Small Business Basics – Runs a Partnership Or Corporation

A business is defined in the Merriam Webster’s Collegiate Dictionary Tenth Addition as: A private, commercial, profit making enterprise. A corporation is formed for the benefit of all the members of the company. A partnership is a formal relationship between two people; one acting as a member of a partnership. A partnership is considered legally separate from the people who make it up.

Business enterprises can be broken down into either one or more partnerships, each of which having individual owners. A partnership, for instance, consists of two people who are related to each other by blood, marriage, or adoption. Partnerships may also be among relatives, friends, or neighbors. Limited liability partnerships (LLPs) are corporations with one owner. Limited Liability partnerships (LLPs) are for many purposes, but a limited liability partnership is the best known of all the types of partnerships.

Formal partnerships are created by a written document known as a partnership agreement. The partners create a partnership by agreeing to share in the costs and profits, as well as the risks of any activity resulting from the partnership. Limited Liability partnerships (LLPs) are formed by a written agreement that limits liability for both parties. Each partner is liable for his or her own share of the business debts and losses. Limited Liability Partnership(s) are popular among new start-ups since it permits them to keep control over large business debts.

Business debt management is the responsibility of the partnership. There are many ways to manage a limited liability partnership (LLP), including standard billing and collection procedures, payment to creditors, making payments to the partnership itself, borrowing money from a third party, paying suppliers, and selling the business. All of these methods have their pros and cons.

Developing a business strategy involves the assessment of your market, competition, and potential. You must determine how much your production costs, your selling price, your overheads, and your expenses (rent, insurance, equipment, supplies, and labor) will cost you in a year. Other things to consider in developing a business strategy include how to increase your sales, how much you will charge for each of your goods or services, and how you will attract and motivate customers. The bottom line, the amount of profit you can expect to make in a year, depends largely on how well you can execute your business strategy.

A business strategy is a good way to get the ball rolling if you do not yet have a good marketing program. It is vital that you determine who your customer is, what their wants and needs are, and how you can satisfy those needs. For example, if you produce dry cleaning services, you should determine how to improve the quality of your service and where you can locate your customers in order to maximize your profits. In addition, you will also want to develop a marketing program that will bring new customers into your store. Without a solid marketing program, however, you may be losing valuable profits because no one knows you exist! Therefore, every business owner should consider investing in marketing.

Another key component of a business comes from the type of ownership structure you have chosen. A partnership will give you and your partners an interest in the growth and maintenance of your business. Because the partnership handles day to day decisions, it is often more interested in meeting the desires of its partners rather than those of the general public. This makes it an excellent choice for small businesses owned by local families.

A limited liability company is another popular choice among small business owners because it offers many advantages. Because the shareholders of a limited liability company do not bear the liability of the corporation, it provides its owners with great protection from being held personally liable for the success of the business. In addition, because there is only one vote per member, a lawsuit cannot be brought against the company. Finally, a limited liability company has a lower cost of capital than partnerships and corporations and has less risk of dissolution. All in all, a partnership or corporation may be a great choice for your business; however, if you are looking to start a business that is profitable and provides jobs for local families, then a limited liability company makes more sense.