Sometimes, you meet a client who’s truly larger than life. About a year ago, I started working with an entrepreneur with a HUGE personality and a business that was a staggering success. Like so many of us, she started her business as a micro-entreprise and it wasn’t working; it was exploding.
She’d already breached the turnover ceiling once, and as she headed towards the end of her second year, the ceiling was just a tiny spot in the distance. She knew a change was necessary, but she was reluctant. Her priorities were:
- Simplicity: She loved the low administrative burden.
- Cash Flow: She wanted immediate access to the money she earned.
- Focus: She wanted to concentrate on her clients, not on paperwork.
Her fear was that moving to a “real” company structure would drown her in complexity and reduce her take-home pay. The reality though, was that by staying put, she was on track to pay significantly more in tax and social charges than necessary.
Our Strategy
It was my job to show her that this simplicity was starting to cost her – a lot. We had a couple of very frank meetings (she definitely calls a spade a spade!), where I laid out the numbers and I recommended she give the EURL a go. It’s a structure that offers more flexibility and protection once your revenue grows. She had doubts, especially about the administrative side. With many overseas clients, she had a complicated back-office situation and wasn’t convinced an online accounting app could handle it.
Despite her reservations, she took the leap. She booked a meeting with the online accounting firm Dougs and officially created her company. At first, she even asked if I would help her keep her accounting records up to date, certain it would be a headache. “Give it a couple of months,” I told her. “See how you get on.”
The Result: More Flexibility and Complete Control
I checked in with her a few weeks ago and her response was even better than I could have hoped for. It’s the perfect outcome!
- She spends a grand total of 20 minutes a week on her accounting.
- She has the flexibility to draw money from her EURL whenever she likes.
- Best of all, she can protect the profits she doesn’t need for personal use from income tax and social charges by leaving them in the business, letting her company build value.
This client’s experience is a perfect illustration of a critical business lesson: as your business grows, your legal and financial structure must evolve with it. Don’t let the fear of administration cost you your hard-earned money.
Want to understand if the EURL is right for you? I explain it all in Part 2 of my ebook, “The ABC of French Business Structures”.