculated rebellion against the suffocating confines of the 9-to-5 grind. It was a thirst for autonomy, a burning desire to transform my innovative ideas into tangible reality, and an unyielding conviction that my true potential lay beyond the gilded cage of corporate America. 

The catalyst for this audacious leap was the relentless pursuit of my entrepreneurial vision. Fueled by an unwavering belief in my business idea and encouraged by the prospect of shaping my destiny, I severed the corporate shackles. 

This decision was fraught with uncertainty and risk, yet the allure of unbridled creativity, limitless growth, and the opportunity to make a meaningful impact far outweighed the perceived security of a traditional career path. My courage stemmed from a deep-seated conviction that the entrepreneurial journey, while arduous, would ultimately lead to a more fulfilling and impactful life.

Chris Yang, Co-founder & CEO, Coins Value

Pandemic Burnout Prompted Business Start

I’ve always been a creative person, but the pandemic left me in an office job working for someone else. I was completely burnt out. I barely had any energy left for the things I was passionate about.

Starting a business was more of an emergency-exit route out of my corporate job than a true expression of my creativity. Over time, I’ve been able to grow my business into a true creative outlet, as well as a way to support myself. It hasn’t always been easy, but it’s 100% been the right decision for me.

I think a lot of people get overwhelmed by the vast opportunities you have access to through entrepreneurship and getting out of the 9-5 world. However, if you can narrow down your focus to what you love to do (not just what other people say you should do), you can create true freedom and fulfillment in your life.
Delaney Rietveld, Website Copywriter, Dark Roast Copy Co.

Tips for Becoming A Successful Motivational Speaker

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Tips for Becoming A Successful Motivational Speaker - woman wearing blazer talking to crowd

Learn key tips for becoming a successful motivational speaker, including crafting your story, overcoming challenges, and inspiring others through your experiences.

The following is a guest post from my bloggy friends over at Executive Speakers Bureau. Interested in having a guest post on my website? Click here for my guest post submission form.

Speak Your Truth: Essential Steps to Becoming an Impactful Motivational Speaker

Motivational speakers used to need to fill an auditorium to make their message heard. Thanks to social media platforms, you can now make your speech just once and make an impression on your audience for years to come. Your story and your truth can change lives around the world.

Tips for Becoming a Successful Motivational Speaker

Focus on inspiring. There’s enough fear in the world. Take your truth, even the messy or ugly bits, and put it into a framework that focuses on ultimate success.

Start by writing down your story. Construct your story in a written format and simply start with a timeline of what has occurred. Next, focus on the backstory. If you came through a terrible illness and have found multiple sources to help you maintain your newly regained health, create a hub and spoke construction around your health crisis.

You might speak to:

  • Factors, such as genetics, that contributed to your health condition
  • Professionals who helped you through the illness itself
  • Steps you took to build a life of wellness
  • Lessons you’ve learned to maintain your health

The best times in our lives often come from the toughest situations. Being in great physical shape is wonderful; getting in excellent physical condition is a pretty rough road. If you’ve come through illness, injury, or overcome genetic limitations, your story shouldn’t shirk the toughest times.

Professionals, from counselors to surgeons to dietitians, can be of great use as we overcome difficult experiences. Few of us get through any crisis alone, and sharing your gratitude for the professionals who helped you can keep your story positive. Isolation is frightening.

Tips for Becoming A Successful Motivational Speaker - white man wearing blue jeans talking on stage.

Share the steps you took to overcome your challenge. If you came through a health crisis but found your body scarred and exhausted, the steps you took to rebuild your health may be quite personal. This part of your speech can often be quite humorous.

If part of your recovery from surgery or harsh medication regime meant that you wanted to change your diet, you can share stories of failed smoothies. (Not everything that will go through a blender is good in a drink.) Describe the new recipes you tried and offer a mental image of taste-testing that didn’t work out.

Finally, share the lessons you learned. Building a better life often requires experimentation, and not all experiments end with a positive result. Both good and bad outcomes can be teachable moments; if your audience members fear failure, the lessons you learned can help them release this worry and be a bit more flexible.

