It's Time To Start That Business

Starting a business is not a far-fetched dream. Creating a company is attainable; you can begin the process today. Three primary business ownership structures exist Sole Proprietorship, Partnership, and Corporation. These three different ownership structures have various positive and negative attributes that may affect you differently based on the functionality of your business. Let's begin with structuring your business as a sole proprietorship. 

Panoramic Ocean Creator Kaylen cheesin' it up after packaging orders.

A sole proprietorship is when a single person owns a business. A sole proprietorship is the simplest structure. You are the business. There is no legal separation between you and your business. In the simplest terms, your business's profit is your profit. Your business's debt is your debt. You will pay personal taxes on the income from your sole proprietorship. In this structure, you have unlimited personal liability. If you default on any loans, creditors can make a claim against any asset in your name: vehicles, home, investments, land, but it doesn't stop there. Creditors can also go after family members. Even with having unlimited liability, Sole proprietorships are popular because they are easy to set up. Forbes Advisor promotes five steps in creating a sole proprietorship: 

1. Decide on a Business Name- at its initial creation; your legal name is your business name. I recommend creating a separate business name. This creation of a different name is called a DBA. 
2. Register your DBA Name- "Requirements to file a DBA vary from state to state, and you may need to file at either the state or local level. Check with the office of the secretary of state or county clerk's office where your business is located."
3. Buy and register a Domain Name- CREATE THAT WEBSITE: Shopify, Wix, and WordPress are all great options. 
4. Business License and Permits- You can find what license/permits your business needs by visiting your state's website, county clerk's office, or city officials.
5. Open your business bank account- Opening a separate bank account for your business will help you stay organized. This account will help you track your expenses as well as your profit. When creating your business account, you can also receive a card (debit) connected to that account.

Packaging orders after a 5am shift and then heading straight to the post office. 

The second most common business ownership structure is a partnership. A partnership is a company jointly owned by two or more people whose co-ownership shares the rights and responsibilities. Similar to a sole proprietorship, partnerships do not pay an income tax on the business. Instead, they file a tax return to show how much profit their company made. The partners pay taxes on business profit as personal income. It is important to draw your attention to the fact that there must be a "general partner" who shoulders unlimited liability for the business's debts in any partnership. 

The third most common business ownership structure is a corporation. Shareholders own a corporation. This ownership offers the most protection to the business owner. Its limited liability means that the debt and any other financial gain/loss belong to the corporation. You, as an owner, may lose the money you invest in the company, but your personal assets are protected. The biggest downside of a corporation is taxes. Corporations pay income taxes on their profits. If you, as the owner, are getting a payout from the business, you will also pay tax on that personal income. Corporations are victims of "double taxation." Starting up a corporation and incorporating it involves a heavy amount of paperwork. You will file your corporation through the state and follow your state's requirements for issuing stock. It is legal for you as the business owner to issue stock to yourself and be a sole shareholder. 

Panoramic Ocean was a dream, but the determination of all those involved made it a reality. Starting your own business in whatever market you want to pursue should be more than just a dream. Continue on your journey, and always #bepurposeful. 

A reminder of why I started Panoramic Ocean.