It is money that makes money. A corporation has a lower tax rate than an individual. Earn a profit, give the government a relatively small cut, and then put the profits to work earning more money. “Crafty Consultants, Inc.” has built up $40,000 in retained earnings over the past few years.
Starting a new business is an extraordinary act, carried out despite claims of high failure rates for startups, discouragement by friends and family, and high uncertainty. The conventional wisdom concerning failures of business startups commonly quotes failure rates ranging from 65% by the third year to 90% in the first year.1 How then does anyone dare to start a new business?