Remember Jessica Alba? The phenomenal actress who played Sue Storm from Fantastic Four or Max Guevara in Dark Angel? When she founded The Honest Company in 2012, I'll admit, I had my doubts. Here was a Hollywood actress venturing into the world of business – it seemed like a bit of a stretch. Perhaps you, like me, initially questioned her entrepreneurial aspirations.
However, Alba's journey underscores a crucial truth: until your business is officially established, many might not take your entrepreneurial vision seriously. Sure, friends and family might praise your creative ideas, whether it's artisanal jewelry making, beekeeping, or all-natural bug spray. But without the legal formalities in place, most will likely still see it as a hobby, not a legitimate business.
The Honest Company founder and chief creative officer Jessica Alba and CEO Nick Vlahos
ring the Nasdaq Stock Market opening bell on May 05, 2021, in New York City to mark the
company's IPO at NASDAQ MarketSite.
Fast forward a decade, and Alba has silenced the doubters (myself very much included) in spectacular fashion. The Honest Company went public, with Alba's stake valued at nearly $130 million. At just 40 years old, she became the youngest Latina ever to take a company public. Now in April 2024, she announced via Instagram that she stepped down as Chief Creative Officer. Alba remains involved as an advisor for the sustainable consumer products brand she helped build, while she takes on new endeavors. Alba's journey is not just a tale of personal triumph; it's a testament to the power of taking decisive action. By formally establishing her business and relentlessly pursuing her vision, she transformed her entrepreneurial dreams into a multi-million dollar reality. Her story underscores a crucial truth: credibility in the business world is earned through action, not just ideas.
Seriously, who is going to doubt her business acumen today?
Gain Credibility by Taking Action
The good news is there are ways to combat this skepticism. The quickest route to establishing credibility is to register your business with the state officially. Obtain the necessary permits and licenses, develop a strong brand identity, and, most importantly, start generating revenue. I'll repeat, START GENERATING REVENUE!
This formality isn't just about impressing your inner circle. It's about gaining legitimacy with banks, creditors, landlords, and other crucial players. They typically won't treat your business as viable until it's been officially operating for at least two to three years. Imagine the difference when you say, "I'll have to talk to my CPA" – it will resonate with them on a whole new level.
Formalize Now, Even for a Side Gig
Even if your entrepreneurial dream is currently a side hustle alongside your full-time job, there's no reason to delay formalizing it. Just be meticulous about keeping your business activities separate from your main job. Building business credit history and credibility takes time, so the sooner you begin, the better positioned you'll be for future success.
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Believe it or not, formalizing your business from the outset can even open doors to unforeseen growth opportunities. This is especially true in highly regulated industries. Take it from me – I learned firsthand the importance of having an established business entity when trying to obtain commercial insurance for a transportation company I hadn't even named yet!
Take the Leap and Formalize Your Dreams
Whether your long-term goal is transitioning from freelance work to a brick-and-mortar store, expanding into new markets, or something entirely different, officially establishing your business early on lays the groundwork for that future evolution.
Jessica Alba's story is a powerful reminder that it's never too late to take an entrepreneurial leap, even into a surprising new arena. If you've been harboring dreams of business ownership, let this be your wake-up call! As the saying goes, the best time to start a business was yesterday. But the second-best time? That's right – today!
If you have any comments or want to share your thoughts, feel free to comment below or contact me directly for advice. You can Follow and DM me on X @AbeTheAIGuy.