Be informed to help determine the best business structure for you. There are many reasons today for owner-managers of small businesses to look at the legal business structure of their firms. Changing laws and the need for capital are just two of the many factors which require owner-managers to carefully evaluate which legal structures best meet their needs. This Business Builder will provide you with the information you need to help determine the best business structure for you.
A sole proprietorship, by definition, is a business owned by a single person.
It does, however, mean the owner of the business, known as the sole proprietor, is responsible for every aspect of the business in question. While being a sole proprietor does come with numerous challenges, the rewards of owning your own company can be personally and financially satisfying.
Business Startup You are in charge of coming up with a name for your business, securing the financing, finding a location for the business and registering your business as a sole proprietorship. With a partnership, you would have someone else involved in the business who could do these things, but as sole proprietor, setting up the business falls on your shoulders.
Day to Day Operations An important consideration for any sole proprietor is whether or not to hire employees. While employee salaries take money from the business, not having employees can limit the time you have to put into the day to day operations of the business.
If you operate a store, you need someone to handle the customers. Without employees, that will be you. You will need to be taking care of customers while managing other aspects of the business.
If your store is open seven days a week, you will have little time for anything else if you are operating the business. Inventory and Stock If your sole proprietorship is one that carries a lot of stock, it will be your responsibility to take inventory and to process orders.
It will also be your job to unload orders as they are delivered. If you are operating a store without employees, this can be difficult to do without closing the store while you take care of these responsibilities.
Bookkeeping and Payroll Unless you hire an accountant, which many sole proprietors do, you will be responsible for keeping track of the books in your operation.
This includes keeping track of profit and loss, purchases, sales and payroll for employee payouts. Advantages and Disadvantages Being a sole proprietor has advantages and disadvantages.
If your business deals heavily with the public and carrying stock, you will need to consider the expense of employees and paying for some outside services. The bottom line with a sole proprietorship is that all of the responsibilities fall on you, as does the success or failure of the business.
References 2 Small Business Development Center:Influences of Business Environment - The business environment is constantly changing as time goes by.
There are several factors that affect the aspects of the business environment such as benefits, costs, and risks of conducting business. By Jennifer Reuting. LLCs (limited liability companies) are pretty powerful entities that you can do some pretty amazing things with.
But you know how the old saying . Digital Library > Building and Inspiring an Organization > Forms of business"How to Determine the Legal Structure of Your Business".
Should your business be a proprietorship, partnership, limited partnership, C corporation, S corporation, or LLC? Be informed to help determine the best business structure for you. The PHS Research Plan form is used only for research, multi-project, and SBIR/STTR applications.
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