Best Types of Businesses to Start
There’s a lot to love about starting a business, but there’s a good chance you don’t have the right skillset to run it. Whether you want to start an online retail business, a food truck business, or something else, it’s important to evaluate what kind of skillset you need to launch your business.
There are four main types of business to consider:
1. Microbusiness: A microbusiness is a small business with less than $100,000 in annual sales, including franchises, sole proprietorships, and partnerships.
The microbusiness model is the most popular type of business for small businesses.
A microbusiness is an independent business with no overhead, such as a storefront, a website, a staff of employees, and/or a physical office. These types of businesses are ideal for people who enjoy being their own boss and want to run their business from home.
With a microbusiness, you are responsible for everything from your advertising to the products you sell. You are your own marketer and you are accountable for your own success or failure. Must read-14 Best Low-Investment Business Ideas You Can Start Online
It’s important to understand that not every microbusiness is successful. But, the potential for success is huge, especially if you’re willing to put in the time, energy, and resources to learn and grow your business.
2. Sole Proprietorship: A sole proprietorship is a business owned by one person.
There are a variety of types of businesses you can operate, depending on your situation. One of the most popular, and also one of the most legally complicated, is the sole proprietorship. A sole proprietorship is essentially a business operated by an individual, with no other owners involved. The benefits of operating a business as a sole proprietor are that you control all aspects of its operations, including hiring and firing employees, handling payroll, and paying taxes.
The downside is that this structure limits your liability and the scope of your business. However, if you plan to run your business from home or from a small office, you may find this structure to be the best fit. There are also advantages to operating a business as a sole proprietorship. For example, you can deduct many of your expenses from your personal income. Also, unlike a partnership, you do not need to form an entity in order to receive limited liability. However, if you do decide to incorporate, you can retain the advantages of operating a business as a sole proprietor.
3. Partnership: A partnership is a business formed by two or more people, usually owning equal shares.
One of the main goals of a partnership is to expand the business and grow the company, by working together.
A business partnership may be established when one partner owns a business and the other partner provides capital, expertise, or services. The partnership is usually legal, meaning they are recognized as separate entities, and can form a joint venture with many different types of ownership arrangements.
Partnerships are often used for companies that need the combined resources and expertise of two or more companies to achieve their goals. This type of partnership may be used in several ways, such as joint ventures, mergers and acquisitions, and private equity transactions.
Often times, partnerships can be a key component of corporate strategy, especially for smaller companies, which may lack the financial, operational, and management capacity needed to achieve ambitious growth targets.
In other cases, they can be used to gain access to a particular market segment, or acquire a company at a price below its market value.
When a merger takes place, the company being acquired is usually acquired by the acquiring company for its expertise, management, technology, infrastructure, or other assets that will improve the performance of the acquiring company.
Another popular business model that uses partnerships is the franchising business. A franchise is an independently operated business that uses a system of licensing agreements to allow a franchisee to use a trademark name and business system created by the franchisor. The franchisor is responsible for marketing, training and support services.
4. Corporation: A corporation is a business owned by many people, often shareholders. A corporation can have more than one type of owner, and shareholders may own the company in different ways. Usually, the corporation is legally distinct from the owners, so they can avoid personal liability for the company’s debts or actions. A corporation can also be incorporated (i.e., formed) as a separate legal entity.
A corporation is also known as a “legal person” or a “legal person.” Corporations and other legal entities are treated differently in the United States and most other countries, but they are typically treated as distinct legal entities. This means that, as long as the corporation is set up correctly, it cannot be held liable for its owners’ actions.
Instead, the corporation is viewed as an independent legal person, with a corporate personality. If there are multiple shareholders, they might decide to form a corporation, which has a legal personality of its own. This means it has the capacity to sue and be sued, contract, pay taxes, and carry on other activities normally associated with individuals and other legal persons. In most countries, a corporation must file a public document, called a “registration,” with the government. The registration lists the corporation’s name, address, and type of business.
Corporations are usually governed by a board of directors and managers. Shareholders may have a general meeting of shareholders to approve the selection of a board and any amendments to the articles of incorporation. Directors are not directly accountable to shareholders, but are required to act in good faith.
The president of a corporation, or the person who serves as a corporate officer for a corporation, has certain duties in addition to those specified in the articles of incorporation. He or she is responsible for the general management of the corporation. A corporation can elect officers such as a president, vice president, secretary, treasurer, and other positions. These officers manage the day-to-day operations of the corporation.
The main function of the directors is to look after the interests of the shareholders, usually by acting as their fiduciary.