Unless you’ll start out running business from home, you’ll want to find suitable commercial space. Your choice of location should be made early on in your plans to start a business. Choosing a good business location is a vital decision for some businesses, such as restaurants, and banks. But for others, location may be a lot less important than getting affordable rental space. It depends upon the type of business you have, the brand you are creating, the amount of foot traffic you require, and the amount of money you have to spend.
Location can be an important way for people to become aware of your business. But finding the right business location is not easy. If you can identify the advantages and disadvantages of the location, you can find the best place for your business. One key to choosing a profitable location is determining the factors that will increase costumer volume for your business.
Consider the following when looking business location:
- Population or traffic
- The landlord
There are many sources of capital available. Banks, savings and loans, and commercial finance companies have long been the major sources of business financing. Many business owners that get turned down for a loan from a bank turn to a commercial finance company. Commercial finance companies specialize in making working capital or investment capital loans to small business. They have more flexibility in the type of loans and investment that they can make. When choosing a financing source, pay particular attention to the reputation of the venture financing you use.
Commercial finance company makes loans on the strength of your collateral rather than your track record or potential. You should be aware that almost all commercial finance companies are strict about collateral requirements and higher interest rates than bank loan.
Almost all businesses require filing certain licenses and obtaining particular permits. The type of business licenses and permits that you need are vary by city, county, and state, as well as by type of business you plan to start, so study the regulation carefully. You may need one or more specialized licenses, especially if you serve or sell food, liquor, or firearms, work with hazardous materials, or discharge any materials into the air or water.
Business licenses are serious matters in most cities. If your state government discovers that you are doing business without licenses or permits, a variety of bad things can happen to you. To get the license, you may be required to conform to certain zoning laws and to meet building codes and other regulations set by the local health, fire, or police department.
It’s the American Dream to own your own business. There are many advantages associated with starting your own business, such as:
- You’re your own boss
- Sense of self-satisfaction that can be obtained from running your own business
- Owning your own business brings you a sense of independence
- You have the opportunity to become far more successful financially than you ever could become working for someone else
- With your own business, you’re the one who decides when and where you work
- You can create your own work environment
- You can put as much or as little time into your business as you like
Partnership is formed to conduct a business with two or more partners being fully involved in the operation of business for profit. The partners contribute money, property, or services to the partnership; in return, they receive a share of the profits. The two most common partnership types are general and limited partnership.
No written partnership agreement is necessary, though it’s a good idea to make one. A partnership can arise even though there is no express agreement and the parties do not call themselves partners. Without question, a carefully prepared written agreement spelling out the rights and duties of the partners is highly recommended. A partnership agreement could be helpful in solving any disputes. There are some more advantages and disadvantages to the partnership.
Advantages of partnership:
- They’re easy to form
- More sources of capital
- Liability may be spread among the partners
- Sharing emotional burden
Disadvantages of partnership:
- Friction between partners
- Lack of continuity
A sole proprietorship is the easiest, least expensive, and least regulated business legal structure. A sole proprietorship is simply a business that is owned by one person. If you go into business for yourself and do not have any partners, you are considered a sole proprietor. The proprietor personally owns all of the assets of the business and controls its operations.
To establish a sole proprietorship, all you need to do is name the business, get a business license from your city or county, publish a fictitious business name statement in a local newspaper, open a checking account, open your doors, and you are, quite literally, in business.
Advantages of the sole proprietorship:
- Low start-up cost
- Ease of formation and running more quickly than with other structures
- You have total ownership and control of the business
- You don’t have to share profits with anyone
Disadvantages of the sole proprietorship:
- Difficulty in raising capital
- Unlimited liability. The owner of a sole proprietorship is personally responsible for all business debts, obligations, and judgments of the business
- You must pay self-employment tax on the business net income
A partnership is a legal business relationship in which two or more people agree to share ownership and management of a business. Deciding to partner with someone is one of the most important decisions you can make in your small business. The right business partner can extend your expertise, provide a second opinion when required, share the workload, and provide a synergy that you just can’t get working alone. You should take no less care in choosing your business partner than you would in choosing your marriage partner.
So how will you find a partner who is suited, willing, and available to join you in starting business? Actually this is difficult question. The most important is that you need to find someone who are very compatible and complements your own skills. After find the right person then you will need a partnership agreement.
A problem for many people who want to start a business is a lack of sufficient personal savings for start-up the business. Asking for help from those closest to you can be another smart move when looking for capital. Family and friends can be a great source for financing a new or growing business. If they believe in you and your idea, friends and relatives are sometimes willing to fund you. A great thing about this option is that friends and family tend to lend or invest either interest-free or at a very low interest rate. It is make your job much easier, especially at the beginning of your venture.
Although going to family and friends remains the most common way of landing start-up financing, doing so is not without its down side. If you acquire financing from friends and family, you are putting important personal relationship in jeopardy if your business is fails and you are unable to repay your friends and family. It is also important to make it clear to the person who is lending you the money that you will treat the loan just like a commercial loan from bank.