By PJ & Dave Stegen, Horseshoe U
Starting a business is an exciting venture. It’s easy to get caught up in deciding what your logo looks like, finding the perfect business name, coming up with an inspiring vision and mission, and getting your office set up. While those pursuits are important and probably more fun than mapping out the action plan for business operations, deciding the right business type that will work for you given your business and entrepreneurial style should come first. Are you flying solo or working with a partner or group? Is this to be afor profit business or is it to be a community service type non-profit? What personal liability could you encounter in conducting your business? These are a few of the questions that you should consider as you set up your operation.
The five basic business forms are the Sole Proprietorship, Partnerships, Limited Liability Companies, for profit Corporations and Non-Profit Corporations, each form having advantages and disadvantages. In a sole proprietorship you call the shots as the sole owner and as a result bear liability for all debt. Partnerships combine individual strengths and talents, spread the work load, share liabilities and provide feedback, but they are more complicated and require working out an operating/partnership agreement. Limited liability companies are structured to limit personal liability, but require more paperwork and costs. Corporations enjoy certain tax advantages not available to individuals but have a more complex operating and regulatory structures. Non-profit corporations are generally exempt from income taxes but often experience funding difficulty.
Get Started, How to Create and Market Service Based Business During a Down Economy is an E3A telecourse that goes more deeply into this subject. Join PJ Stegen and Kim Shook, certified E3A trainers, on Wednesday, September 28 at 5:00 PM (Pacific Time) or Sunday, October 23 at 1:00 PM (Pacific Time) for a free introduction to hear what this twelve session telecourse offers. Sign up at www.E3Assoc.org.