Business Growth Masters, LLC
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We post questions of general interest here. If you have a specific question, please email it to us. We'll respond within 2 business days.
Do I really need a business plan? A business plan is considered to be the "road map" for your business operation. A well-written business plan will set forth the goals for your business and guide your current and future operations. Every plan should include information on the history and development of your business, the product or service you offer, your marketing strategy, the ownership structure, personnel requirements, and the financial plan of the business. For the startup business, a business plan acts as a "feasibility study" to determine whether the potential business is viable. A completed business plan can also be used as a tool to gain funding for the business, or to recruit employees. However, the greatest benefit of the plan is that you, the business owner, will have a clear understanding of your business, industry, and marketplace. This knowledge will lead to better decision-making, and ultimately, increased profitability. How do I get a loan from the SBA? The SBA generally does not make loans. They guarantee loans. In order to take advantage of this, you must first take your loan proposal to a bank. The bank will say yes, no, or maybe. A maybe means that you are right on the line; you had a good proposal but the bank is worried it may be a little too risky. At this point, everything that was given to the bank to evaluate your loan proposal will be sent to the SBA to evaluate. The SBA may agree to guarantee up to 80% of the loan. This reduces the bank's risk so they may be more likely to approve the loan request.
Which form of ownership is best for my company? The following are the most common forms of organization for small businesses: Sole Proprietorship - A sole proprietorship can be conducted by a single individual, or by an individual and his or her spouse. This is the easiest method of organizing your business. The major disadvantage of the sole proprietor is that the individual owner is personally responsible for all debts and liabilities of the business. This means that all of your personal assets, not just the assets of the business, are at risk. General Partnership - this is an association between two or more individuals to conduct business. The major disadvantage to a partnership is that each partner is personally liable for his share of the businesses debts and is liable for the other partner's actions. Limited Partnership - is a partnership formed by two or more persons who have one or more general partners and one or more limited partners. Limited partners are limited in their liability to the amount they have invested in the partnership, and are limited in their participation in the management of the business. C Corporation - is an organization that is organized under specific provisions of the General Corporation Law. As the owner, you will be an employee, and your earnings taxed. A corporation can be expensive to start, but offers the protection from personal liability for the owners. Subchapter S Corporation - Similar to the "C" Corporation, the "S" corporation offers all the benefits of a corporation, but with a different tax structure. S corporations are limited to one class of stock and no more than 35 shareholders. Limited Liability Company (LLC) - combines the limited liability protection of a corporation with the flexibility and pass through taxation of a partnership. Like the shareholders of a corporation, the owners (members) of an LLC are not personally responsible for the debts or liabilities of the LLC.
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