First, we chatted about meditating on your dreams. Your vision maybe became a little clearer. Then we discussed the importance of a business plan. Maybe you are working on that part now - I am. So I think it's a good time to chat about the type of business structure you will want to incorporate as. There are a few to chose from. I advise reading through information on each one to see which is the best fit for you. To encourage you to do so, I'll give you a little background on each one.
These are the most common structures for small business owners starting out in fashion related businesses.
Sole Proprietorship- Simplistic and the most common structure. Great option if you are the only owner. Think blogger/freelance writer. To get up and running you will need the proper business permits and licenses. Each state differs so do your homework to see what applies to you.
Ventures done in this form allow the owner full control, are inexpensive to start up compared to other forms, and provide easy filing options, come tax season. As sole proprietor one has to be wary of trouble, such as legal matters, where financial awards would be deducted from personal assets, if not covered fully by the business.
Partnerships- In this formation, there is one business, and two or more owners. Do your research on the three types, General, Limited and Joint Ventures, to see if either fits your company's needs.This is a good option if you need additional cash for your initial investment as well as additional skills added to yours. Consider shared profits, and possible disagreements amongst owners, when weighing out this option's pros and cons.
Limited Liability Corporation -This type of company structure provides limited liability features of a corporation and the tax efficiency and operational flexibility of a partnership. You will have limited liability if trouble was to come against the company. The start up costs aren't too steep and the legal paperwork isn't too complicated. If you have partners and one leaves, the partnership is dissolved which can be frustrating as might the mandatory self employment tax.
Learn more about these options and more on the SBA site, www.sba.gov, one of the my favorite resources during this process.
*Pictures are not my own.*
Sole Proprietorship- Simplistic and the most common structure. Great option if you are the only owner. Think blogger/freelance writer. To get up and running you will need the proper business permits and licenses. Each state differs so do your homework to see what applies to you.
Ventures done in this form allow the owner full control, are inexpensive to start up compared to other forms, and provide easy filing options, come tax season. As sole proprietor one has to be wary of trouble, such as legal matters, where financial awards would be deducted from personal assets, if not covered fully by the business.
Partnerships- In this formation, there is one business, and two or more owners. Do your research on the three types, General, Limited and Joint Ventures, to see if either fits your company's needs.This is a good option if you need additional cash for your initial investment as well as additional skills added to yours. Consider shared profits, and possible disagreements amongst owners, when weighing out this option's pros and cons.
Limited Liability Corporation -This type of company structure provides limited liability features of a corporation and the tax efficiency and operational flexibility of a partnership. You will have limited liability if trouble was to come against the company. The start up costs aren't too steep and the legal paperwork isn't too complicated. If you have partners and one leaves, the partnership is dissolved which can be frustrating as might the mandatory self employment tax.
Learn more about these options and more on the SBA site, www.sba.gov, one of the my favorite resources during this process.
*Pictures are not my own.*
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