Provide summary on this reading about Corporate Business Structures in couple of paragraphs:
Humans by nature are innovators and entrepreneurs. We yearn to discover our world, and push incredible boundaries to do so. We thirst for adventure, freedom, knowledge, and opportunity. Having your own business offers freedom from authority, the ability to pursue your passions, infinite financial prospects, and plenty of excitement. With today's technologies and global market opportunities, the sky is limitless.
I think the thrill of being your own boss is really the independence of having your own business, of growing it based on the amount of effort that you've put into your business.
Being the boss - it is fun. And it is exciting. And it is enjoyable to be able to get up and to plan each day.
It has thrills and it also has down sides, but I love running my own business. I love that I basically have ideas and get to carry them out.
How can you take a great product or service from concept to market? Do you have the personality to be the boss? Are you willing to risk time and money to make your dream a reality? And can you handle the physical and emotional strain of hard work and uncertainty?
It helps to look at others who have succeeded. As you'll discover, success doesn't come easy. It takes a plan, the right skills, and lots of determination. Mistakes and bad luck are part of the game, but tenacity, driven by a specific goal, along with some elbow grease, can turn a unique idea into the day when you're the boss.
Thebe Jordan's passion to shop led her to buy Eggplant, a trendy boutique that specializes in gifts and stationary.
I was a stay-at-home mom and very happy that I did that, but I also was bored during that. So I wanted a little something else. So I bought a small business, and never really realized where it would take me - which I think that's the way most businesses are. You just have to start out doing what you like to do and be flexible and see where it leads you.
Running a business is not for everyone. Some people thrive in a corporate environment, or prefer the security of a steady paycheck. Then there are those who aspire to leave the nine to five routine to spend time doing what they're passionate about. If this describes you, chances are you already have an idea for a product or service for which you feel there is a need.
Jeff Imel owns and operates Air Robotics. His company makes unmanned aircraft systems that can be used for surveillance and intelligence gathering by the military. Civilians use Jeff's flying robots for 3-D mapping and chemical detection.
I firmly believe that, do what you love and love what you do, and the money will follow. It works every time. And so for a lot of people, they think, gosh, I just want to start a business so I can have control of my life. But in my case, mine was all about taking something that I really enjoyed, which is flying model airplanes, and turning that into a business where I can make money from it. So that every day, I get up, and I'm flying model airplanes and making money.
It is important to note that while you can escape the nine to five, you will probably end up working much more, as there is so much personally at stake.
As an entrepreneur, the business is a lifestyle. And you live it. And one of the things that I have found is that many times I'll wake up at two or 3 o'clock in the morning because I wake up and I have an idea. And I've got a three by five card that sits by my bed where I can write down my ideas so I don't forget it. What's great about that is it is a lifestyle. And it's a lifestyle that I love. And it's one of those things that I think about so much that I'm excited to get up in the morning.
What does it take to be a successful entrepreneur? Risk takers tend to have certain characteristics. A self analysis is the best way to identify your own traits and how they compare. Be honest as you consider the following questions from the Small Business Administration. If you find you answer no more than yes, the timing might not be right.
Are you a leader? Do you like to make your own decisions? Do others turn to you for help in making decisions? Do you enjoy competition? Do you have willpower and self-discipline? Do you plan ahead? Do you like people? Do you get along well with others?
As the owner of a popular hair salon, Ted Brightwell sees clients, supervises staff, and is constantly working to attract and retain his customer base.
To run a business, I think you have to have, first of all, you have to have patience, because nothing comes immediate. When I first started to have the idea that we were going to get into this business, we were going to open up a salon. And we were going to build a new - not build a new building - bu we were going to rebuild a new building and do a build out. It took three months. We wanted it to happen the next day. It wasn't. There's always going to be delays.
Another thing is that you have to be - you just have to be strong-willed. You have to be able to say no. You just have to be level-headed - be able to see both sides of everything so that you can make the correct decisions.
Running a business takes planning, as well as a great emotional and financial commitment. And unfortunately, the odds are not in your favor. According to the Small Business Administration, 8 out of 10 new businesses will fail within the first three years. According to Dun & Bradstreet reports, businesses with fewer than 20 employees have only a 37% chance of surviving four years, and only a 9% chance of surviving 10 years. The old adage, people don't plan to fail, they fail to plan, rings true when it comes to entrepreneurial success.
Oftentimes business founders want to immediately get into business, and they don't want to concern themselves with paperwork or with preparation - compliance with a lot of legal requirements or legal possibilities. And sometimes by jumping into business without doing various kinds of paperwork, they lose opportunities to protect themselves they would otherwise have.
Of course, successful entrepreneurs are not the sorts to heed negative statistics and opinions. They choose to fearlessly, but cautiously, pursue their dreams. You can, too, but only if you have the right plan in place.
Before starting a business, you need to take stock of the impact it will have on your life and loved ones. As any entrepreneur will tell you, it takes physical stamina and emotional strength to handle the stress of a business start-up and beat the odds for success.
Well, of course, the initial beginning of opening your own businesses is financial. I mean, obviously, unless you just have inherited a lot of money you are not going to be able to just go out and say, oh I'm going to buy a building, and open up a beauty salon. You have to know what are the steps in order to get your own business.