Benefits of Becoming a Motivational Speaker

Your story can be of great benefit to many people. As you share it, you may find it easier to shed some of the lingering pain and anxiety that sticks in your brain and heart when you tell your story.

You can also get creative with your story. Plan for a question and answer session after your speeches. Some questions may get you to think about your message in ways you never considered.

Motivational speakers often get their most powerful message from traumatic events. Looking at your trauma from another direction can increase your healing, improve your understanding, and allow you to expand your story.

Becoming a motivational speaker can also increase your confidence in other ways. Many people are horrified at the idea of giving a speech in public. Writing your speech around your own story may make it simpler, but it will likely still be scary.

The key is to practice public speaking in public. Having your speech memorized back to front is lovely, but if you’re standing on stage and you’re interrupted by a phone, sneeze, or surprising bout of laughter, you may become completely derailed. Learning to compose yourself and get back into your flow is possible, but practicing it in front of others will increase your skills as a speaker.

A career as a motivational speaker can give you a great deal of flexibility. Depending on the earnings you gain, you may be able to fully support yourself and your family with these earnings. You will need to keep providing great content; you may need to hire a writer to work with you or work with a coach to improve your presentation skills.

If you put your videos on the internet, your content can be easily shared. You’re going to have to update your content with each speech, at least a bit. A coach can help you revamp sections of your speech that you don’t want to alter (in terms of the message) by helping you find gestures or movements that can alter the impact of your message.

How Do Motivational Speakers Help People Daily?

Motivational speakers can provide inspiration in a variety of settings. People with great creative skills may struggle to create a logical plan to market their creations.

As noted above, there’s a lot of fear in the world. Think of your audience members as folks walking in very shady woods. Shade can be lovely and keep you cool, but shadows can also be incredibly frightening. Your speech will give them spots of sunlight to help them orient themselves to the location. If they’re lost, you can bring them to safety. Even if they’re not lost, you can help them find a clearer path to success.

One of the greatest benefits of offering a great motivational speech is that your message can be shared with people of all experiences and abilities. You’re not an executive coach, helping a young professional build up towards a management position similar to your first one. You’re sharing your story of overcoming adversity and crisis to inspire others to face their adversity and crisis.

Finding a better path out of tough situations is a wonderful experience to share. You don’t have to build a set of proverbial steps for another person. You can help them see what structures they can build for themselves.

Step into the Spotlight: Booking Your First Gigs

Tips for Becoming A Successful Motivational Speaker - crowd in auditorium listening

Launching your speaking career begins with local connections. Reach out to community groups, schools, and small businesses, offering free talks to build your reputation and gather valuable testimonials. Create a professional website that showcases your expertise and speaking topics, serving as your digital portfolio. As you gain confidence, start pitching to event organizers and conference planners with well-crafted proposals. Networking at industry events can open doors to potential clients. Once you’ve established a solid foundation, consider partnering with a speaking agent to expand your reach and secure higher-profile engagements.

Show Me the Money: Navigating the Financial Side of Speaking

Understanding the financial aspects of motivational speaking is crucial for long-term success. Research industry standards to set competitive speaking fees, but don’t be afraid to start lower and gradually increase as you gain experience. Offer diverse packages, such as keynotes, workshops, or full-day seminars, to cater to different client needs. Keep meticulous records of your expenses, including travel, marketing, and equipment costs, for tax purposes. To create a sustainable career, consider diversifying your income streams through online courses, books, or coaching services. Don’t forget to protect your growing business with professional liability insurance.

Command the Room: Mastering the Art of Presentation

Elevating your public speaking skills is an ongoing process. Focus on developing vocal variety by practicing different paces, pitches, and volumes to keep your audience engaged. Use purposeful gestures and movements to emphasize key points, and make consistent eye contact with individuals throughout the room to create a connection. Incorporate storytelling techniques to make your message more memorable and impactful. Master the art of the strategic pause for emphasis and to allow your audience to absorb information. Develop a pre-speaking routine to manage nerves and boost your confidence before stepping on stage.

