Leaps And Bounds

Leaps and Bounds in the World of Business

Charlotte Dianne Logsdon

BUSN105-1102A-04

Abstract

Motivation, ambition, and excitement of building a new business spin the minds of any potential new business owner. The intention of presenting an invention to support the business brings the owner to proceed to leap with no boundaries. Unfortunately, certain skills and knowledge of financing, managing, including the manufacturing process must be basic foundations to begin and grow to a successful business. Understanding success and failure and the commitment to accept the results of either one will strengthen the mind of a business owner of challenges and rewards. A small business owner of one or corporations of many partners all have the same goal. All want to be successful. Remembering that leaping into a business venture without boundaries will most likely result in failure. No business wants to fail.

Leaps and Bounds in the World of Business

Issue free of building a business without the foundation of skills and funding is likely to become a failure before it even begins. A goal of becoming a successful business owner with just ideas is not the first step for a bright business future. Ideas cost nothing, but time, patience understanding, and commitment will be a perfect start for a business venture.

A potential business owner while also the inventor of a product to support the business of only one owner presents the business of sole proprietorship. To understand the nature of the business and materials involved for manufacturing will help positive production to consumers. What best suits the goals of a new business owner depends on the interest in how to make it a success and how much control and involvement will be required to be a sole proprietor. The legal form of sole proprietorship usually entails just one person owning and operating the business without reporting to anyone except to themselves. This is an advantage to the owner having full control, and can usually be started with very little expense. Another advantage is the legal procedure is very simple to develop into the business. The best advantage is the profits earned do not have to be shared by the sole proprietor. Tax revenue is low, generating more money for business.

While the benefits of sole proprietorship seem rewarding with small prospects of failing, there are disadvantages. Even though all profits are collected to one, a sole proprietorship is also liable for all debts incurred by the business. If the business slows to the point of gradually failing, then creditors have options to make legal claims. These claims are not only on the assets

of the business, but also on personal savings and other investments. In this type of ownership, if the owner dies then the business legally dissolves causing the lack for the business to continue to exist. Being a sole proprietor presents the difficult task of borrowing money to begin a new business. Often banks and other lending institutions see this type of business as a risk especially if the business experienced failure early in operation and the owner is trying to rebuild. A potential owner may consider the option of another type of business such as a general partnership.

General partnership is similar to sole proprietorship, where the business is owned by more than one person by forming business partners. The money invested may be of equal or unequal sums. Profits are shared equally or may be collected in proportion to the investment. A silent partner may invest all funds that may be needed to support the business, but will have no management role in the operation. Another partner may invest nothing but labor into the business. If this is the arrangement, then the financial partner usually owns the entire business. As the business continues to operate then the labor partner slowly gains the ownership (stake equity) in the business. One financial advantage is that banks prefer to lend money to a partnership business. This helps the business to invite