In the present times, full of instability, with lay-offs and downsizing becoming a norm there are a lot of individuals who have turned the tide in their favour by starting off a business venture of their own. Starting off one's business is rewarding endeavor as you have the reigns of your destiny. It's no longer about being accountable to anyone or dealing with office politics but it just happens to be a one-man show.
There may be any number of reasons why you would want to start your own business. For instance, if you have a baby, you might want to start your own business to be able to stay at home. Or, you have to care for a spouse, sibling, or parent and need to have the flexibility in your work timings. Working from your home provides that kind of flexibility and you can fulfill other responsibilities without affecting your work life.
If you're looking to begin your own business, you may choose from a variety of options such as open a retail outlet or become a consultant in your field of expertise. Once you take the initial step, you will be on the road to success, regardless of what goals you wish to pursue. The key to success is to grab the first opportunity that comes your way. You will have no regrets of missing the boat later on.
If you intend to have a business at any stage of your life, it is advisable to do some savings right away, as business requires investment. You can expect to reap harvest, which are profits in this case, only if you sow the seeds, which is the money for investment. You can also check if you qualify for any business related loans. There are many grants also available for the people who are interested in opening a home business.
The choice of the business you are going to get in is governed by factors such as the investment of time and money. For instance, as a norm the businesses such as retail, restaurant or hospitality will require a greater investment.
There are certain business that happen to be a relatively safer bet, such as selling brands like Avon, Tupperware, Pampered Chef, or Mary Kay. These happen to be reputed brand names and the individual's stocking these products can sell these in home parties, shows, or even post them on the Internet. Thus with such a business in place, it is easier to maintain a fine balance between both personal and professional life.
One of the effective tools of marketing is by putting your network of friends, family and co-workers to build a feasible base of clients. The higher the base you are able to garner for yourself the greater is the scope for profits. However, once you have secured your client make sure that you have ready solutions for the clients.
If you decide to run a business from your home, make sure you delegate a specific area of your home as a business area. Whether this is a table, corner, or entire room, this business only area will ensure you treat your home as a business. Additionally, this business only area will allow other individuals to provide you with privacy necessary to do any business related tasks. Many entrepreneurs find themselves easily distracted by children, friends, spouses, or family members who disturb them during work time.
No-one can make the right decision for you about how to set up your business structure; this decision lies entirely in your hands. However, it is always wise to err on the side of caution rather than to find out at a later date that the person you thought may be the ideal partner in your business because he/she is an old and trusted friend, may not only break the business apart over a misunderstanding but could result in the loss of a good friend or even a broken marriage. Nothing can place strain a marriage more than financial worries when a business goes wrong.
Clearly define the structure Clearly defined contracts and agreements are essential if the business is to survive with the least complications during times of tension, disputes or hard times. As with all legal issues, we recommend that you seek expert advice before entering in to any contract.
Whether you are considering becoming a sole trader, partnership or want to form a company there are a number of important considerations you must take into account and this article only touches the surface.
Sole Proprietor As a sole trader, the responsibility for all loans, paying creditors, production costs, marketing, falls exclusively and entirely on your shoulders. This means in the event of your business falling onto unforeseen hard times forcing you into bankruptcy, you may have to sell off personal assets to pay your creditors.
Taxation will be payable on the profits of the business usually at a higher rate than a company would pay. In addition taxation would also be payable on the personal income you derive from your business and any other external income sources. Most sole proprietors would opt for this structure as it is the easiest and the least expense structure to set up.
Partnership A partnership is legally defined as 'the relationship that exists between persons carrying on a business with a view to profit'. A partnership is for two or more people involved in the business and is legally binding whether verbally agreed to with a handshake or in a complex written contract. Taxation on the profits of the business is split between the partners thereby spreading the taxation liability. Personal taxation must still be met by each person in the partnership. Although there may be no requirement for a legally structured contract in some countries, a written contract is recommended for a partnership agreement and signed to ensure the commitment of all partners are clearly defined and misinterpretation is avoided.
Information that should be included in the partnership agreement:
?Personal details, names, addresses. ?How much each partner is going to contribute to the business - both financially and physically. ?Bank account details of the partnership. ?How profits and losses are to be shared including assets. ?How much will each partner be paid by way of salary? ?Division of duties and responsibilities. ?Dispute resolution processes. ?Succession details. ?Closing down the business.
Company Structure A company is a business structure created through incorporation under a government act. It is a separate legal entity and complex to start up but offers the greatest benefits as a business structure.
A new company can be formed or an existing shelf company can be purchased from an accountant or solicitor. The latter option is cheaper however, some existing debts may be attached to the shelf company ? always ask for a guarantee that the company is free of debts before you sign anything.
In a small business it is not unusual for company shareholders to also be the directors and manage the company affairs. A sole proprietor can be the only director and shareholder and is considered an employee of the company and paid a wage accordingly. Annual financial reports must be made available and the compliance requirements are far greater than in the previous business structure.
Family Trust A Trust is where one person known as the trustee holds and administers property placed under their control for the beneficiaries of the trust. If you are considering this form of business ownership it is wise to consult an expert to set up the structure as it is quite complex and as previously pointed out in the company structure, you maybe able to purchase an existing shelf-trust but need to get a guarantee that you are not buying any old debts.
Co-operatives A co-operative is an association of persons who voluntarily join together to meet their economic and social needs through a jointly owned and democratically controlled enterprise'. A co-operative society is eligible to be registered if it is formed on the basis of 'Principle of co-operation'. Co-operatives can be in the form of purchasing co-operatives or producer co-operatives. The conditions of forming a co-operative may vary from state to state and country to country and are quite complex with reporting requirements similar to that of a company.
Franchise This is where a business structure has already been tested and the every day running of the franchise is laid down as a specific, set format that must be followed. You may in this way purchase an existing business. However, for the benefit of having a set proven formula to follow, you must forfeit some of your income to the owner of the franchise
Going into business is risky, however, knowledge, understanding and adequate research should give you a decided advantage. If you don't know, say you don't know and ask for assistance.
All the above are only a brief overview of the business structures available to you. You are the only one who best knows what would suit your particular needs. However, I advise that you research very carefully the ramifications of setting up any one of these structures before you forge ahead into the world of small business.
Both Vlad Ehrsam & Marion Drazil are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Vlad Ehrsam has sinced written about articles on various topics from Joint Venture, Brochures and The Internet. Vlad Ehrsam is the chief writer for, and editor of , there's a wealth of knowledge on the website, plus why not sign up for the free Business newslett. Vlad Ehrsam's top article generates over 74000 views. to your Favourites.
Marion Drazil has sinced written about articles on various topics from Education, Small Business and SEO Search Engine Optimization. Marion has a background in business development, training and business planning. Her focus is on helping people within the craft industry to reach their full potential and achieve their personal and business goals.Visit her websites for more information.. Marion Drazil's top article generates over 14800 views. to your Favourites.