The purpose of this article is to examine the business legal structures, observe business models and examine possible ways to scale a business. I will present views and concepts in ways to get your mind thinking so you can take what information is needed to increase your business.
In article, I will present views and concepts in ways to get your mind thinking so you can take what information is needed to increase your business success.
Not being able to find money to scale a business is an excuse plus you don’t need permission from funders helps scale a startup, unless you want money from funders. Here are three things to consider when starting a business and looking at legal structures.
1) Think Creatively
Check out how this business still found a way to start a business with a solid business structure and effective business model and successfully scale their business. A person started as a teacher in need of tools to instruct web designers in the late 1990s, the offerings at bookstores were bland.
So she began producing training films that better educated her students tutorial by tutorial, her company helped software developers and designers improve their skills.
She spent two decades building a content library and tech assets that had enough scale to entice LinkedIn, to pay 1.5 billion to acquire the company. You don’t have to structure your business around getting funds from lenders unless you choose to.
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2) Know What Legal Structures Work Best For You
So let’s go over the different types of business structure. Sole proprietorship, a sole proprietorship is one individual or married couple in business alone. Sole proprietorships are most common form of business structure. This type of business is simple to form and operate and may enjoy greater flexibility of management.
Fewer are legal controls, a fewer taxes. However, the business owner is personally liable for all debts and carried by the business general partnership. A general partnership is composed of two or more people who agree to contribute money, labor, or skill to a business.
Each partner shares the profits, losses and management of the business. And each partner is personally and equally liable for debts of the partnership. Former terms of the partnership are usually contained in a written partnership agreement, limited partnership.
A limited partnership is post of one or more general partners and one or more limited partners. The general partners manage the business and share fully in its profits and losses limited partners share in their profits of the business, but their losses are limited to the extent of their investment. Limited partners are usually not involved in the day to day operations of the business.
Filing with the Washington security of state is required limited liability partnership. A limited liability partnership is similar to a general partnership except that normally a partner does not have personal liability for the negligence of another partner.
This business structure is used most by professionals so much as accountants lawyers limited liability limited partnership, a limited liability limited partnership is a limited partnership that chooses to become a limited liability limited partnership by including a statement to that effect in its certificate of limited partnership.
This type of business structure may shield general partners from liability for obligations of the limited liability limited partnership corporation. A corporation is a more complex business structure.
A corporation has certain rights, privileges and liabilities on those of an individual doing business as a corporation may yield tax or financial benefits, but these can be offset by other considerations, such as an increased licensing fee or decreased personal control.
Corporations may be formed for profit or nonprofit purposes. Non profit corporation. A nonprofit corporation is illegal entity and is typically run to further an idea or a goal rather than in the interest of profits. Many nonprofit serve the public interest, but some engage in private sector activities.
If you’re non profit organization is or plans to raise funds from the public, it may also be required to register with the charities program of the Washington security of state charitable activities may require additional registration.
A limited liability company is formed by one or more individuals or entities through a specific written agreement. The agreement details the organization of the LLC, including provisions for management, assignability of interest, the distribution of profits and losses. A limited liability company are permitted to engage in any lawful for profit business or activity other than banking or insurance trust.
A trust is a legal relationship in which one person called the trustee holds property for the benefit of another person called the beneficiary joint venture joint venture is formed for a limited length of time to carry out a business transaction or operation tenants in common.
A tenant in common allows two or more people to occupy the same business or retaining separate identities in regards to assets, liabilities resulting from business activities association. An association is an organized group of people who share in common who share in common activity or purpose.
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3) Understand What Business Model Will Work Best For You
Now what are the different type of business models I’m gonna go over? Just a few. A business model is a conceptual structure that supports the viability of a product or a company and includes the purpose and goals of the company and how it intends to achieve them. There are numerous business models, direct sales model while direct selling was initially the primary route to market production efficiencies.
