All About Structure: Understanding the Various Types of Business Ownership

StrategyDriven Starting Your Business Article |types of business ownership |Understanding the Various Types of Business OwnershipNot all businesses are alike right down to their ownership structure. This structure forms the basis of all business operations. Structure to a business is what the skeletal system is to us, humans.

A business structure boils down to its ownership arrangement. Most people are not familiar with business ownership types. This is an aspect that many start-ups overlook, and it ends up costing them.

There are many types of business ownership, and not all types suit every business. Choosing the most suitable ownership should be a crucial part of your business plan. Once you do so, you can get your business off on the right foot.

You’ve probably heard of a lot of business ownership disputes. Both large and small companies are disposed of ownership disputes. Understanding the business ownership types will help you avoid such embarrassing scenarios in the future.

In this piece, we’ll expound on the different types of ownership for businesses. That way, you can find what ownership structure best suits your business.

Importance of Business Ownership Structures

Business structure is pretty important, but only if you have the right one in place. The wrong business structure beats the point of having a structure in the first place. That’s why pinning down on the most appropriate business structure is crucial.

Ownership is structured because it provides a framework for handling legal matters. It portrays professionalism and gives potential investors confidence. Certain ownership types open up opportunities for shareholders and stakeholders who will be invaluable to your company.

Common Types of Business Ownership You Could Consider

There are many forms of business ownership types. As a business owner, you have to settle for the right type to engender your businesses’ success.

The following are legally-recognized business ownership structure you should consider for your business:

Sole Proprietorship

This is the most basic type of business ownership. As the name suggests, the business owner owns everything in this type of business ownership.

A sole proprietorship means you have complete control of the entire enterprise. You don’t even have to have a physical enclosure for your business. Plus, you get to keep all the profits, but you also have to deal with all the debt.

Pros

  • You have complete control of the company and can make all key decisions
  • Fees and business licenses are inexpensive depending on the state where your business is
  • You may be liable for tax deductions since you and your business are in practice considered as one
  • Dissolving the business will be easy without the need for too much formal paperwork

Cons

  • It will be difficult to hire new employees or scale-up operations
  • You have to do everything, which could be overwhelming
  • You also have to deal with all losses, and debt, which may come out your own pocket

Limited Liability Company (LLC)-Manager Managed

A group of members owns the business, and they all share the company’s liability. A managing member handles all business activities.

This business ownership separates your business from personal assets. As such, legal implications will not touch your property or the members’ personal property either.

For instance, if a lawsuit requires you to compensate or pay for something, you won’t have to tap into your personal assets. This ownership type basically considers you and your business as separate entities.

This structure is ideal for people who are big risk-takers but want to protect their stuff if everything goes downhill. However, you still stand to lose a lot if the business fails. That’s why smart LLCs settle for a legal business operating agreement.

Pros

  • It is not difficult to set up, depending on your state
  • The managing member will take care of all operations
  • Individual members share responsibility which you can change easily
  • Gives small and medium businesses a professional outlook
  • Depending on your state, you may qualify for tax deductions

Cons

  • Will completely crumble if key members exit
  • Managing members typically have greater liability
  • You have limited decisive powers if you’re not a managing member
  • You would share losses even if they were brought about by a single member

Partnership

It’s hard to establish a successful business on your own. That’s why most people settle for partnerships to navigate the convoluted field of business.

Partnerships vary because of the different number of partners and also shared responsibility between partners.

Partnerships mainly boil down to two types. These types are:-

General Partnerships– General partnerships are partnerships mostly between two individuals. Each party shares equal responsibility and liability in the firm.

Limited Partnerships – In these types of partnerships, one person takes charge of the company, while the rest of the partners are only investors.

Pros

  • Financing and responsibility is shared among members
  • Flexibility in terms of ownership and responsibility among members
  • It’s easy to set up the business structure
  • An investor may invest heavily, for a portion of the ownership

Cons

  • Trust and co-operation is imperative to a successful partnership
  • A partnership between two individuals can have many tied votes on crucial matters
  • Other partners’ actions may put you at debt without any involvement
  • Might need a formal partnership agreement to avoid any disputes

Corporation Board Member

Corporations are large scale companies. These companies delegate the decision making aspects of the company operations to a board of directors.

This ownership structure is one of the most complex business structures. Understandably so, it engenders the ownership of very large multinational companies.

The board members have a lot of responsibility in managing the company. The board dictates the company’s ultimate mission and also sets targets and goals the company must achieve within a given time.

There are a lot of meetings with corporations. Only high-level professionals or heavy investors qualify to be on the board of directors.

