So you have decided that you want to start your own business. Great! That is a fantastic idea. But it doesn’t happen overnight. Maybe if you were living in the early ages, you could think about it one day and start selling your product the next. But in the new world of business and commerce, there are different structures that you need to know about, choose one and follow it until you decide to make a change. Here are a few business structures to get you started.
Sole Proprietorship: As the name suggests, it means you are bartering your products all by your lonesome. You own the venture and you have put in the capital yourself. The best part about this is that you get to make all major decisions yourself. You own the assets and liabilities of the firm and you are the boss! Another great point is that you take sole responsibility of the risks. If you take a decision and it works out, you get complete benefit of the profits. If your idea fails, well, you take responsibility of that, too. This type of structure is great if you are just starting out and have a handful of ideas that you want to work with. Once your business starts expanding (and of course it will, don’t worry), you can always change it and maybe bring in a partner or partners to help you out.
Partnership: This type of business structure is great if you have someone else to help you build this venture. There may be one or more partners, and the great part about this is that you get to decide who takes how much responsibility and share in the profits (or loss). An important point to remember is that the people who will be your partners need to have a similar frequency with thoughts – if there is someone who wants to go at warp speed ahead or another partner to likes to take the safe route, then you will find yourself in trouble. Check with a legal expert to determine which type of partnership suits your business.
Corporation: Once your business has expanded greatly, it will have an identity of its own and not be about you and your partner. So if a customer is dealing with a product that is manufactured by your corporation, they will address the company by name and not the owners individually. This is one of the best forms of business that you could have because now you do not need to put in personal hard-earned capital. You can invite the public in the form of shareholders to contribute and be a part of your growing venture. Yes, the cost of running a corporation is much higher than the small-time sole proprietorship or the medium risk partnership business structure. But who wouldn’t want to share their dreams and work with the community at large?
Whatever your decision is to start a business, make sure that you set a concrete blueprint, planning for contingencies and other aspects. Running your own venture is exciting, but it comes with a lot of responsibility – the main ones being financial and legal. You can build a team of experts to help you out, because ultimately, you are the boss and this is your company!
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