Viral Inspiration: Harnessing the Power of Digital Platforms

In today’s digital age, your online presence is as important as your on-stage performance. Create consistent, valuable content across social media platforms like LinkedIn, Instagram, and YouTube. Consider starting a blog or podcast to showcase your expertise and attract followers. Use hashtags strategically to increase visibility and engage with your audience through live streams or Q&A sessions. Collaborate with other speakers or influencers for cross-promotion and expanded reach. Maximize your efforts by repurposing content across different platforms, ensuring your message reaches a wide and diverse audience.

Overcoming Obstacles: Navigating the Speaker’s Journey

Every speaker faces challenges, but it’s how you handle them that sets you apart. Combat imposter syndrome by reminding yourself of your unique value and experiences. When faced with difficult audience members, maintain a calm and professional demeanor. Manage speech anxiety through relaxation techniques and thorough preparation. Learn to recover gracefully from on-stage mistakes by improving your improvisation skills. As your career grows, balancing travel and personal life becomes crucial – set clear boundaries and prioritize self-care. Remember, rejection is part of the journey; view it as a learning opportunity and keep persevering.

Level Up Your Impact: Continuous Growth for Speakers

To maintain a successful speaking career, commit to continuous learning and development. Attend workshops and conferences for speakers to learn new techniques and stay current with industry trends. Seek mentorship from experienced speakers in your niche for personalized guidance. Join professional speaking associations to access valuable resources and networking opportunities. Regularly update your content to ensure it remains relevant and engaging. Collect and analyze feedback from your audiences to continually improve your presentations. Don’t shy away from experimenting with new technologies, such as virtual reality or interactive polls, to enhance your talks and keep your audience captivated.

From Paper to Digital: Transitioning Your Business Processes into the 21st Century

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Read about the importance of transitioning business processes from paper to digital. In this post we outline key steps and technologies to consider for success

The following is a guest post from my bloggy friend Megan Isola. Interested in having a guest post on my website? Click here for my guest post submission form.

Embracing the Digital Revolution: A Guide to Modernizing Your Business Processes

If you still haven’t transitioned your business processes to a digital climate, it’s time to get out of that rock you’ve been living under. Businesses that fail to adopt digital processes face the threat of falling behind competitors. The shift from paper to digital not only streamlines operations, but also enhances efficiency, scalability, and innovation. 

In this era of rapid technological advancement, embracing digitalization is no longer an option but a strategic imperative for organizations looking to thrive in the modern marketplace. This article explores the essential steps and considerations involved in transitioning business processes from paper to digital, empowering enterprises to embrace the opportunities of the digital age and unlock new levels of success.

Initial steps

Set your objectives

First things first, you need to define what you aim to achieve with your digital transition. Whether it’s reducing paperwork, improving data accuracy, enhancing the customer experience, or increasing accessibility to information, having clear objectives will guide your digital transformation efforts.

Choose the Right Tools and Technologies

There’s a ton of tech for businesses out there, but not all of them will meet the needs of your business. This is why it’s crucial to take your time and find what tools will have the most benefit for your business. 

Research and select the digital tools and technologies that best suit your business needs. This might involve investing in document management systems, customer relationship management (CRM) software, project management tools, collaboration platforms, or workflow automation software.

Create new training protocols

When you have a team that’s used to doing everything by hand, you must anticipate a period where you have to train your employees on how to best use these tools. Introduce the new digital tools and processes to your team, and provide adequate training and support to ensure a smooth transition. Address any concerns or resistance to change through effective change management strategies, such as communication, education, and involving employees in the decision-making process.

Data Security and Compliance

Another extremely key consideration throughout your digital transformation is security and compliance. While on-site processes certainly come with their own set of risks, they vary completely from the risks associated with digital transformations. 

When investing in digital tools, you must implement robust security measures to protect sensitive data and ensure compliance with relevant regulations, such as GDPR or HIPAA. This includes encryption, access controls, regular audits, and employee awareness programs on cybersecurity best practices.

What kinds of tools should you consider?

