Business marketing involves the process of understanding the customer needs, expectations, and preferences. Then, in order to satisfy the customer, business operators have to determine what steps should be taken to achieve that goal. Once that is determined, business plans should be formulated. With a business plan, business operators can identify what steps they need to take to reach their objective and then work out the whole operation of the business. In essence, business plans are the blueprints of the entire organization.
Now coming to the most famous form of business organization – the sole proprietorship or the partnership. A sole proprietorship, as the name suggests, is a business organization that is run by a sole proprietor. It is called a sole proprietorship because only that person has anything to do with the day-to-day management and running of the business. A partnership, on the other hand, is formed when two or more people come together for the purpose of conducting a business organization. In the United States, partnerships are known as corporations.
There are two main types of limited partnerships – general partnership and limited partnership. Limited partnerships are formed by parties that are related by blood or by common law marriage. General partnerships are formed by parties that are not related by blood or by law marriage. Although limited partnerships are less popular than general partnerships, they have many advantages over it.
Limited partnership is one of the easiest businesses to set up as there are no capital investments required except for the purchase of shares (the shares being held by the partners). All the partners are equally sharers in the ownership of the business and they can decide how the funds are to be used. This means that limited partnerships can be set up quickly and are relatively easy to set up. Another advantage is that all the partners are treated as stakeholders and they are entitled to be paid their due dividends according to their agreement. In addition, if a partner is no longer able to work in the business, he or she is entitled to a part of the company’s profits.
On the downside, the partners in a limited partnership are not entitled to receive dividends unless the Board of Directors declares the dividends as a result of an annual meeting called the Annual Meeting. In such case, all the profits will be divided between the partners. And if the business fails and the Board of Directors does not declare the profits, the proprietors of the partnership are liable to pay the shareholders their proportion of the losses.
Sole proprietorship is another business structure that comes with limited liability. The only difference between it and a partnership is that, in a sole proprietorship, there is no requirement for Board of Directors meetings and no provision for holding annual or extraordinary general meetings. The only way to make a profit is to buy and sell the assets of the business. However, if the business fails, all the owners are personally liable to pay the shareholders their proportionate share of the losses.
As you can see, there are many different business structures that you can choose from when you start your own business. You have to analyze your capital, your immediate and future cash needs, the nature of your products and services and the level of risk that you are willing to take. Once you have determined these factors and based on that information you have chosen a business structure, you have to go further and do the necessary feasibility analysis. There are many booklets that will help you do this. Once you have completed your feasibility study and you feel that you know all of the facts related to your chosen business types, you should apply for a corporation or a limited liability company.
Business Realm 