Do You Have a Small Business or are You Thinking of Starting One?

Did You Know that Certain Kinds of Business Structures Can SAVE you Money and Time?

Which Business Structure is for You? The Answer to This Question Could Save you THOUSANDS of Dollars!

In the good old days, people who had cows and fields were farmers, people who sold the cows were butchers and people who bought the meat paid for it with money raised from whatever they did. Carpenters, entertainers, shopkeepers and even undertakers all worked for themselves in their own small town. In modern times, with nationwide and international companies all fighting for the same business it's a little more complicated when starting small business. Business opportunities aren't as easy to come by these days, there already is a butcher in every town, let alone the fifteen supermarkets in the area, so how do individuals like yourself get underway, become competitive and become a success. Just like the old song said, money makes the world go around, and you can raise money from more places than just your savings and this introduction to becoming a business corporation should set you on the long rocky path to becoming a magnate of industry, and possibly a millionaire in a couple of years.

Are you Starting Small Business?

So maybe you don't want to be a butcher (or a farmer for that matter) but you do have a great idea and you can see one or possibly many business opportunities out there that you can get a hold of and start making profit from. It doesn't matter what the business will be, whether it be simple property management through to retail or services, you need to have a firm idea that you strongly believe will turn a profit within a couple of years. Whoever thought of the pet rock was a genius, but he thought of that and it won't ever be repeated in the same way. If you are a budding inventor who has worked away in the basement for years, be sure to protect your hard work with the necessary patents, but before you spend more time and money on your reinvention of the spoon, now is the time to start asking friends and relatives for their honest opinion on your product. Regardless of whether you have a brand new product or are starting small business that has been tried and tested elsewhere, you need to have a firm business strategy. It can be daunting at the start, but making business opportunities count is why we're here. Don't get put off by the paperwork and planning involved, it is all just part of the journey in making a success of your own business.

What Business Strategy Should I Use?

It is all very well having an idea to sell snow to the eskimos in your head, but it doesn't mean a thing until you can get it down onto paper. Unless you're already rich enough to start a business, you are going to need to find investors, and to show that you mean business (literally) you'll need to be able to show them exactly what your idea is, who is going to run the business, where the market is, who the market is plus projected figures for the next three years. Where are you going to find all that information? There are plenty of resources available for new business opportunities, your local library is a great start, friends and family who already run businesses will be willing to help you decide what are reasonable expectations; there are a million websites full of information about markets and the economy. Most importantly it is your passion for your dream that will convince people to invest money into your new business, the trick in writing your business strategy is to get that over on paper as well as that important meeting. Even before you've visited your first investor, you need to think about business incorporation.

What is a Corporation and How Does It Apply to My Business?

A corporation, put in simple terms, is a form that your business can take to distance yourself personally from your clients. If you are starting small business you could do so as a sole trader. For example, 'John Hancock Butchers' would simply be John selling meat directly to his customers, using his money to buy meat, taking full responsibility for all profits and losses he made on those goods. There are upsides to this, as a sole trader he has no-one to answer to and no-one to share profits with, but if a supermarket opens next door that sells meat at half the price and sends John out of business, he has to personally take responsibility for his debts to the meat suppliers, which would involve all of John's personal assets being at risk of repossession.

Another way to start your business is to invest in business incorporation. Even if you are in a position to start a small business without investment capital from outside, if your company doesn't succeed the only liability that you would have to your creditors would be the initial investment that you made when the business was first started. In other words, your company might go out of business, but your personal assets would not be in danger.

The other huge advantage of becoming a corporation is that you can raise money from outside investors.

We didn't all get rich by the time we were twenty one, nor did a rich rock star bequeath millions of dollars to us in their will. When starting small business there is a great deal of cost involved; premises need to be found and paid for, goods, materials, stock, transport, staff, marketing and insurance are just some of the hundreds of costs that you will be faced with almost immediately, so how are you going to raise all this money? Well remember the business strategy that you are going to write? When you show that to people they will hopefully be so amazed that they will give you the money upfront, in return for shares and therefore a share of the profit that your business makes. They are protected by the same exposure to liability that you are, in that they cannot be held responsible for losses made past the price they paid for the shares. If your business does very well, the share of profit paid each year, or the dividend, will be higher. If shares in your company return good dividend they will become more valuable and may be sold on to other parties. This is one advantage over LLC formation (limited liability company formation), where it is a lot harder to transfer shares from one person to another.

Incorporation is an additional expense at the start of your business and you may not see it as a necessary step at this time, but with its long standing and proven formula for business management and creation, you'll be glad that you did it from the start; otherwise you might not get your business off the ground at all.

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