10 Ways To Start A Business
Entrepreneurs often work on their own as sole traders or set up as limited companies. Nowadays, however, there is range of company structures to choose from that include the traditional family firm, professional partnerships, co-operatives and even not-for-profit businesses that want to make the world a better place.
Entrepreneurs focus on what they want to do and how they want to do it as a starting point from which to develop the right business structure.
Getting the fit right between the aims and objectives of the business and the structure needed to achieve those aims is a priority in today’s business world.
In order to make the right choice, it is useful to consider a number of the main options facing the new entrepreneur.
A Sole Trader model is popular with many people starting out in business and provides greater flexibility than being employed although less structure than a company. But it may not provide sufficient protection for the person involved.
A Private Limited Company is the most common and simple of structures to set up and provides greatest control and direction to the owner, as they are effectively in charge of everything the business does.
A Private Equity Structure provides finance, industry contacts and specialist advice but growth funded by debt is the focus of such an operation and exceptional performance is expected.
A Stock Market Listing means a company can raise money and is operating at the highest level but it comes at a price, as scrutiny to perform on a quarterly basis from shareholders is intense and unforgiving.
A Limited Liability Partnership means those who run the business also own it but it can lead to frustration and restricted opportunity for others who work in the business.
An Employee Owned model provides those who work in the business with a sense of ownership, as they oversee and are informed by management in relation to performance and future plans.
A Family Business allows for long-term planning to cater for the next generation but many families disagree and non-family members can feel excluded from the decision-making.
A Co-operative structure provides customers with a stake in the business and enables them to operate at a large scale but decisions can be slow and change difficult to deliver.
A Crowdfunded Start-up provides an opportunity to raise finance without going to traditional banks or financial institutions and gives control to management. But if the business idea doesn’t gain support the failure can be a very public affair.
A Not-for-Profit company operates like a normal company and is focussed on achieving social outcomes but can struggle to align good management practice and profitability with its core aims and objectives.
The number and type of structures vary vastly and work for different businesses in different ways. But the key issue is to understand the benefits and drawbacks and choose one that suits the business.
So, if you’re an entrepreneur with an idea for a new business make sure you choose the right structure to protect yourself and your future.
