February 24, 2014
The videos were very informative and outlined the necessary steps to start a business. Planning is key to starting and maintaining a successful business. Individuals interested in starting a business must determine the type of business they will start, the target market, and demographic. Due diligence must be done by starting with a comprehensive business plan. There are three types of business structures an individual can decide to partake in. These structures are sole proprietorship, corporations, and partnerships.
Sole proprietorships are the easiest business structure to form. This business structure is the least expensive to obtain a license. Individuals who start sole proprietorships have complete control over the business. Unfortunately, sole proprietorships also have disadvantages. Individuals who use this business structure are often personally liable financially for the failure or success of the business. If the business fails, creditors can sue the owners to recoup their losses. A failing business may financially ruin an individual if not adequately prepared financially. The next type of business structure is a partnership.
Partnerships are a commonly selected business structure. There are two types of partnerships; general partnership and limited partnership. A general partnership can be as informal as a written agreement between parties. In a limited partnership, liability can be limited to the amount the partner has invested in the business. For example, if two brothers go into business and each invest 10,000 and a few months later the business is not successful each brother is liable for 10,000 each because that is what they initially invested. In partaking in a partnership, it is important to know who you are going into business with and each person know must know their individual role. My husband and I often talk about our future goal of owning our own business and we both know who would assume certain roles in the business.
There are several different types of corporations including general corporations, subchapter s corporations, and limited