Starting a Business – Choosing the Right Organizational Structure

Business

A business is a company that produces goods or services for a profit. Some examples of business types include sole proprietors, partnerships, corporations, limited liability companies, and social enterprises. Regardless of the organization, a successful business should follow a business plan. There are many factors to consider when setting up a new enterprise. These include legal requirements, funding, and hiring and training personnel. Choosing a team with the right combination of skill sets and experience will make your job a lot easier.

One of the most important things to decide upon is the best organizational structure for your business. This is a decision that should be made in conjunction with a tax and legal adviser. Typically, owners of small to mid-sized businesses will opt for a limited partnership (LP) or corporation. Depending on the type of business, this can entail different costs and benefits. It is a good idea to find out what options are available in your area prior to making a final decision. If you are a sole proprietor or a seasoned veteran of the workforce, you may not qualify as an entrepreneur, but that doesn’t mean you are not a boss.

Although it is often difficult to determine which organizational structure is the right fit, it is a worthwhile exercise to consider the pros and cons of each. To learn more, attend a starting a business workshop or consult with a tax and legal adviser.

While deciding on the appropriate organizational structure, it is also prudent to evaluate the various states’ licensing laws. A state may offer special legal or financial structures for professional firms, but these aren’t always required. In some cases, a savvy entrepreneur may be able to obtain a license from a neighboring state. However, the state of origin is often the best bet. Regardless of the legal structure you choose, be sure to follow all federal and state regulations when it comes to hiring and firing employees and operating a successful business.

When putting together a business plan, it is a good idea to make sure you have a comprehensive list of goals and objectives in place. Getting the ball rolling is the first step in any new venture, but you must remember to plan for the future.