Friday, May 24, 2019

When Money Matters

It’s true that when one is ready to venture out into the business world, he has to consider a lot of factors. Some say there are only 3 important things to consider: location, location, and location. Wouldn’t it be money, money, and more money? Definitely, it is the latter.


When it comes to starting out a business, there are legalities and laws that should also be taken into consideration by any would-be entrepreneur.  It starts with the concepts, location, financial support, and risk control. Knowing all of these can really cause a change for the future of the business.


When one is planning to invest in a business, then he must consider some of the basic things:


-        The Business plan


This is just a written plan of one’s business ideas. Written here are the purpose, objectives, and goals of the business. The nature or type of business – this could either be a product that he sells or services that he provides. Herein also are the prospective employees and the necessary professionals and personnel that are needed for the business to run. This will include the accountant, lawyer, advisors, and bankers. It is also explained in here the source of funding, the projected income, and the expected expenses. A good written business plan will later  be an essential in getting sponsors and loans for funding the business.


Having written the business plan, one can choose on what type of business structure he will take into:


-       Sole proprietorship

-       Limited partnership

-       Corporation

-       Business trusts

-       Professional associations

-       Franchising


Now that the plan is ready and everything is decided, it’s time to take actions on it.


-        The Business fund


This is the source of funds for the Business. Unless one is already rich and has the fortune, funding is not a problem anymore. Besides he doesn’t need the business in the first place, right? Well, if that is not the case, one primary source of the fund is the savings from many years of employment. The other source and the most common one is from loans. Getting loans from the bank, lending institutions, and rich people are the popular options. Last option could be the Capital investment, where one can loan money from wealthy individuals and make them co-owners.


-        The Business Name


Choosing a business can be tricky sometimes. When choosing a name, owner should make sure that the business name doesn’t have a duplicate or similar names to those that were already registered in the state for it can be a reason for lawsuits. One way is to choose a name that manifests the structure of the business. For example, putting the word “Corporation” in the name when the business is a corporation or putting the owner’s name if it is a single proprietorship business. To avoid confusion and duplication, the owner may check the list of business names in the state or perhaps make the necessary inquiries in the legal counsels.


The three important legalities mentioned above are just few of the things to consider when putting up a business. If it is done properly, the business will surely grow and prosper. However, it is not at all times that the business will be sailing smoothly. Owners should be vigilant on the common issues that may strangle their business such as:


-        Taxation


These are issues regarding business taxes and employee taxes, as well as, other incurring payments and tax exemptions.


-        Risk and control


These are issues regarding business risks and how to predict and prevent them; this may also include damage controls and sustainability plans.


There are 2 types of risk: tort risk and contract risk. Tort risk is the intentional risk to the owner or the business property itself. Contract risk includes financial risk in the form of vendors and customer risk.


-        Liabilities


A business usually has liabilities aside from the assets it has. Examples of these are general liability, product liability mortgage, and automobile liability.


-        Maintenance


A good business should have maintenance plans in order for the business to survive in the world of competition and change. A business must be able to adapt to changes for it to survive.