Coupled with improvements and transportation meant producers could reach a much bigger market. And this resulted in the preeminence of retail distribution model for many years. However, the emergence of the internet as a distribution channel meant that producers could dis intermediate costly resellers and sell directly to customers themselves in effect going the full circle in the PC manufacturer.
Dell is a great example of a company who was very focused on the direct sale business model franchise model opening a franchise is, is essentially buying a working business model in a particular industry.
You pay royalties for the privilege, but get access to a winning receipt, a support network, and an established brand two famous franchise business models are McDonald’s and subway the freemium model.
This is where the business gives away something for free in return for your personal detail, so that they can then market to you and hope to build a relationship so that you from them in the future. It is typically used in service based businesses where the lifetime value of the average customer is high and is increasingly popular with internet services such as Spotify, Skype, or flicker.
Many of these offerings have similar cost structures where the more cost of serving an additional customer tends to be towards zero. The core free offering then acts as a gateway to paid service. For example, with Spotify, the free version comes with adverts that does not pay The recurring revenue model subscription model With the recurring revenue model.
The aim is to secure the customer on a long term contract so that they are consuming your product and services well into the future. Given that the cost of the customer acquisition can be high retaining customers is a primary goal for most businesses.
So most utilities, most utilities providers operate under this model. Magazine publishers have also been looking to expand this portion of their business for some time offering heavy discounts to subscribers, rewarding them over individual discreet purchases.
Next is advertising model. The a model became popular with the growth of radio and TV, Where the TV stations earned revenue indirectly from people looking to promote services to the audience they attracted rather than via customers, Rather via consumers paying radio and TV stations for the consumption of, of their TV programs.
Facebook pay per click ads, affiliate model, and affiliate is simply someone who helps sell a product and return for commission. However, they may never actually take ownership of the product.
They simply get rewarded for referring customers to a retailer when they make a sell. Again, this business model has been a huge success, given the ease with which the internet facilitates it.
Now let’s look at another type of business. I would like to use this as an example. First, there was a business woman who was in the business of knitting and insulting. She hired a few employees, but her issue was that at full maximum productivity, her business could only make 2000 products a month. Therefore she would never profit over that amount for the month. So her scaling tactic was to create training videos.
One on one sessions, trainings, information products on creating certain fabrics and charge for downloadable company designs and guides to knitting and sewing. After she scaled her business, she made over $600,000 in one year. Absolutely amazing. So there is no one right way to scale a business.
Often it’s through create of thinking and observing how others have scaled their business to incredible points of success. Here are just a few ideas to consider when aiming to scale your business.
Think if I had over a million orders in one year, could I get these order out fast and efficiently? If you can, then how about 10 million or a hundred million orders in a year?
If you couldn’t get that amount of orders out, begin thinking and research in ways to develop a business system or making products or services offered by your business, that would enable you the capacity to fulfill all of these orders.
Also, you must keep in mind, not just the capacity of filling large volumes of work, but actually getting that many need people or potential customers to buy from your business.
Bring on a partner or form of business partnerships with other companies, a partner can provide much needed cash, as well as skills. Take an honest look at what skills you lack and find someone with experience in that area. For example, you might not have general management experience. So you can partner with someone who has a MBA.
You can find a partner by taking, by talking to your network in your network, and several events such as like the local chamber of commerce. Although always thoroughly vet a partner before cell them, half of your business. For example, you should pull the credit history to make sure they are financially responsible.
Also meet to talk about their goals for the business. You might find out they have vastly different visions for where your company is at. It is better to find out this now than later.
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Conclusion
Identify your barriers to growth. Once you have objectives, part of developing a strategy to scale involves thinking about positive barriers to grow, be honest with yourself, what factors could stop your ambitions?
What can you do to address your weaknesses and the they could pose lastly, learn from successful competitors who have scaled, think about how they’ve done it, how they succeeded, for example, finding out how many, how, how many staff they now have, could give you a rough idea how, how many you’ll need, where are they selling and how understand their business model and learn from their lessons to better your situation as you attempt to increase your business success.
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