Why Business Structure Matters

The way you structure your businesses can have an effect on many aspects of your business. Everything from daily operations to taxes and how much of your personal assets are at risk is affected by the business structure you choose. You should choose a business structure that provides the appropriate balance of legal safeguards and benefits. It could be that you need some legal protections or the possibility to pass on your business in the future.

Here are some of the most common ways you can structure your business:

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Sole Proprietorship

A sole proprietorship is simple to establish and gives you complete control over your business. It is called a sole proprietorship because it is owned by a single person. The person owns all the assets and liabilities of the business. If you conduct business but do not register as any other type of business, you are automatically considered a sole proprietorship. When running a sole proprietorship, you don't have a business entity. So you can be held personally liable for the debts and obligations of the business. It's hard to raise money because you can't sell stock of the business. And banks are a little hesitant to lend to sole proprietorships. Sole proprietorships are perfect for low-risk businesses. If you want to test your business idea you can form a sole proprietorship, and then later convert it to a corporation if you want.

Partnerships: General Partnership & Limited Partnership

In order to establish a partnership all parties involved will need to be in agreement. You will not need to file with your state for permission. In a General Partnership there can be an unlimited number of general partners whereas in a Limited Partnership there can be an unlimited number of general and limited partners. Each partner in both types pays taxes on their share of the income. They will also be able to deduct losses against their other sources of income. Businesses with several owners, professional organizations (like law firms), and those looking to test out a potential business idea before forming a more formal company may find that partnerships are a useful option.

Limited Liability Company (LLC)

Because it enables owners to benefit from the advantages of both the corporation and partnership forms of business, the limited liability company (LLC), a hybrid type of partnership, is becoming the more preferred business structure. Profits and losses can be distributed among owners without the business itself being subject to taxation, and owners are also protected from personal liability, which is a benefit of this business structure. It is best to create an operating agreement that will outline management practices. You will also have to file with your state in order to get your LLC up and running. 

Corporation

By submitting incorporation papers to your state, you can create a corporation, which is another type of business entity. There are several ways in which corporations are different from sole proprietorships, partnerships, or LLCs. Shareholders, directors, and executives make up a corporation. The directors oversee the whole business and create policies, the shareholders control the company's stock, and the officers manage daily operations. In a small company, one person may play several different roles.

A corporation is a separate legal entity from its stockholders, thus they are not held personally liable for the corporation's debts (the shareholder liability is limited to shareholder investment). In addition, corporations are subject to a number of legal restrictions that do not apply to other business entities such as holding frequent meetings and bookkeeping maintenance. 

It is crucial to have a fundamental awareness of the various advantages and disadvantages of each kind of business entity. Making an informed choice can be aided by understanding the differences between business structures. A good place to start the process of deciding what structure is best for you is to consult with your local small business development center. The resources you will find there will typically be free and more detailed. This is a great way to start your journey in finding the best business structure that will meet your individual needs and vision. 

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How to Start a Business With No Experience Required!

Starting a business is a big decision. It can be exciting and full of promise, or it can be daunting and full of risk. There are a lot of factors to consider when deciding whether or not to start a business, including the cost of starting up, the potential for success, and the time and effort required.

 

When deciding whether or not to even start a business, determine your "why" for wanting to start it in the first place. Do you have untapped creativity that can potentially be monetized that you have not brought to fruition yet? Are you tired of the running around, hustle and bustle of your 9 to 5 and just want to free up time for you and your family? Do you want to offer opportunities for community development? Or do you want to leave a generational legacy behind for your loved ones? Let your "why" be the motivating factor that moves you to keep going on the journey. Be consistent in your efforts!

Another place to start when deciding to start a business is by doing your own research to understand your industry. This means talking to people in your industry, reading industry publications, and consulting with experts. It’s important to understand the trends and how your industry is changing so you can anticipate what challenges you may face and what opportunities exist. Never stop learning, there is always room for improvement. Lean on those who have "been there, done that" and learn from their mistakes. They may be willing to take you on as their mentee. If there a particular skills you should have in your niche, go out and get educated on those skills. Start with free local resources in your area such as the small business development center or city offices. There may also be plenty of free resources on the topic online. 

Using free resources and mentors will potentially lead you to a better understanding of your industry, and will give you knowledge of the importance of  your target market. It will help you understand what potential customers want and need. You can also talk to your target market and observe their behavior. You can use market research tools to help you identify your target market as well. These market research tools will be determined according to your chosen niche. 

Develop a business plan. A business plan is a document that outlines your business goals, strategies, and plans for achieving them. It can help you determine whether starting a business is right for you, identify potential risks and challenges, and help you make informed decisions about how to proceed. 

Here are a few key steps to developing a business plan: 1. Define your business goals. What do you want your business to achieve? What are your long-term goals, and what are your short-term goals? 2. Identify your business strategy. A successful business plan includes a well-defined strategy, measurable goals, and timelines. What will you do to achieve your goals? What are your key objectives? 3. Finally, the plan should include a detailed financial analysis to determine whether investing in the business is financially feasible. It may also determine how your business will be funded in the method that will work best for you. The ultimate goal for anyone who wants to start a business is getting to profitability as soon as possible. 

Get started! Put together a team of motivated individuals, start budgeting and planning for marketing and advertising, and get to work. Once your business is up and running, depending on profitability, you may want to consider automating or outsourcing all or parts of your business operations. Stay consistent in the beginning. Don't give up and eventually you may have the opportunity to decide whether you want to have an active or passive part in your business. You may also be able to scale or expand your business. Put forth the hard work up front and you won't be disappointed! Here's to a retirement that you get to decide whether you want to work (for yourself) instead of deciding that you have to work (in that 9 to 5). 

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I am starting a Blog!

Well I am going for it! I started Blog! I want my blog to be an authentic journey of life: my past experiences and how I learned from them, people in my life that are important to me and what I've learned from them, my creative mind and the new things that I want to learn about and try. The subject matter may vary depending on what project I am working on, something I am getting into and learning, life's lessons, ways I can help strengthen others through collaboration and teamwork. 

I am a product of the great Generation X so I have plenty of experiences behind me that I have come through and learned from both personally and professionally. Some of the subject matter I would like to dabble in is a variety of genres of music, health and nutrition, exercise and fitness, education, family and relationships, jobs and careers. I plan to talk and blog about the things I have been through and have knowledge about in these areas. 

Even though I am a Gen Xer, I don't consider myself "old"; I am seasoned. I hope that some of my knowledge and experiences will help others be strong in their lives. One of the things I advise is don't ever stop learning new things. There are areas that I have wanted to learn about and implement for many years, but for some reason or another, have always been held back in different ways that I will reveal in time. 

But I am in a new chapter in my life and am in a position to learn and implement some of the things that I mentioned. Some of these areas that I am beginning to learn about are different niches in real estate, side hustles for extra income and starting a business, investing in different niches and setting up for retirement and leaving a family legacy behind. 

This is just the beginning so I hope to meet new and interesting people that I can learn from. I hope that I can help others along the way as well. I am just a regular human being trying to figure it out. LOL; aren't we all? See ya soon! Till Later!