Types of Businesses in America
American society has always been optimistic towards their future. The American nation is a capitalistic country. Many individuals are influenced to start up their own businesses with their own ideas. The government helps and regulates all business. There are three types of businesses sole proprietorships, partnerships and corporations. A sole proprietorship would be my best choice to start up my own business. This form of business is the easiest to start. In the states a federal license or permit is needed to sell products or serve a service to the public. A license is required in order to begin the business operation. Income or loss the owner is accounted for on the tax return. “Flow thru taxation” is the term used to state that the owner’s incomes flows through the tax return. I would keep contact daily with my accountant. The business would not be taxed twice as there would be in corporations. It is simply taxed once. I would not need contracts stating two people joining in and making an effort to make a business work as there would be in partnerships. I would just rely on myself. I have better confidence of trusting myself than trusting others in forming a partnership. It is a gamble and a risk to be liable for the entire business. Life is pretty short and taking a risk would either mean it was worth it or you learn from it.
Since it’s the easiest form of business to start why not take full advantage. But there are advantages and disadvantages. In a sole proprietorship there is limited capital which means the owner would have trouble getting the supplies and materials needed for. But it would also seem harder to borrow money and loans from the bank. A loan from the bank seems like the ...
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...g. Businesses structures and regulations are strong and firm which help businesses around the nation. The rules and regulations from the federal government help and keep the people safe. Starting a business is easy and profitable. It may be easier to start a sole proprietorship rather than a corporation. But many can receive help from family or friend and start a partnership where there is help and support of a partner. There are advantages and disadvantages for all forms of business. There are endless opportunities for the American people. There optimistic attitudes can lead them to great wealth.
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...usiness is well qualified. Well qualified business will most likely to run much better. Social regulations include anti discrimination laws, environmental regulations, and work-place safety rules (Katznelson 318). This helps a lot because of social regulations; jobs cannot hire employees because of their race, sex, sexual orientation. In addition, this regulation helps employee work in safe environments and not hazard places where they can become very ill or hurt. This is why regulations are important, they help the economy run properly when every individual is granted rights to help them work efficiently.
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It is a little known fact that small businesses make up a major factor of the American workforce. Since the word small is in the title most people think nothing of them, but when one takes the time to think that there are millions of small businesses, most with at least two to ten workers, the amount of people begins to add up. There are many factors that could contribute to a business failing, and it happens all the time in America. Small businesses must have solid business plans, a good use of technology, appealing merchandise, and appropriate financing to survive and prosper in the economy.
Contemporary Business 15th Edition 2013 Update, Louis E. Boone (University of South Alabama), David L. Kurtz (Univ. of Arkansas), November 2011, ©2012
There are over 28 million small locally owned businesses in the United States and 70 % of these businesses are owned and operated by a single person. Owning a small business is not an easy task it takes hard work and dedication, Steve Jobs once said “you need a lot of passion for what you’re doing because it’s so hard”, people don’t realize
In the 21st century, small and large, private and public businesses are all aiming towards economic growth. The small business marketplace is extremely dynamic and the changes are fast. Here are some facts from the US Small Business Administration on small businesses. There are about 30 million small businesses in the United States and employ just over half of the country’s private workforce. They employ a staggering 40% of high tech workers such as computer professionals, scientists and engineers. More than half of the small businesses are home-based businesses and two percent of them are franchises. One of the most important aspects is the fact that a majority of innovations in the United States come from small businesses. In 2008, there were 627,200 new businesses that started, 596,600 businesses that were closed and 43,546 companies that filed for bankruptcy. According to business experts, of all the small business startups, one-third of them are profitable and successful, a third of them just about break-even and the rest of them are down with negative earnings Some buyer’s develops as independent business owners, while others are more likely to prosper as franchise owners. According to a recent report by the Small Business Administration (2007), the United States had approximately 26.8 million small business firms in 2006. In fact, as recently reported by Moutray (2006), most firms in the U.S., are very small and account for about half of the country's non-farm real GDP. Over the past decade small business has generated 60–80% of new jobs annually. In reality, there are easy answers to the independent business versus franchise dilemma. Although, a franchise system offers benefits to owners such as brand recognition, to inc...
Sole tradership is when the business is fully owned and managed by one person, though others can be employed to help run the business. As the sole traders only financial income is from the business and/or bank loan, they do not have the resources to expand and cover regional or national areas. These types of businesses are located in the small business sector and usually cover local areas. Such businesses could be hairdressers, corner shops or market stalls etc. Sole traderships have unlimited liability so if the business fails to pay its debts the financial responsibility falls on the owner/s to pay the debts in full even if they have to sell their business, personal possessions and assets.
Pine, B.J., Peppers, D. & Rogers, M. (1995). Do you want to keep your customers?. Harvard Bussiness Review. March-April. pp. 103-104.
A small business can be defined as a legal entity consisting of very few employees. Establishing a business such as a proprietorship is the least complicated among business structures. Proprietorships also have a major advantage over other business structures with regards to filing taxes. Profits generated by the business are taxed at individual tax rates thus avoiding the double taxation incurred by corporations. Local economies, government offices, schools and the unemployed benefit greatly from the growth stimulated by these companies. The taxes collected from small businesses and job creation makes small business a vital part of the community.
Making the decision to open your own business is a major life event. Starting a new venture can be exciting as well as rewarding. The first step to becoming a business owner is choosing the type of business you would like to run. This business can be something that you have wanted to start up yourself or you can go with an established franchise. Are you willing to share the profits in exchange for the relative safety of a franchise or would you prefer the risk and rewards of pursuing your own vision? Franchising is a continuing relationship wherein a franchisor provides a licensed privilege to the franchisee to do business and offer assistance in organizing, training, merchandising, marketing and managing in return for a monetary consideration
Five advantages for owning your own business are: 1) The owner receives all profits, meaning that all earnings go to the sole proprietor, or the owner, and isn’t shared with anyone else. The profit is not split among partners, or split among a corporation. So when you own your own business, you’re the first and only one that receives all earnings and profit. So if a person has a successful firm, he/she is the first to reap the success and rewards. 2) Another advantage of owning your own business is that you’re your own boss. You can set your own hours, decide what you want to do with the company, no manager to answer to. Basically, you’re in charge of everything. The owner solely makes all decisions. Or in other words, you’re running the show. 3) An additional advantage is that a sole proprietorship can be easily organized. It’s easy to start your own business. First of all, it costs very little money to start your own business. As a sole proprietor, you have minimal legal requirements. The owner doesn’t have to establish a separate legal entity. All that is needed is to register the company with the state and apply for an occupational license and any additional licenses required for the state. ...
...s of a partnership are the shared profit factor, which can cause a lot of animosity among the partners if things do not go as well or if there is an unequal amount of contribution among the partners. Additionally, there is both individual and joint liability with partnerships. This can often cause dissention between the partners (“SBA”). Essentially, the sole proprietorship is the best choice because the risks are minimal because it is solely one individual, who can make the best choices and decisions and deal with the consequences that arise accordingly.