CHOOSE YOUR BUSINESS STRUCTURE:
A COMPLETE GUIDE
To establish and maintain a successful company, you need not need an MBA or other formal business skills. However, you will need to make crucial choices from the beginning, beginning with your corporate structure and seeking help from a business consultancy firm like Suivant Consulting.
WHAT ARE THE MOST PREVALENT CORPORATE STRUCTURES?
The most prevalent business structures include sole proprietorship, partnership, LLC, and three kinds of corporations:
- conventional corporation (C corporation)
- small business corporation (S corporation)
- benefit corporation (B corporation)
WHY IS COMPANY STRUCTURE IMPORTANT?
You may obtain money from venture capital firms if you choose the right business structure for your firm.
So, structure matters a lot.
This tutorial will explain the principles of typical company structures, but we can’t advise you which one to choose—you need to see a lawyer or perhaps an accountant for that.
Solitaire is the simplest business structure. If you don’t form a legal entity for your firm, it’s a single proprietorship. Any business name or trade name may be used, even your own.
The key benefit of a single proprietorship is its simplicity and low cost. However, it does not establish a legal distinction between your personal and corporate assets. If you’re sued or your firm fails, creditors might seize your assets.
WHAT IS A SOLE PROPRIETORSHIP?
If you wish to work for yourself and manage your firm, a sole proprietor may be correct for you.
A single proprietorship would be ideal for a trainer who plans to instruct customers one-on-one. So would a jeweler sell exquisite unique pieces on Etsy?
CREATING A SOLE PROPRIETORSHIP
A single proprietorship is indeed the simplest to set up, requiring no formal registration.
So you sell your handmade jewelry on Etsy? You are now the alone owner.
Depending on your business, you may still need to get licenses, permissions, and permits. Check the website of your county secretary of state.
Also, if you want to conduct business just below a name other than your own, you must submit a DBA (doing business as).
Check out this post for instructions on acquiring a DBA and registering your company name before you start.
REALISTIC NEEDS AND GOALS SHOULD BE SET FOR ONESELF
One of the most common causes of company failure is naivete. As a result, I’ve heard several examples of individuals wasting thousands of dollars on advertising only to end up with nothing at all in return.
Let’s imagine what a real-world situation may look like. The first year of business is a time of failure. Why? Because this is your first company.
Most individuals are overconfident when starting their first company. That person can do it, and so can we, you casually think. That person is either in his fourth company or has been operating it for seven years, but you don’t give it a second thought.
When individuals start learning how to create a company, their enthusiasm is contagious. Those who expect to rule the globe on day one are doomed to fail within months owing to severe disappointment.
Successor failure in business depends on one’s ability to stick to their goal. What if you don’t have any clients or visits to your website after a month of advertising your business? You need to be able to tell when a plan isn’t going to succeed. In addition, are you patient enough to play the long and steady game (meaning that you may not see immediate sales but will eventually reap more rewards)?
HOW ARE YOU GOING TO APPROACH YOUR GOALS?
Maybe instead of getting a customer for the first time, you might concentrate on attracting visitors who are more likely to become customers in the future. If you’re going to establish a company, you may want to cultivate a following on Instagram before you do so.
There is an exciting journey ahead of you now that you have learned how to establish a company.
To finally grab the bull by the horns and take that initial step might be a little frightening. Starting a company may be a lot of fun, but once you get going.
The path to success will be paved with obstacles, but if you keep moving forward and learn from your errors, nothing will stand in your way.