From Paper to Digital-AI on Computer Screen

Artificial intelligence (AI) and machine learning (ML)

AI and ML technologies represent pivotal tools for businesses aiming to streamline operations and gain competitive advantages in the digital age. AI encompasses a broad spectrum of capabilities, from natural language processing to computer vision, enabling automation, pattern recognition, and predictive analytics. 

ML, a subset of AI, focuses on algorithms that learn from data and make decisions or predictions autonomously. By integrating AI and ML into their processes, businesses can automate routine tasks, enhance decision-making with data-driven insights, and personalize interactions with customers at scale. 

Robotic process automation (RPA)

Robotic Process Automation (RPA) offers a potent means to streamline operations, reduce costs, and improve accuracy by automating repetitive, rule-based tasks. RPA software robots mimic human actions within digital systems, performing tasks such as data entry, invoice processing, and report generation with speed and precision. By deploying RPA, your organization can achieve operational efficiencies, enhance scalability, and free up human resources for more strategic endeavors. 

Blockchain technology

Blockchain technology presents a paradigm shift in data management, offering unparalleled security and transparency through its decentralized and immutable ledger system. By leveraging cryptographic techniques and distributed consensus protocols, blockchain ensures tamper-proof records of transactions, enhancing trust and accountability across various industries. 

You can utilize blockchain for applications such as supply chain management, digital identity verification, and smart contracts, enabling secure and transparent transactions without intermediaries. 

Predictive analytics

Predictive analytics empowers your business to unlock actionable insights from vast amounts of data, enabling informed decision-making and proactive strategy formulation. By leveraging historical data and machine learning algorithms, predictive analytics forecasts future trends, behaviors, and outcomes, enabling businesses to anticipate market shifts, optimize resource allocation, and mitigate risks.

You can apply predictive analytics across various domains, from customer relationship management and inventory optimization to risk management and healthcare outcome prediction.

Remote and mobile work solutions

Empower employees to work from anywhere by implementing mobile-friendly and remote work solutions. Provide mobile apps, cloud-based collaboration platforms, and virtual desktop infrastructure (VDI) to enable seamless access to digital tools and information, regardless of location or device.

User experience (UX) design

Prioritize UX design principles when developing digital interfaces and applications. Ensure that digital tools are intuitive, user-friendly, and accessible across different devices and screen sizes. Conduct usability testing and gather feedback from end-users to iteratively improve the user experience and maximize adoption.

Advanced data analytics and visualization tools

Explore advanced data analytics and visualization tools to gain deeper insights into your business data and communicate complex information more effectively. Implement interactive dashboards, data storytelling techniques, and data mining algorithms to uncover hidden patterns, correlations, and actionable insights from large datasets.

Custom digital solutions

Consider building custom digital solutions tailored to your specific business needs and workflows. Engage with software developers, data scientists, and UX/UI designers to design and develop bespoke applications, algorithms, or platforms that address unique challenges and deliver maximum value to your organization.

Agile and DevOps practices

Agile methodologies and DevOps practices accelerate the development and deployment of your digital solutions. These tools encourage cross-functional collaboration, continuous integration, and automated testing to deliver high-quality software faster and more efficiently while ensuring alignment with business objectives and customer needs.

Getting your business with the times

By embracing digitalization, your business can streamline operations, enhance productivity, and improve customer experiences. Whether you sell medical supplies or run a retail store, the adoption of digital solutions enables your organization to leverage advanced technologies such as artificial intelligence, blockchain, and predictive analytics to drive competitive advantage and fuel future success.

As we continue to embrace the opportunities of the digital age, the journey from paper to digital represents not only a technological evolution but a strategic imperative for businesses seeking to thrive in an increasingly digital world. With careful planning, investment, and a commitment to innovation, organizations can successfully transition their business processes into the 21st century and position themselves for sustained growth and prosperity.

About the Author

Megan Isola holds a Bachelor of Science in Hospitality and a minor in Business Marketing from Cal State University Chico. She enjoys going to concerts, trying new restaurants, and hanging out with friends. 

From Paper to Digital-Megan Isola

Protect Your Online Business Dreams: Avoiding LLC Legal Landmines

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The following is a guest post from my bloggy friend Rob Lora over at LLC.org. Interested in having a guest post on my website? Click here for my guest post submission form.

