| There are three primary differences between your situation and Patrick's situation: 1. Patrick is a US citizen who lives and operates his businesses in Japan, which automatically makes accounting and filing taxes several orders of magnitude more difficult than filing taxes for a business that operates in the US. 2. Appointment Reminder, as an entity, operates in regulated industries, most notably medical care. That requires HIPPA compliance, which carries legal and financial risks if compliance is not accurately implemented, maintained, and insured. Patrick's conscientiousness in terms of business process is very much to his credit, and the consequences of Appointment Reminder going down, losing customer information, being hacked, etc are much higher vs. comparable issues with Pinboard. 3. Patrick engages with large companies as a consultant on a somewhat regular basis, with contract values that are substantial, and with counterparties that have legal departments that are also substantial. The level of legal and process overhead required to close these deals, execute on the project, and collect payment is comparably substantial. In summary: you and Patrick have very different lives and run very different types of businesses. He's not "overcomplicating" his business operations - he's being smart and diligent in ways that benefit him greatly in terms of both revenue and risk mitigation. Also, for what it's worth: I would highly recommend against operating as a sole proprietor. LLCs are inexpensive, easy to set up, easy to maintain, and mitigate significant personal legal/financial risks. Insurance would also likely benefit you - a basic computer systems / PII policy would mitigate your (generally small) risk in this area: without insurance, getting sued by anyone even moderately persistent would likely put you out of business. Think of it as the business equivalent of earthquake insurance: you can save a bit of time/effort/money by going without it, but as soon as an adverse event occurs, you REALLY wish you had it. Likewise for accounting - we probably have similar businesses in terms of overall complexity (that is, not much), but Bench + my accountant save me so much time and effort it's silly to do accounting and bookkeeping myself any more. Hope this helps. (Happy Pinboard customer.) |
Not sure what it's like in the US, but in Canada this isn't some magical easy way to escape liability. The accounting, tax burden and how you draw a salary changes significantly when you incorporate. Not to say it isn't worth it, but it isn't as simple as "do it".
>Insurance would also likely benefit you
Sage advice for any business.