We went through the bank. We went through the small business association. We have various things that we did. So, that's the first thing. The second is that you want to make sure that when you're hiring, particularly in this industry - and we were wanting to establish a, sort of, exclusive, top-quality hair salon - you want to make sure that you hire the best people. And learning how to do that hiring process is an art.
You may have to lower your standard of living until your business is firmly established to make sure you are covered for unexpected surprises. This will not only impact your life, but also those around you.
I think small businesses are great for families. When I started my business, my son was probably in kindergarten, I think, and my daughter was in elementary school. And that was one of my biggest fears, was, who's going to pick the kids up from school. And those things just have a way of working themselves out. And as long as you are willing to have people do a few things for you, I feel like my children did not suffer at all.
Another important question, do you have the skills to be the boss? What skills will you need for the business you have in mind? Have you ever managed or supervised people? Have you worked in a company similar to the one you are planning? Have you had any business training?
If you answered no to some of these questions, and feel you do not have the basic skills needed, are you willing to acquire them before launching your venture?
When you are opening your own business, a lot of it is just - occasionally you are surprised. You will find that there are things that happen that you have not been expecting. It also is good to make sure if you don't understand things, such as taxes and some of the financial aspects of it, because as hairdressers we're artists. That doesn't always enter into our mental capacity. So, for me, it was making sure that - bottom line - that I hired good people, and that I had somebody that could say to me, OK, here's what you need to do to make your taxes work. Here's what you need to do to make your budget work. And then that was a challenge to me. I had to learn how to do all of those things. I had an idea, but it was definitely much more complicated.
When Maggie Cook-Garcia has questions, she relies on the internet for answers. Her keen business skills have helped land her salsa on grocery store shelves across the country.
I took one business class, Business 101, but my biggest source for research was Google. Got online, Google everything. Google everything. Google this, Google that. And it was amazing. It's amazing the amount of information that you can get online now.
There are many places where you can find the training you need to run a business, from community colleges to web-based offerings. For example, business.gov, the official business link to the US government, provides free training and counseling services - from preparing a business plan to getting financing and more. With some homework and skills building, you will be more prepared to meet the challenges.
You need to look at your financial skills in a very realistic manner. You need to think about your management skills. Are you going to have employees? And if so, have you ever managed people before? And what does that mean? That skills can be developed? That entrepreneurs are made, not born?
And so, I believe that all these skills can be developed, and, if you're lacking in certain skill sets, then the skill becomes, OK, how do I bring in these resources? How do I bring in strengths where I may be week? And how do I put together a team that can actually execute a business and make money?
As a business owner, your goal is to deliver a quality product or service. But is your concept strong enough to give up a steady job and risk a loan or your life savings? Have you found a specific niche truly in need of what you have to offer? Successful businesses have one thing in common. They have found a niche and are filling it. Therefore, it is important in the early planning stages to identify your particular niche, and evaluate its potential.
The niche of air robotics for our products really is a chemical detection - its chemical detection, it's remote sensing in 3D digital mapping. And so, the type of companies and customers that value that type of product are going to be energy extraction firms. They are your mining companies. They are your gas drillers, and also your civil engineering firms.
Before diving in head-first on a dream, there are practical questions you must address to evaluate your business potential. Does your product or service fill a need? Is there already an existing market? If so, is there enough demand to be competitive? How will you be competitive based on quality, selection, price, location?
you have established a viable niche, you need to understand your customers' wants and desires. This analysis will improve your chances of capturing part of the market. Simply put, the more you know about your customers, the more you will know how to meet their needs.
When our clients come in, one of the first things I ask a client is, what do you do? What type of work do you do? Tell me about your environment. How would you like to dress? What types of goals would you like to achieve? And could you explain to me how you'd like to supplement your wardrobe? So it's really a great time for me to listen to my client's needs, and then to point out to her the various styles of clothing that can meet her needs.
Customers will determine the success of your business, so you must understand their needs. First, do you know who your customers are or where they live? How do you know this specific group will want your product or service? If geared toward the general public, will your business be convenient, in terms of location and parking? Do other businesses in the area help drive customers to that location? Do you have a good sense of how your business compares to the competition? What will set you apart - pricing, promotions, location? Most important for a long-term success, what will keep customers coming back for your product or service time and again?
We do a lot of research with universities. In food science departments at universities, we give the product out to students to try. We do case studies, research, and things like that. Based upon our findings, then we have more power to go to the supermarket and say, hey, listen, look, we have these studies made, and we think it would go work great with you. The biggest challenge with my type of product in the supermarket is the fact that everybody is fighting for shelf space. So you have to have a good product to earn some spot on the shelf.
Once you have explored the market and determined the need, you must decide on a business structure that best suits your product or service. Will you be the sole employee, or will you need to hire others? Will you initially work out of your home, or is there a need to rent or lease a space? Does your business have to meet certain codes or regulations? Will you be partnering with someone else? Asking these sorts of questions will help determine the type of business entity that best works for you.
