SMALL BUSSINESS PLAN Starting a business is a big step, many factors go into it. One of the most fundamental decisions all persons of activity face in starting a business is how that company will be organized (Rogers, 2012). If a buyer is not careful and thinks things through, they could fail fairly quickly. There is no right or wrong when choosing a business form; it is all about choosing the right business structure for you. You have to weigh all options and then decide if a sole proprietorship, partnership, LLC, or a corporation is the best route to take. Knowing what each entity means and what goes into it is the first step to having a successful business. Sole Proprietorship is the simplest form of a business organization, where a single owner owns and operates the business (Rogers, 2012). This model has to be the most basic out of all the business entities available. With a sole proprietorship, as long as you are the only owner, you do not have to take any formal action to form this sort of business entity (Choose, 2015). You can operate this business under your name, or choose a DBA name that someone else is not already using. Because you and your businesses are one in the same, the business is not taxed separately (Choose, 2015). The income you make with your business is considered your income and is reported on your taxes. You are responsible for making sure you withhold and pay all income taxes (Choose, 2015). Sole Proprietorship has one significant advantage, complete control, and decision-making power. (Advantages, 1999). The ability to make changes and implement them without obtaining approval from partners or board of directors is a significant benefit of this business model. Lastly, there are fewer costs associated with maintaining and running a sole proprietorship. In the overall scheme of things, sole proprietorship would seem to be one of the easiest ways for a new business owner to get their foot in the door.
Business Organizations 2When the decision is made to create your own company, it is very important that you consider the type of business structure that will work best for you and the type of operation you will be running. There are a few different types of business structures look at which include a sole proprietorship, a partnership, a Limited Liability Company(LLC), and also a Corporation. Whichever route is decided on, consideration should be taken in terms of steps involved in the formation of the structure, taxation, advantages, disadvantages as well as personal liability for owners. When I decide to open my first great business I believe I would choose the Sole Proprietorship business structure, as I will probably be opening a small general construction company.A sole proprietorship is perhaps the most common and simplest business structures chosen to start a business (Rogers, 2012). Not only is it an unincorporated business, but it is also managed and run by a single individual, making their no difference between the business and themselves. With a sole proprietorship the owner is entitled to all the profits made by the company, while also being responsible for all the debits, liabilities, and any losses incurred by the business. The formation of a sole proprietorship an individual does not necessarily need to take any formal action, the status automatically comes from the business activities being conducted (Rogers, 2012). With this being said, the individual owner will still need to comply with all legal necessities and obtain all the necessary licenses and permits needed for the company. Also with a sole proprietorship when it comes to tax season, the owner and the business are the same which means that the business income and the owners income are taxed together. One advantage that the ownership of a sole proprietorship has to offer is the that its quite simple and not very expensive to form. With startup cost being less, a sole proprietorship is the easiest and most cost effective of the other business structures. Legal costs are also only