Starting A Business: Choosing a Business Structure for Your New Company
May 13, 2008
This post continues the series on Starting A Business. This installment deals with choosing a business structure for the formation of your new company.
Choosing the right business structure for your personal situation is one of the first decisions you will have to make when you start a business. Just like daughters are different than sons, a Sole Proprietorship is much different than a Corporation or LLC (Limited Liability Company). They have many similarities but at their core, they are very different. In this post I will explain the differences between the business structures and provide you with information that will help you make the decision about which is right for you.
When making the decision about how to structure your new company, some of the things you need to consider are:
- personal liability
- taxes
- management structure
- will you be seeking outside financing
- selling the business
Here is a list of the most common business structures and a brief description of each:
- Sole Proprietor
- General Partnership
- Corporation
- Limited Liability Company (LLC)
Here is a brief description of each business structure and some information to help you decide which is best for you.
Starting A Business: Naming Your New Business
May 7, 2008
Having done both (more than once), I am going to make the argument that choosing a name for your business is even more difficult than choosing a name for your child. While you don’t have to factor in things like people in your past that had that name, in-laws, and what will happen to your business on the playground, with your child, once you decide that you like the name, you’re done. No so with your business.
With a business you need to go much further. You need to find out if there are other businesses with that name, and if so, if they are in your industry. Is the trademark available? Is the domain name available? Does it mean the same thing to others as it does to you? The list goes on. There are businesses out there thriving on this very concept. Day in and day out, they help people name their companies. There are also companies that will help you name your child, but that is another story entirely.
These services are not for us though. We are not that decisionally challenged. We would never entrust such an important, personal decision to strangers. Besides, we are on a budget, right? So here are are some tips and advice about naming your business.
[Read more]
Knowing When To Cut Your Losses and Stop Building A New Business
May 2, 2008
I know it has been a couple months since I posted anything, but I am back. In the two long months since my last posting, I have learned many new lessons and re-learned a few old ones. In the coming posts, I plan to share a lot of what I have learned. You will also see me launch a new business, from the very beginning. But first, let me tell you why you haven’t heard from me for a while.
Simply put, I got myself into a business deal that ended up going against almost all of the criteria I have for my business ventures. I got into a partnership, where my responsibilities far outweighed my ownership stake in the company. Our roles and responsibilities were too vaguely defined from the beginning, and this led to a quick meltdown of the working relationship between me and the main stakeholder. Most importantly though, I allowed myself to sacrifice the flexibility and lifestyle, I have worked so hard to achieve.
The good news is that I have developed the ability to recognize when things are not working. I have a very good idea about when I can turn things around, and when they will only get worse. I needed to get out of this, but I had to be very careful to do it right. Oh, I didn’t mention that one of the partners was a very close friend, and all of the partners (except for me) were lawyers? [Read more]