Choose a Business Ownership Type That Suits Your Business

With the many types of business ownership, finding the right one for your business shouldn’t be an issue. However, think critically about the type of ownership you settle for. It will determine many aspects of your business in the times ahead.

Partnerships are good for small and medium-sized businesses. If you’re a very small startup, then you can start off as a sole proprietorship. As the business grows, you can explore other ownership options to adapt to the growth.
For more insightful reads on all matters business, remember to check out our other pieces.

Bootstrap your online business – Top tips to stretch your start up budget

StrategyDriven Starting Your Business Article |Bootstrap your Business| Bootstrap your online business - Top tips to stretch your start up budgetStarting up an online business in today’s economy is no easy feat, as you’ve already got hundreds of thousands – if not millions – of other businesses already established and have the upper hand on you. However, this doesn’t mean it’s impossible by any sense of the word. You just have to be clever with your process so that you don’t blow your budget, you stand out from the crowd and most importantly, you hit the ground running. Check out these top tips to stretch your start up budget.

First thing’s first, you’ll need to build your website and the first question you’ll need to ask yourself is what kind of hosting to go for. There are pros and cons with each, so here’s a handy piece on VPS hosting vs dedicated hosting. From there you can choose which will suit your needs and your budget best.

Do the marketing yourself – it will save you tonnes of money

Marketing is a huge part in raising a business from the ground. After all, how else would people know you exist?! A dedicated marketing team can really help boost the online presence of a business but unfortunately, that’s also a rather expensive option. Doing the marketing yourself will help keep back a lot of your budget.

There are a few things that you may want to consider spending a small amount of your budget on:
Marketing books to improve your knowledge and skills. Amazon is loaded with books for each platform and yes – all of them are important!

Remember to spend a little of your budget on Google Ads campaigns – Google can really help boost your reach!
Pay the monthly fee for programs such as Adobe to create graphics and mailers for your marketing – it will make a huge difference to the quality!

Outsource rather than hire

You will undoubtedly need a team of people to help lift your business from the ground, but when you don’t have a large budget it can be difficult to employ people for long periods of time. That’s where outsourcing comes in, and it can be a very effective way of having work completed without the dedication of an employee you need to pay every week/month.

You can list the jobs you need fulfilling on websites like Upwork and Fiverr, and let applicants come to you with their skills, history and also their price demand. You can then choose the right price and skillset for your budget. The beauty of outsourcing is that once the work is done, you can go your separate ways. However, that’s not to say that in the future you won’t collaborate again!

Use influencers

Influencers play a huge role in purchase decisions on the internet, and that’s why they’re so effective for new businesses like yourself to use. Think of your favourite influencer. If they were to say, talk about the latest gadget that’s well within your interests, you’d at least check it out with a possibility of buying, right?

Browse Instagram for influencers within your business niche and contact them for their price list. Sometimes, a simple quid pro quo situation is all that’s required for an influencer to promote your business. For example, if you’re selling a particular product online, why not send them a sample pack to test, review and keep? It’s an extremely effective way of getting your name out there for a minimal cost.

Work from home rather than rent an office space

Another expense that you could eliminate is the rent you’d spend on an office space. The beauty of an online business is that you have the option to work from anywhere in the world. Load up yours and your colleagues (if any) computers or laptops with all of the necessary programs you’ll need and save your business’s budget by working from home!

Working from home can be difficult as it’s easy to become distracted and neglect your working duties. Creating a space in your home dedicated to working will help eliminate this issue. Why not check out these fantastic ways of making your home office the perfect place to work.

Starting an online business with a very minimal budget is hard work but very doable! Follow these tips and you’ll be well on your way to becoming an online business that everyone thinks of!

Online Businesses Popular for Senior Citizens to Start

StrategyDriven Starting Your Business Article | Online Businesses Popular for Senior Citizens to StartRetirement does not need to mean the end of work for senior citizens if they don’t want it to. There are many businesses that even those in need of in-home senior care can start. These businesses can give retirees extra income while still allowing them the flexibility to enjoy their retirement.

These 6 online businesses are good for retirees to start.

Senior Citizens Can Start an Online Genealogy Researching Business

Genealogists research the history of a family, and they can use the Internet to access genealogical records and create a detailed family tree for clients. This work is research-intensive so people are willing to pay others to do it for them. This makes it an ideal home business for retired seniors with time on their hands.

Although much of the research can be done online, genealogists sometimes need to go to libraries, churches or courthouses. They may also need to conduct interviews with people. This part of the job is excellent for seniors who enjoy getting out and socializing with others.

Starting a Virtual Assistant Business Can Help Retirees Earn Money

Virtual assistants are like administrative assistants who work remotely. They can help a business with a variety of tasks such as research, social media management, bookkeeping, data entry, managing email, booking travel, calendar management and more.