The Online Entrepreneur’s Guide to Airtight LLC Protection

TLDR: From drafting an ironclad operating agreement to picking the right state to zealously separating business and personal affairs, this guide covers the must-dos for LLC perfection.

You have a vision. A calling to create, to build, to make a difference through your online venture. You’re ready to pour your heart and soul into making it a reality.

But before you take the leap, there’s a crucial step you can’t afford to overlook: properly forming and maintaining your LLC. Neglect this legal foundation at your own peril.

The Importance of Properly Forming and Maintaining Your LLC

Imagine your LLC as a fortress protecting your personal assets from the risks and liabilities of your business. But like any fortress, it’s only as strong as its construction and upkeep.

Securing Personal Liability Protection

When you establish an LLC, you’re erecting a barrier between your personal and professional life. Your personal assets – your home, your savings, your family’s financial future – are shielded from potential business debts and legal judgments.

But this protection isn’t automatic or absolute. It requires diligence and care in how you set up and run your LLC.

Setting a Strong Legal Foundation for Growth

A properly formed LLC isn’t just about defense; it’s also about offense. It’s a springboard for growth, a signal to customers, partners, and investors that you’re serious about your business.

Cutting corners now might save time and money in the short term, but it can cost you dearly down the road. A solid legal structure from the start paves the way for a thriving future.

Common Mistakes When Organizing an LLC (And How to Avoid Them)

Let’s dive into some of the most frequent missteps entrepreneurs make when organizing an LLC, and how to sidestep these legal landmines. While the guide is based on Oklahoma, many of these principles apply no matter what state you’re in.

Skipping the Operating Agreement: A Recipe for Internal Disputes

Your operating agreement is the rule book for your LLC. It defines the rights, responsibilities, and relationships of the members. Neglecting to create one is like setting out on a road trip without a map or GPS.

Key Provisions to Include in Your OA

At a minimum, your operating agreement should spell out:

  • Ownership percentages
  • Roles and responsibilities
  • Voting procedures
  • Profit and loss allocation
  • Buyout and dissolution terms

Having these key issues agreed upon in writing can spare you from disastrous disputes and misunderstandings later.

Choosing the Wrong LLC Formation State

Not all states are created equal when it comes to LLC formation. Some have higher fees, more stringent requirements, or less favorable tax treatment.

Factors to Consider When Deciding Where to Form Your LLC

Before you automatically form in your home state, consider:

  • Where your business will primarily operate
  • State filing fees and ongoing costs
  • State taxation of LLCs
  • Legal requirements for out-of-state LLCs doing business in your state

An ounce of research now can save you a pound of headaches later.

Neglecting to Keep Business and Personal Finances Separate

Commingling personal and business funds is one of the quickest ways to undermine your LLC’s liability protection. If you treat your business account like your personal piggy bank, a court could decide your LLC is a sham and “pierce the corporate veil.”

Best Practices for Maintaining Financial Boundaries

To keep your business and personal finances distinct:

  • Open a dedicated business bank account
  • Get a business credit card
  • Pay yourself a salary from your business account
  • Keep meticulous financial records
  • Never use business funds for personal expenses

Blurred financial lines can lead to blurred liability lines. Keep them crystal clear.

Failing to Stay Compliant with State Requirements

Forming your LLC is just the beginning. To maintain its good standing and legal protections, you must keep up with ongoing state obligations.

Annual Reports, Licenses, and Other Ongoing Obligations

Depending on your state and industry, your LLC may need to:

  • File annual reports
  • Obtain and renew business licenses and permits
  • Pay franchise taxes or other fees
  • Update the state on major changes (address, registered agent, etc.)

Falling out of compliance can lead to late fees, penalties, even dissolution of your LLC. Make compliance a non-negotiable priority.

Legal Pitfalls That Can Sink Your LLC (No Matter What State You’re In)

Some legal traps can ensnare LLCs regardless of their state of formation. Here are a few to watch out for.

