It’s time to think about being your own corporation

I had lunch with a friend of mine today who recently completed a stint as a contract CFO. It was his decision to resign as he felt the company was not progressing and it was time to look toward new horizons. What I found to be particularly interesting was that he has incorporated himself as his own LLC and we agreed that more people should consider that option.

Different from freelance, incorporating oneself positions the worker to gain health insurance and retirement benefits as a corporation of one. It requires research to find the best prices for those things but it can be done at a much more reasonable cost than as an individual.

The agreement in Congress on Tuesday , highlights my idea that people should not expect to be taken care of by the government or the company they work for. Medicare, Medicaid and Social Security account for 40% of the budget spending in the United States. Clearly this has to change if the U.S. is going to make any headway in reducing the ever-increasing deficit.

Many people stay in jobs they do not care for, working for bosses they cannot stand and with people they despise. Why? Mostly for the benefit packages offered. Healthcare for an individual is beyond an affordable reach for most Americans and a retirement plan without a corporate match can be daunting. Yet the current 9.2% unemployment rate is in part due to corporations’ reticence in hiring full time employees due to the benefit packages they must provide – as well as the government mandated family leave and unpaid time off statutes.

Incorporating oneself is one way to approach the situation. Since corporations prefer to hire contract employees, hiring a ‘company of one’ to provide a specific service over a specific time offers flexibility to both the employee and corporation. People under 35 today do not expect loyalty from their employer. In fact they appear to embrace the idea of changing jobs and finding new and interesting work challenges. Of course obtaining healthcare and benefits as a corporation of one isn’t always easy as it takes discipline and planning.

On the other hand it is a possible new way for many people to work. If you do not care for the engagement that you are working on you can exit that particular engagement. The idea being that you should have more than one engagement in the hopper at any given time. As a corporation of one you command a higher fee than a salaried employee. Without healthcare and benefits mucking up the works a company can pay you for your true value and not the aggregated value of having to cover everyone the same regardless of performance or need.

It’s not for everyone and I realize for many people this is an unthinkable approach, but in times of turmoil there have to be alternate ways of thinking about how people wish to conduct their professional lives. What I am suggesting is that the days of hooking on with an employer who would nurture your career and keep you on independent of personal or company performance – are gone forever. It’s a mercenary world out there and people need to know that there are other ways to make a living than simply working for the man.

How about working for yourself

About markkolier

Futurist, entrepreneur, left lane driver
This entry was posted in Best business practices, Innovation, Living in the World Today and tagged , , , , . Bookmark the permalink.

3 Responses to It’s time to think about being your own corporation

  1. Nader Ashway says:

    Interesting post, Mark. A community of corporations of one could provide an interesting object study in how services are exchanged and expertises are shared. A totally new business model structure. Hmmm.

    However, it does impose upon each person who would pursue such a path that an understanding of brand, or at least a clearly identifiable value proposition be formed for each “individual” corporate entity. Different from individual “strengths,” each corporate value proposition could be used as larger corporations scan the professional landscape during the procurement process.

    Interesting thought indeed.
    Nader Ashway

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  2. Terry Melia says:

    Great thought-provoking piece, Mark. I just got laid off (after 14 years) by the Upper Deck Company, so I am actually considering making myself into a LLC. Your points hit home loud and clear, especially as I ponder writing that first check for COBRA medical coverage for my family. I am a valuable commodity and I know I can find work, but the possibility of making myself a LLC is really intriguing. You may have just provided me with the kick in the pants to get it done. Thanks.

    Terry Melia

    Like

    • markkolier says:

      Thanks for the comment Terry and am always happy to have an impact (however little it may be) on what people might think. You hit the nail on the head – you are a valuable commodity. Somehow the corporate world can rob people of that value. Portability is freedom more than anything else. Good luck and thanks for the comment.

      Like

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