Business_Oportunity

Small Business Idea The fall of the economy has been lingering for several years. The number of jobs and new businesses opening has been at an all time low for the United States. The United States government has recently announced that over five billion dollars is being set aside for a grant program to help people who would like to open their own businesses. The grant program will be available to all types of new businesses. The government is hoping that this will help boost the lagging economy, as well as build trust in the government that is in place at the present time. Starting a small business will encompass many decisions about the new business. Deciding whether the organization will be sole-proprietorship, partnership, c-corporation, or s-corporation. Considerations of the financial statements that will be involved with each type of organization will be presented. Additionally, consequences in lieu of taxes, legalities, and the accounting implications will be explained. A summary of the new business venture will be revealed with an explanation about services and products being offered. The new business person has to be well educated on the material included in this information. Types of Business Organizations Starting a new business the business owners much choose from four main forms of business structures. The legal entity that a new business owner can choose from is sole proprietorship, partnership, c-corporation, or s-corporation. The following information will discuss the advantages and disadvantages of each legal entity. The first entity to be covered will be sole proprietorship. Sole Proprietorship Advantages Most new business owners start out using the sole proprietorship entity. Businesses with this entity are managed completely by one person. Choosing sole proprietorship will give the owner several advantages over the other entities. The owner can make all decisions and not have to explain to any other people. Decisions like pricing, marketing, number of employees, and everything else can be made with no questions asked. The business can be started with very little paperwork. Because of the minimal amount of paperwork, the business can be started very quickly. Additionally, most states do not require a special business license to operate a sole proprietorship. With no business license, the company expense can be claimed on the owner’s personal income tax return. The last advantage is the low cost of start-up. Most sole proprietorship business is started at home or in a garage. The owner has no need to hire a large number of staff members, and no need to pay for a large building. Sole Proprietorship Disadvantages But the sole proprietor will have some disadvantages to consider as well. A big disadvantage to sole proprietorship is that the owner will be held personally responsible for all loans or money owed from the business operations. In other words, if the organization cannot pay the bills, the owner can be sued personally. Funding the operations can be a challenge for sole proprietorship. Banks have a hard time trusting the longevity of the business because the loans are hard to recover if the business fails. Partnership Advantages The biggest and most appealing advantage to a partnership is the fact that these businesses do not have to pay taxes on the money the company makes throughout the year. Additionally, partnership has minimal paperwork is needed to get started. The only paperwork that must be completed is the partnership agreement should be filed in the local court system. Partnership Disadvantages