Senior citizens who want to start an online virtual assistant business need to assess the existing skills that they can offer and then decide if they want to learn new skills to add them to their offerings or just focus on the ones they already have.

Retirees Can Start a Writing or Blogging Business

There is a great need for quality content online, and senior citizens who want to start their own business can call upon their years of experience and knowledge to write that content. In fact, writing is an excellent home business for seniors who want to work entirely from home because all writing, research and telephone interviews can be done from the comfort of a home office.

Retirees who want to start a writing or blogging business should create a website with samples of their writing, perhaps creating their own blog that touches on the subjects they can write about. This will give them a portfolio to point potential clients to.

A Photo Business is Great for Senior Citizens with Tech Skills

For an older adult who knows their way around Photoshop or other photo enhancing tools, starting an online photo business is ideal. The business can offer services such as photo restoration of old or damaged photos, digitizing slides, negatives or prints, touching up digital images and more.

An investment in some hardware and software may be necessary for a senior citizen to start this business. Once that investment is made, a creative senior can make extra retirement income helping others enhance and preserve their photo memories.

Retired Teachers and Professionals Can Start an Online Tutoring Business

The ability to connect with others through video chat makes online tutoring easy. Former teachers and other professionals can offer their expert knowledge in subjects that students need to be tutored in and do that tutoring online.

This is one online business seniors can start that they might be able to get underway just by word of mouth. An older adult who announces on social media that they would like to tutor others in a subject they qualify to teach may find students very quickly.

Senior Citizens with Web Design Experience Can Start their Own Business Designing Websites

There are many website building sites such as WIX or Squarespace that make it simple to get a website up and running quickly. Tech-savvy seniors who take the time to get to know a couple of these sites can start a business that builds websites for others.

A senior who wants to open a company that helps other retirees may even consider starting a website designing business for other senior citizens that want to start their own online businesses.


About the Author

StrategyDriven Expert Contributor | Kelsey SimpsonKelsey Simpson enjoys writing about things that can help others. She lives in South Jersey and is the proud companion to two German Shepherds and spends her free time volunteering in dog shelters.

Can A Leased Car Be Used As A Taxi?

StrategyDriven Starting Your Business Article | Can A Leased Car Be Used As A Taxi?Although it isn’t a question we get asked too frequently, someone occasionally asks whether or not a leased car can be used as a taxi. Whether you are just beginning to drive a taxi or have been driving for years, you may be surprised by how inexpensive it is to lease a vehicle. Can you lease a car for use as a taxi?

It depends. The section below examines the different circumstances under which a leased car can or cannot be used as a taxi.

Can Leased Vehicles Be Used As Taxis?

The answer is yes, but only in certain situations.

You most likely won’t be able to find a vehicle to lease from a standard broker. Some businesses, however, specialize in vehicle leases for cars that are going to be used as taxis. In close to three years at the OSV, I only happened upon one company that had specific deals in place for private hire vehicles.

Even though it may be challenging, there are ways to make it happen. The key is to find a company that specifically offers leases on vehicles that can be used as taxis.

Can I Use A Personal Contract Purchase Vehicle As A Taxi?

These vehicles can only be used as taxis when they are leased under a special agreement from a company that deals specifically with these types of leases. What happens if you have a personal contract purchase, though?

Even though personal contract purchases and personal contract hires are similar, they differ in what happens at the end of the contract. At this time, you can choose to:

  • Buy the car for a specific predetermined amount
  • Exchange the vehicle in part for a new one
  • Return the vehicle (you still will need to pay for any condition problems or extra mileage)

Based on that, can a personal contract vehicle be used as a taxi?

Sadly, it can’t. The vehicle is technically owned by the company providing the financing until the end of the contract. At that point, you can buy the car, making you the owner. If you don’t wait until the contract is up to begin using the vehicle as a taxi, it will depreciate too quickly. There is no way for the finance company to know whether or not you will buy the vehicle when the contract is over. After the contract ends, however, if you decide to purchase the vehicle, it can then be used as a taxi.

Can You Use a Leased Vehicle As An Uber?

The popularity of Uber, a ridesharing app, has exploded over the past few years. Unfortunately, leased vehicles cannot be used when driving for Uber. There is one exception, however. Toyota has invested in Uber so that Uber drivers now have special leasing options. Although you can’t lease a vehicle from a regular company, you may be able to find one through companies that deal specifically with leasing vehicles to Uber drivers.

In the US, Uber partnering with a company to provide drivers with leased vehicles is an interesting development. Currently, however, there aren’t any signs that the same options will be made available in the UK.