Inadequate Capitalization: Ensuring Your LLC is Properly Funded

An LLC that’s running on fumes is more vulnerable to creditor claims and legal challenges. Make sure you inject enough capital to cover foreseeable expenses and weather potential dry spells.

Not Following Corporate Formalities

Treating your LLC too casually can backfire big time. Skipping annual meetings, not keeping minutes, or making major decisions without proper votes can all be used as evidence that your LLC is a sham.

How Skipping Meetings and Record-Keeping Can Haunt You

If you’re ever sued, the other side will scour your records for any hint that you’re not respecting the corporate form. Sloppy or nonexistent record-keeping is a glaring red flag.

Mishandling Contracts and Agreements

Signing contracts in your own name instead of the LLC’s might seem like a small detail, but it can expose you to personal liability.

Signing in Your Own Name vs. the LLC’s

Make sure all contracts and legal documents are signed by the LLC, not you as an individual. It’s a simple but crucial distinction.

Accidentally Dissolving Your LLC

Yes, you can inadvertently dissolve your LLC, often without even realizing it. Failing to file annual reports, letting your registered agent lapse, or ignoring other compliance obligations can all lead to administrative dissolution by the state.

What Actions (Or Inactions) Can Unintentionally Close Your Doors

Other potential dissolution triggers include:

  • Extended periods of inactivity
  • Failure to pay franchise taxes or other fees
  • Operating without a valid business license

Stay vigilant and proactive to avoid an accidental business ending.

Piercing the Corporate Veil: When LLCs Don’t Protect Personal Assets

In certain cases, courts can disregard the LLC structure and hold owners personally responsible for business debts and liabilities. This is known as “piercing the corporate veil.”

How Courts Determine Alter Ego Liability

Factors that can influence a court to pierce the veil include:

  • Commingling of personal and business funds
  • Undercapitalization of the LLC
  • Failure to follow corporate formalities
  • Using the LLC for fraudulent or wrongful purposes

If a court finds the LLC is merely an “alter ego” of the owner, the liability shield can crumble.

Real-World Examples of LLCs Losing Their Liability Shields

Case law is littered with cautionary tales of LLCs that lost their protection due to owners’ missteps. From construction companies to restaurants to real estate firms, no industry is immune.

The common thread? Treating the LLC as an extension of the owner rather than a separate legal entity. A painful and costly lesson.

Preserving Your LLC’s Liability Protection: A Checklist for Online Entrepreneurs

Properly forming and maintaining your LLC isn’t rocket science, but it does require consistent care and attention. Use this checklist to help safeguard your online business dreams:

  • Draft and sign a comprehensive operating agreement
  • Choose the right state for formation based on your unique factors
  • Open dedicated business banking and credit accounts
  • Keep business and personal finances strictly separate
  • Stay on top of annual reports, license renewals, and other compliance tasks
  • Sign contracts and legal documents in the LLC’s name, not your own
  • Hold annual meetings and document major decisions
  • Ensure your LLC is adequately capitalized
  • Monitor your LLC’s status with the state and address any issues promptly

Your online empire is counting on you to build it on a rock-solid legal foundation. Don’t let preventable missteps turn your dream into a nightmare.

About the Author

Written by Rob Lora, a business professional with extensive experience in workforce solutions and a keen eye for market trends and industry dynamics. 

For the Skimmers – Here’s a Quick Rundown of What Was Shared in This Post

– Draft a comprehensive operating agreement that covers ownership percentages, roles, voting procedures, profit/loss allocation, and buyout/dissolution terms. This prevents internal disputes.

– Choose the right state for LLC formation based on factors like fees, taxation, and where you’ll primarily operate. Don’t just default to your home state.

– Maintain complete financial separation between business and personal accounts/expenses. Commingling funds can undermine your liability protection.

– Stay compliant with ongoing obligations like annual reports, licenses, and fee payments. Falling out of compliance can lead to penalties or inadvertent dissolution.

– Follow corporate formalities – hold meetings, keep minutes, properly document decisions. Lax governance can be used against you in court.

– Ensure your LLC is adequately capitalized upfront. Undercapitalization increases liability exposure.  

