Budding Entrepreneur: Every day of our lives, for how many ever days we live, there is one constant thought in our minds. And that to make a name for ourselves. A name that at least some people in the world would recall and talk about, if not the entire world. It isn’t that much to ask.
There are two ways of gaining fame. One is for the wrong cause, like that of Osama Bin Laden, even after years of his death, people still know him, and probably the coming generations will know him as well. The other kind is what most people crave. Mother Teresa, William Shakespeare and even Steve Jobs, these are the idols I am talking about.
Now, the question is, how does one achieve the fame that would prevail even after his time? Mother Teresa had won a Nobel Prize and was the epitome of selflessness. William Shakespeare changed the way we see literature; Macbeth is my all-time favourite. And Steve Jobs had created Apple Inc. All of these people left something behind that people could remember them by.
I am mortified, but I would say that what Mother Teresa did, cannot be done by anyone at this age. The creative flair like that of Shakespeare, is found in 1 in a million. However, what Steve Jobs did is quite achievable.
Starting a business budding entrepreneur would mean that your name can be carried forward even if you are no longer there to see it. It is a form of legacy that your children and grandchildren can make their own.
Now, let us understand what a business is?
WHAT IS A BUSINESS?
A business can be defined in two ways;
- One is where it is regarded as a person’s profession or occupation that he performs every day to earn his livelihood. Examples can be a shopkeeper, a transporter or even a dentist running his clinic.
- The other meaning of business is to indulge in any commercial activity that is bringing you profits. Commercial activity means trading; that is, buying and selling of commodities and services or even producing them.
Illustrations would be a storekeeper selling you a bag of chips, a trucker is bringing your furniture to your new home or a dentist filling in your cavity; all for a specific charge that will be his income and your expense.
In both definitions, I have used the same examples. It is because you can define a thing a hundred different ways, but the concept is going to be the same, along with the examples.
The crux of the definition is that any commercial activity that ends up in a profit for you is a business model. Up until now, a business sounds like a pretty fruitful situation. However, along with benefits, there is also a high degree of risk involved in all forms of businesses.
Sometimes the risk can even come onto the owner’s assets and belongings if the business fails and debt is owed. In such cases, the owner may also find himself applying for loans for bad credit with no guarantor and no fees for the unemployed, because there is no other option to get out of the proverbial business hole.
THE CATEGORIES OF A BUSINESSES
The business world has a lot to offer, even in terms of the categories of business. There are around nine forms of businesses, which include-
|Cooperative||Limited Liability Companies||Franchises|
|Charter Corporations||Statutory Companies||Unlimited Company|
I decided to write this blog keeping in mind the budding and aspiring business owners. So I will not be talking about all of these. But two, which can act as an option for your startup.
- SOLE PROPRIETORSHIP
A sole proprietorship is the most common form amongst the small and micro enterprises. As the name suggests, this is owned and operated by a single individual. However, he is allowed to hire employees.
In this form of business,
- The owner and the company are not two separate entities.
- The legal obligations and procedure of setting it up are incredibly liberal.
- All the assets of the business belong to the owner, from the office space to the merchandise.
- The same goes for the owner assets, his cars, property, and any other assets can be seen as the business’ to recover the creditor’s losses, so the liability is unlimited.
- Lastly, usually, once the owner takes retirement or dies, the business does so with him; unless a family member makes it his responsibility.
A franchisee is a popular form of business that helps merchandise to expand its presence in different parts of the world like McDonald’s. Herein, the business owner (franchisor) decides everything, from how it will be run, how it will be marketed, and so on so forth. You can buy a franchise that interests you and fits your aspirations.
The next form is that of partnership. Unlike the previous one, in this type, there are more than one owner, who comes into a formal business budding entrepreneur arrangement to share all the profits and liabilities of business through a contract.
There are three forms of partnership agreements;
- General Partnership,
According to this all partners contribute equally to the operations of the establishment, along with an equal share in profits and losses.
- Limited Partnership;
According to this agreement, new partners can join the business by providing capital. This amount will decide their share in the gains and liabilities of the company. It is commonly practised in the majority of law firms all over the world.
- Joint Ventures;
These are short term partnerships that are taken on for a limited duration of time to complete a project. For example, a caterer and a florist come together in a joint venture for a grand function.
Establishing both a sole proprietorship and a partnership will not be as tricky as the other forms. There are even many tax reliefs. These two can avail to save some more profits. That is why, when a person decides to start his own business, he can opt for these and avoid the others at least in the initial phase of his business.
In the end, I want to say that the world of business budding entrepreneur seems as appealing as it is terrifying. If you can turn it to your advantage, you can achieve all the laurels of the world. However, if you cannot, then it becomes the Bermuda Triangle, getting out of which is almost impossible.
To avoid the latter, you need to have faith in yourself and your vision. Once you lose that, the downward spiral of your business will commence, and you might have lost everything else as well.