Why Aren’t Leased Vehicles Allowed To Be Used As Taxis?

Cars that are used as taxis typically travel much greater distances and experience more wear and tear than standard vehicles. These are the primary factors preventing leased cars from being used as taxis.

Vehicle leases always restrict both the mileage and the amount of wear and tear the vehicle can experience during the lease period. For instance, some leased vehicles are only allowed to be driven 50,000 miles per year. Financing companies may provide further restrictions, limiting the annual mileage to anywhere from 35,000 to 45,000 miles. Taxis are driven for hours at a time, which causes the miles to quickly add up. Cars that have high mileage generally don’t retain their value. Financing companies don’t want to take the risk of owning a car that is worth very little after the end of the lease period.

A similar concept applies to the condition of the vehicle. Because taxis are driven so much, they are more likely to experience excessive wear and tear. This decreases the value of the car and may result in the need for costly repairs. If you read the lease, it usually will state “not for hire or reward”. As a result, you are not allowed to make money off of the vehicle itself.

Ultimately, financing companies don’t want to lease cars that they can’t recoup their money on at the end of the lease term.

How Can I Obtain A Lease For A Vehicle I Can Use As A Taxi?

As was already stated, most brokers don’t offer lease deals for vehicles that allow them to be used as taxis.

There are companies out there, however, that specialize in leasing vehicles to people who want to use them as taxis. You may have to dig a little bit to find these companies, however.

A good place to start is by speaking to your broker. If you don’t already have one, find an experienced broker in your area. Talk to them about whether or not they know of any companies that offer vehicle leases on cars that can be used as taxis.

Websites such as CarLoanWarehouse, ethosfinance.co.uk, and TheTaxiShop provide lease deals and financing options for taxis. We can’t comment on the quality of these companies, however, since we have never worked with them before. If you decide you want to give them a try, do careful research ahead of time so that you can make sure they are the right choice for your needs.

If you want to find a vehicle that you can lease and use as a taxi, you will need to look for a company that specifically deals with these types of leases. Everyday leasing companies and brokers generally don’t offer deals like these. That means that you will need to do quite a bit of research to find well-respected companies that handle taxi-related lease deals.

When you find a vehicle compare you taxi insurance for the best price.

What are the Best Green Business Ideas?

StrategyDriven Starting Your Business Article |Green Business|What are the Best Green Business Ideas?With the current concerns about climate change, it is more important than ever that entrepreneurs are able to establish green and environmentally friendly business ideas that can both help to protect the environment and remain profitable. Not only this, but due to an increasing public awareness surrounding global warming, sustainable products and businesses have now started to become much more coveted than previously. With this in mind, here are some of the top business ideas for eco-warriors.

CBD Oils and Tinctures

CBD oil is relatively new as a natural remedy due to the recent changes in the laws surrounding it, and yet many people are seeing the substance as a sustainable and eco-friendly product that can be used without the harmful side-effects of other medicines. Not only does CBD need less water than other crops to thrive, but the production of hemp can be used for a vast variety of products, including the CBD oil that you are interested in. Choosing to invest in white label CBD tinctures can then help to provide your target audience with a more natural way to protect their health and treat long-term health conditions, as well as aid their mental health.

Sustainable Crafts

Many people are looking for custom items that are created with the environment in mind. From upcycled furniture to creating products out of recyclable materials, there is a vast amount of DIY projects that you can try your hand at. This can also include creating a sustainable fashion brand, which uses organic cotton and other eco-friendly fabric fabrics.

Eco-Friendly Travel

Considering ways to live more sustainably does not often provoke people to restrict their travel plans. However, many people are looking for ways to travel in an eco-friendly way and participate in sustainable activities, from hiking to kayaking. This includes taking tourists to participate in conservation-projects or creating eco-friendly accommodation, such as hotels that have solar-powered electricity. Many of these businesses also give back to the communities that they visit, such as helping to support independent creators and ensuring that their activities are not exploitative.

Essential Oils

Many of your potential eco-minded clients are looking for natural ways to treat common illnesses, and one of the major ways to do this is through essential oils, like lavender and tea-tree oil. These oils have been proven to help stress, anxiety, migraines, inflammation, and skin conditions. As well as creating and branding your own products, you should also consider the benefits of opening your own aromatherapy clinic if you are willing to become fully licensed.

Organic Food

Organic food has seen an increase in popularity due to the fact that organic farmers are focused on providing their clients with food that has been grown using methods that protect the environment, such as avoiding the use of chemicals and pesticides, as well as genetic modification. Once you produce your products, you could consider selling them on local food stands and at farmer’s markets, as well as considering distributing them on the internet, where clients actively look for niche, eco-friendly brands.