Category Archives: starting a business

Starting a Business – Brick and Mortar Franchise Business Or Top Tier Internet Business Opportunity

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So you would like to start your own business, but not quite sure where to start. Do you want to buy into a small business Franchise, or start an Online Business?

I have put together a line by line assesment. foremost and most apparent, with a small business brick and mortar franchise, your marketplace is limited. A global market is yours to be had with an online business. What about initial cost? A small business brick and mortar Franchise

has an purchase Franchise fee from $10,000 to $1.1 million. In additon to a reserve that is normally required of $50,000 to $250,000. With an Online Business, up front and marketing cost $500 to $25,000. A reserve is not crucial because there are many effective ways to market online that have little or no cost, but I would suggest $1,000 to $5,000. A faster return on investment and more marketing options will be available.

Return on investement with a brick and mortar franchise average 3-5 years. With an Online Business it is 2 to 12

months. This needs some added explanation or foot note. One thing I learned in my real estate franchise is that when I got to the point of profitability, space and expansion ability had also been reached. So the only way to increase profits was to get bigger or take on another location (franchise). In other words, the only way to grow was to go back into the red. The other thing that happened is focus was turned to furniture, design and negotiating leases, hiring new employees and missing from the major source of profit.

Starting a Business? Protect Personal Assets Through Business Entity Formation

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Many small businesses start as a part-time effort that grow over time, and eventually become a profit generating venture. One of the difficult questions for a small business owner is, “When do I need to form an entity?” A follow-up question is which type of entity to form such as a corporation (sub-chapter S or C Corporation), limited partnership (LP), limited liability partnership (LLP), or limited liability company (LLC).

The business person who is a sole proprietor should be aware that his/her liability is virtually unlimited. When you do not have the protection of an entity under which your business operates, it is your personal assets that are at risk. Therefore, if a party were to sue you, your personal assets would be exposed. Many states, such as Texas, offer homestead protection so that creditors cannot foreclose on an individual’s home, but such laws vary from state to state.

The formation of a legitimate business entity offers varying forms of protection for a business person’s personal assets. Entity formation is the process wherein one establishes an entity authorized to conduct business within a certain jurisdiction. In Texas, one would file entity formation papers through the Secretary of State’s office. Each state has a government office that handles entity formation. Generally, an entity can be created for as little as $50-$250 per application. Though this step often occurs later as a business grows, it is a small financial investment to make early on. Creating an entity also gives your business credibility in that you have taken the steps to define it as a functioning entity. The most common entity formed by a new start-up business is the LLC (Limited Liability Company). Limited liability companies are designed like partnerships, and therefore suitable to small businesses, but have asset protection similar to a corporation. When your entity is set up you will also receive a tax ID from the state comptroller. Therefore, you will likely have to file a franchise tax return in your state(s) of operation. You should also request a federal tax identification number (FEIN). You may want to consult a CPA to determine which type of entity offers the most tax advantages in your state.

Starting a Business With No Capital–do you Have What it Takes?

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Do you want to start a business, but you have absolutely no money to invest in it up front? Don’t despair! You’re certainly not alone and you may find that your business will actually turn out better. Chances are your business will be healthier and better equipped to respond to change. You’ll learn creative new ways to handle different challenging situations. However, success will require a healthy dose of time and commitment to hard work on your part.

When you don’t have the money you think you need to start a business, you may feel isolated and alone. The truth is that starting a business with zero funds is so common that there is a word for it–bootstrapping. The term comes from the idea that you can “pull yourself up using your own bootstraps.” Although that might be physically doubtful, it is possible to creatively gather and apply scarce resources to start a business. It may not be the most comfortable way to start a new business, there are advantages to avoiding entangling relationships with investors, lenders or venture capitalists.

Those who support the practice of bootstrapping your new business into existence point out that companies started in this way are usually healthier and more stable in the long run. Why would this be so? Imagine you’ve just started a new business with a big wad of cash courtesy of some optimistic investors or venture capitalists. In this situation, there is very little pressure to make money immediately. There’s no real penalty for wasteful spending or loss of focus.