– Always sign contracts and agreements under the LLC name, not your personal name.

– Monitor your LLC’s active status closely. Simple oversights can trigger accidental administrative dissolution.

– Be vigilant against “piercing the corporate veil” by courts who may disregard the LLC structure if owners fail to treat it as a truly separate entity.

The key is treating your LLC with respect from day one by formalizing operations, maintaining separateness, and staying compliant. Proper formation and maintenance allows the LLC to serve its vital asset protection function.

How to Pitch a Collaboration That’s Hard to Refuse

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How to Pitch a Collaboration That's Hard to Refuse

Want to pitch an irresistible collaboration? Learn the key elements of an effective proposal and how to offer enticing mutual benefits to seal the deal.

The following is a guest post from my bloggy friend Indiana Lee. Interested in having a guest post on my website? Click here for my guest post submission form.

Collaborating with peers, partners, and coworkers is a great way to enhance your operational efficiency and share the burden of your responsibilities. Effective collaboration brings out the best in people, too, as folks can share their unique skills and talents when working together. 

However, if you have ever engaged in a group project at work, then you will know how hard it can be to convince people to collaborate with you. This is understandable, as many people mistakenly believe that group projects will put a disproportionate burden on them. 

Rather than growing frustrated with peers who turn down collaborative opportunities, learn to pitch group work in a way folks cannot refuse. This respectful, enticing approach to collaboration will build a buzz around your project and help you bring in the insight and expertise of more people. 

Understanding Effective Collaboration

When you invite folks to collaborate with you, you should already have a good sense of what, exactly, they will do. This is crucial, as you cannot afford to waste people’s time when they join in your efforts. Similarly, people who join your team should not be expected to shoulder more than their fair share of the work. Before you send out proposals, be sure that you understand the basics of effective collaboration, including: 

  • Culture: Do you have a clear sense of values driving your efforts? Do you welcome new ideas, and will you take the time to get to know your teammates? 
  • Goals and Roles: What do you aim to achieve, and who will do what tasks? This ensures no one takes on too much and will help you get more from your people. 
  • Leadership: What kind of leader are you? How do you plan to motivate and engage your co-collaborators? 
  • Communication Lines: How can folks get in contact with one another? What tools and tech will you use to ensure everyone is on the same page? 

Answering these questions will put you in a great position to write an enticing collaboration proposal. A little preparation shows that you are in a good position to lead these efforts and can be trusted to spread the workload evenly amongst your peers. Defining your goals and roles early on will be crucial when writing your proposal, too, as these details will form the backbone of your pitch. 

Writing Proposals

Once you have established some goals and identified key responsibilities, you will need to write a project proposal. A formalized proposal shows your co-collaborators that you are well-organized and ready to lead a team of people. In general, an effective project proposal contains key elements, like: 

  • Summary: Introduce the problem that you are trying to solve as clearly and concisely as possible. What will the impact of your project be on the wider problem? How will this introduction entice your stakeholders? 
  • Background: Dive a little deeper into the problem, including data and key details where relevant.
  • Solution: Propose a solution that includes a vision statement, core responsibilities, and a proposed schedule. This gives people an understanding of the scope of the project and the work they may be asked to complete. 
  • Resources: What will you need to follow through on your vision? Are you waiting for funding? What costs do you expect to incur? 

Conclude your proposal with a persuasive summary. Re-emphasize the impact of your project and foreground the benefits that you can offer to folks who join your team. This will help stakeholders remember your pitch for days and weeks to come and will help you build an emotive appeal. 

If you are pitching to individual people, be sure to personalize your pitch. Learn more about the person you are asking to collaborate with and figure out what motivates them. Researching your potential co-collaborators will impress your stakeholders and will ensure that your pitch is relevant to their needs and aspirations. 

When writing your proposal, remember to keep your pitch as concise as possible. You do not have to share every detail of your project up-front. Instead, use time-saving tools to speed up the writing process, and focus on helping potential co-collaborators understand the need for teamwork. This will get folks to jump on board quickly and can help you create a culture of collaboration and cooperation. 

