PLANNING YOUR BUSINESS

You meet the qualifications of entrepreneurship ; your product is saleable - why not start a business? This is where the homework really begins. It is easier to just rush in and "start a business," but make the future easier with extensive planning. The time used to thoroughly plan will help the business succeed and grow into the future. If you have an idea for a business, here is a site that might interest you. It gives prizes for business plans. EnterPrize

SIZES AND KINDS OF BUSINESSES

There are three main types of business structure for a home-based business owner to consider. This an area where advice from a lawyer will be very helpful. The category into which you place your business impacts your tax structure. More information about the types can be read at Type of Business.

Sole Proprietorship

A business owned by one person . The one person is entitled to all the profits, but also to all of the debt. Probably 75% of all small businesses are proprietorships. At tax time, income and expenses are figured with the personal income return.

Advantages: You're the boss. Simple to start and if you work hard, you can make a good living. You can maintain control over quality and quantity of what you sell. Income from the business is taxed with your personal income. You can interact with people who love the same things you do.

Disadvantages: You have the unlimited liability. This requires a lot of hard work and long hours. You will not get paid vacations or the benefits of a traditional job. Unfortunate circumstances of liability will impact your personal assets. You can't just work your crafts - you must also attend to the business side.

Partnership

A business when two or more people share a business and they agree to share in the profits of the company. Talents of two or more people can be utilized, thus an artistic talent can be aided by a management talent etc.

Advantages: Ideas and talents of more than one person. Simple to start. More investment capital is available. Each partner pays taxes through personal income.

Disadvantages: Partners share unlimited liability. Partners share profits as written in the business agreement. Disagreement can happen when two or more people are making decisions.

Corporation

A corporation is treated as a separate person by the government. It stands alone and has the rights and responsibilities of a person. The profits are paid as salaries to individuals and any liability is absorbed by the corporation.

Advantages: Stockholders have limited liability. Corporations can raise the most investment capital.

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