For example, if a person or a group of people go into business as a sole proprietor or as a partnership without any other preparation, that owner, or co-owners, operating without any liability protection of a corporate shield are automatically and personally liable for all the debts of the business.
There are three basic types of business structures - sole proprietorship, partnership, or corporation. A sole proprietorship is an inexpensive way to get started, as there are only minimal fees to obtain a business name and certificate. This is ideal for those starting out with limited funds and preferring absolute authority over all business decisions.
But with advantages come disadvantages. Sole proprietorship is the easiest legal structure to engage when you start business. The danger comes with, you're liable for everything. You're personally liable. It does not particularly separate the business from you personally, but it is the easiest to acquire a license for.
There are different types of partnerships, the most common being general and limited. A general partnership can be as simple as a written agreement between two or more people, while a limited partnership limits the personal liability of each partner to their capital investment. In either case, it is important to get legal counsel and clarify roles and responsibilities, so there aren't misunderstandings down the road.
In a partnership situation or in a co-ownership situation, it's very important to trust and support your partners and to understand where your boundaries are in your role and their role. And it's critical that you have that respect, support, and understanding of the boundaries of the various partners and co-owners that you might work with.
The most complex business structure is a corporation. And there are varied types. There are general corporations, Subchapter S. corporations, and another common structure is a limited liability corporation. A general corporation is the most common structure. In this case, your company would be a separate legal entity, owned by stockholders. You can have an unlimited number of stockholders, and they are protected from the business' predators. An advantage is that your personal assets are protected from business debt or liability.
General corporations are more difficult. You pretty much have to - you need to have somebody to help you with those steps. It's important for you probably to have an attorney to help you with those types of papers. But there are pluses to that. If you grow a large business, that way your personal assets are protected.
A Subchapter S. corporation is a general corporation with a special IRS tax status. Subchapter S. corporations are mostly used by small business owners who prefer to be taxed as if they were still sole proprietors or partners. It provides a way to combine the tax advantages of a sole proprietorship, or partnership, with the limited liability and enduring life of a corporate structure. There are pros and cons to an S-corporation. The pros are tax savings, business expense tax credits, and an S-corporation allows a business to have an independent life separate from its shareholders. This means if a shareholder leaves the company, the business isn't disrupted much. The downside to an S-corporation is there is a stricter operational process and shareholder compensation requirements.
And finally, an entrepreneur can form a limited liability company, or LLC. This is not a corporation, but it offers many similar advantages to an S-corporation, with added flexibility for managing the business, and with fewer S-corporation ownership restrictions.
A limited liability corporation, nowadays, that's kind of the preference, because it's fairly easy to obtain and there is a little bit of protection there.
Once you've determined the most appropriate business structure, you will need to develop a business plan. This will be the foundation of your company for years to come, and you will revise it often as your company grows, using it as a road map to keep you focused on your goals. A business plan is also useful for raising capital or obtaining loans.
If you don't have a business plan, a solid business plan, you just will not be able to get the loan. It is critical for obtaining a loan. What that does, it shows that you really thought out the process of doing a business. It talks about the experience you have in the business. And you've got to convince the bankers to lend you the money.
Business plans come in all shapes and sizes, and there are no firm rules on how to craft them. You can review sample plans in a similar industry, many of which can be found online. But in general, business plans contain five main components - an introduction that briefly describes your business and its goals, including ownership and legal structure, highlight your experience, and the advantages your company will have over competitors.
Next, a marketing section that identifies the customer need for your product or service, as well as your market size and location. Also, describe your marketing and pricing strategies.
A financial management section should explain how you plan to fund your company and the initial amount of equity capital. Potential investors, or lenders, will want to see a monthly operating budget and expected return. So, calculate a projected monthly sales volume, including any expected seasonal trends. You also need to describe how your business will operate on a day-to-day basis, covering personnel issues, insurance, rental agreements, equipment needs, and anything else relevant to your specific business.
Finally, summarize your goals and objectives while emphasizing your commitment to success.
A business plan competition came my way, crossed my path. And I determined that I was going to enter that business plan competition and just see what others would think about my plan. And so sure enough, I entered it, and I went through that entire process. It was about a three month process. And about a week into the business plan competition, I learned how little I knew. And I learned how little was in my head. And I began to realize that, boy, if I don't put together a business plan, all I'm doing is just increasing my chances for failure.
You have identified your reasons for wanting to start a business, and analyzed the market to determine there is indeed a niche for your product or service. You have also decided what business structure is best suited, and have written a comprehensive business plan. Planning a business can be daunting, but it will make you better prepared for when you're the boss.
Start small. See results. Grow with results. That's how we do it.
When I decided to become a business owner and to open up my own business, it was frightening. But at the same time, it was really exciting. And then in the process of doing it, it became more exciting. And as I have been a business owner, it stays exciting. It stays - I like it.
There's a lot of great things about owning your own business. And I think for different people, they'll have many different reasons for why they want to own their own business and the great things that have come out of it. I enjoy the freedom that comes with owning your own business.
Job stability is not promised to anyone. I think the younger you are, the more you should focus on what can I do to create the wealth for myself, my family, and to really leave a legacy behind.