Mutual Benefits

Unless you are working on a charitable project that requires altruism from participants, you probably need to offer some mutual benefits to the peers you ask for help. Foregrounding the mutual benefits of your collaborative efforts will tip the scales in your favor and help build buy-in amongst folks who were previously on the fence. 

If you offer financial incentives, be sure to manage your financial system with transparency. Use tools like document management systems and regularly reconcile your accounts. This will help you manage a budget and remain financially compliant. This is crucial if you plan on offering dividends or financial benefits to the folks who have joined your team. 

Benefits do not have to be financial to be enticing. Sometimes, folks will join your project to gain experience and add something to their CV. If this is the case, be sure to endorse these team members as fully as possible. Write praise-heavy reviews on their LinkedIn profiles and give them qualifications or certifications based on their efforts.  

You can also offer noteworthy experiences to your co-collaborators. For example, if you are running a project that will garner public attention, consider concluding with a virtual summit and inviting your team members to speak. This will give folks a chance to practice their public speaking, help them network, and will innately boost the credibility of their CV. 

Conclusion 

Pitching collaborative projects can be tough if you do not know how to communicate persuasively. Get the ball rolling by writing a proposal that is clear, concise, and properly organized. This will show folks why their efforts are important and will entice your peers into joining in. Follow through on this pitch by offering lucrative incentives. This will draw more people into the fold and help you share the workload amongst your peers. 

* Blog banner via Unsplash

About Indiana Lee

Indiana is a freelance technical writer, and is available for hire. Click here to find her on LinkedIn.

Easy Money Making Crafts At Home

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Whether you knit or crochet, make jewelry, quilt, scrapbook, etc., you may have thought about doing those things to bring in extra money working from home. Here’s how!

The basics of making money from home doing simple crafts are pretty easy, but the time required to devote to your crafting may not be feasible for everyone. Check out these common ways of making money from your crafts to find out if full-time crafting is something you’d like to pursue!

Stock Up

It’s hard to sell crafts from home that you don’t actually have on hand, so be sure to stock up on inventory ahead of time. If you are going to offer custom colors, designs, or sizes, then you will still want to have sample crafted items made up to show prospective buyers so they can touch and see what they are thinking of purchasing from you.

Online Sites

With the explosion of online purchasing in recent years, so has there been an explosion in selling crafts online. Sites like eBay have been the main source for those wanting to purchase handmade items. Craft only sites like Etsy have given those wanting to sell and purchase handmade items a specific place to go to find these types of items. Make sure to search for items similar to what you will be selling to see what they are being sold for, so you know how to price your own items. Being competitive in pricing will help you to make more money in the long-run when selling online.

Local Stores and Shows

Depending on the items you will be selling, some local shops may be willing to sell your products. Some may want to sell them on consignment and will take a percentage of the sale price as a fee for selling it for you. Other stores may want to purchase your items in bulk to keep them in their inventory. Either way, make sure that your items are branded or have your name as the designer/creator on them so that those who would like to purchase more like it know where and how to find you. Craft fairs and farmers markets in your area may be great places to get your name out there, sell some products, and meet people that you may be able to sell your products through in other areas.

Personal Catalog

If you sell a wide variety of products, like jewelry, having a catalog to hand out to stores that may be willing to sell your products will help to show off just how diverse your product line is. It will also encourage your customers to purchase more, and in higher quantities.

Personal Website

If sites like eBay or Etsy are too competitive or not catered to your specific craft styles, you might want to think about your own website. Whether you create the website yourself or have a site designer build it for you, you can perfectly market your inventory. You can promote your website through online forums, on the product you sell, and even though search engines like Yahoo or Google.

Warnings

Selling your crafts to make money may be a great source of income in theory, but it is also a fragile market. You may not make enough money one month but have so much work the next month that you can’t keep up with it on your own. Until you use your crafting as a sole source of income, you should make sure that you will be able to make the amount of money required and be able to handle the amount of work required.

You should also make sure that you have the proper business licenses to sell your products at the venues that you’ve chosen. For tax purposes, keeping track of your income and expenses throughout the year will make sure that you are keeping with all local and federal tax laws.