Our consulting office received your letter in quest of advice on how to establish a business and develop a business plan. The Name Consulting Company will work hard to create a plan to advice your company on how to form a business, whether or not to take on partners as well as other options. Our team will assist with the establishment of your new company’s business plan, the crucial financial choices, and finalize legal actions. The above steps will assist with preparing a solid business plan and managing a successful business. The Steps to develop a business plan.
Step one is to write the business plan. The business plan is the map to a successful business, which outlines, and defines the goals and guidelines of how those goals will be accomplished. A business plan also assists owners with organizing thoughts, developing clearer ideas and how to project where the business is heading and how it will take to be successful. Most important the first question lenders and inventors will ask “Can I see your business plan. ” Step two is to decide what business structure is best for the organization.
The sole proprietorship, the partnership, the corporation, and the LLC/LLP are the four basic practices in which for-profit businesses can be organized. Practices have associated advantages, disadvantages, and tax consequences. A sole proprietorship is the most stress-free and low-cost business stricter of the three. The business owner has total control over their business as a sole proprietorship; this partnership is usually not a married couple. The advantage it is easy to start up and the disadvantage is the owners are held legally responsible.
Partners invest funds and expert knowledge as well as other needed skills, and take on the risk of failure. A partner will also share in the responsibilities and rights in managing the business, and by law each is legally accountable for obligations of the business. A legal written contract should be put in place to outline the roles of each partner in the business to avoid confusion. “A partnership files an annual information return to report income but it does not pay income tax. Instead, it “passes through” any profits or losses to its partners. Each partnership’s income or loss goes on his or her tax return.
A “corporate structure is more complex and expensive than most other business structures” (Entrepreneur, 2013). There are general corporations, Subchapters, S corporations, and limited liability corporations. An advantage of a corporation is that your individual resources are not threatened from business liabilities; however, the disadvantage is that this business structure is more complex and difficult to run. The LLC is a combination of a corporation but has the safeguard of a personal liability of a business debts and the tax structure of a partnership.
LLC’s have more flexibilities when concerning taxes and also have more elasticity in the way the business structure is organized. However, “A few types of businesses generally cannot be LLCs, such as banks and insurance companies and there are special rules for foreign LLCs” (IRS. gov, 2013). Conclusion Finally, a few important tips to enhance your business plan. The location of a business is very important, it should be welcoming, and in compliance with zoning laws; bottom line do research. Label your business, the name is very important when branding.
As the owner ensure you get a tax identification number and register the business name legally on all applications, permits, and business. Remember as a businessperson one will have to look at deductions and other factors such as the start-up cost, taxes, and other ongoing expenses, most of all thinking about individual financial liabilities. Positively, our team feels that this letter will assist you with starting a business and developing a business plan. Please contact our office so that we can further discuses financing and other options.