From Inspiration to Incorporation: How to turn an idea into a business

By John Williams | Published September 5, 2012

Take a look around. What do you see?

Buildings, advertisements, televisions, computers, furniture, food, vehicles, and, of course, nature. What is absent from these items is the story and where the story began.

You may see brands, you may see the products, but how much thought do you ever put into how it all came to be?

The initial formation is especially hard to picture like the moment just before the universe began. Businesses are conceived at the moment their certification of formation is filed. It’s not intuitive to rewind the clock and think back to the moment it all began, the “Big Bang” moment where things started growing. As a British client recently told me, “sometimes the tiny acorn grows into the mighty oak.”

Each business was started by someone just like you, sitting in front of a computer, completing an online order form for a new business entity. The incorporation process is the first step into creating what “wraps” the world around us. It “wraps” your ideas, like a vessel into which your thoughts and intellectual property flow. The incorporation is the skin or protective layer of your business. Most business real estate is owned by an LLC because people incorporate passive investments as well as active businesses.

You may be hesitant sitting on the runway strip and thinking, “why do I want to take off in this jet without a flight plan?” If your business plan is still in development that is common. Few businesses have a crystal ball to foresee every step in the marathon. Much of the value is in what you develop and learn along the way. That is entrepreneurism.

For just one moment, try and imagine the founders of Google sitting in a dorm room deciding when and how to incorporate. There was probably some thought and discussion about Delaware versus California or LLC versus Corporation, but the point is that they sat there and had the conversation. From there, they made a decision and got started— opened their doors for business and incorporating was the furthest thing, even from their minds. It is just a small hurdle, but one that is easily “overcome.” Since then their certificate of incorporation has been amended many times.

Nothing about the incorporation process is beyond fixing or repair; you are not pouring concrete. After you get started, you can always move your entity to another state or convert your LLC into a corporation. Even the Facebook founders incorporated initially in Florida, before they converted their corporate domicile to Delaware.

Do not allow yourself to be stifled or bogged down making the “perfect” decision. Nothing is irreversible, decisions and missteps can be corrected later. The biggest mistake you can make is waiting too long because the protection is prospective and not retroactive. You can only protect yourself moving forward.

Almost everything surrounding you was created or produced by a company which was started by somebody who stood in your shoes at one point, teetering on the edge of a decision: to incorporate or not to incorporate? Once incorporated, what may have seemed to be a very small step for them, turned into a giant leap for their business and prosperity.

What decision will you make?

You miss 100 percent of the shots you never take.” – Wayne Gretzky

When deciding where to form your company, consider that Delaware has advantages over your home state that may benefit you. Go