When you decide to incorporate your first business the very next thing that you should do is to incorporate two to five more businesses even if you don’t have any plans on using them at this point.
There are several key reasons for this strategy and if you are serious about building a business and possible corporate credit you should follow these steps.
Once you have your first business incorporated and you’re working that business and growing that business, you may find that in time for one reason or another that you may need to shift some of your assets around for protection or simply to go after new business opportunities that may present themselves to you that won’t work with your current business structure.
After you have established your first corporation and have built its credit worthiness, you will find it is easier to build credit for your other corporations by simply sharing that credit with your other corporation though a process known as daisy chaining. This is a super way of building the credit multiple corporations from all of the hard work that you have already done.
Having multiple corporations set up allows you to create your own set of shelf corporations. These are corporations that are just based on their age alone which will allow you to get any business up and running in a fraction of the time it would normally take. These shelf corporations will add real tangible value to your bottom line in many ways. Such as if your ever chose to sell one, the going rate is approximately $1,000 per year of age, and if it has any established corporate credit attached to it the value can triple or even quadruple.
Statistics say that most businesses fail in 1 to 5 years of their inception, so if this is true, by simply having multiple corporations in the wings ready to go, this fact will no longer mean anything to your. Simply because you planned ahead and quietly and strategically created back businesses with unsecured corporate credit financing already established.