If you are looking to start or expand your own wedding planner business, it is important to consider which business structure is best for you. The wedding planner industry is competitive, and you do not want to be caught out choosing a business structure that will be financially restrictive or prevent you expanding when the time comes.
It is, however, equally important that you avoid the unnecessary financial costs associated with choosing an inappropriate business structure. When walking the proverbial tightrope between personal liability and low costs or no personal liability and high costs, you should first speak to your accountant about your financial circumstances.
Should I choose a sole trader business structure?
A sole trader business structure is the easiest to create and run, and may best suit your wedding planner business’ early stages. This is an ideal structure for many wedding planners, as you will have complete control over how you run it. Consequently, your business will reflect you as a person.
As a sole trader, your business is legally indistinguishable from you, and this brings with it an equal number of benefits and concerns. A notable benefit is that you will have direct access to all the profits from the business immediately to spend as you see fit. This will provide you with greater financial control to invest as much or as little into your business.
However, the largest deterrent for choosing a sole trader business structure is that you will be personally liable for any debt incurred by your wedding planner business. When making a business decision, you will always need to be aware of the personal financial cost you will bear.
Should I choose a company business structure?
Alternatively, you may consider operating your wedding planner business through a company business structure. This is, undoubtedly, the most effective way to establish yourself in your industry and preserve your competitive advantage. A company structure can allow you to take business risks without being deterred by personal liability if they are unsuccessful. You should first speak with your accountant to determine if a company is best suited to your financial circumstances.
Although it is an easy and relatively inexpensive structure to set up, it is taxed at a higher rate and has ongoing disclosure obligations.
A company is a separate legal entity, which means that all debt incurred by the company will remain with the company. At worst, if your company goes into liquidation, provided you have behaved acceptably as a director, your assets will not be available to satisfy its debts.
It is important that you understand which business structure best suits the needs of your wedding planner business. Should you have any questions about business structuring advice, or need advice on setting up a company for your wedding planner business, please get in touch!