Summary
In this module you learned about the various legal forms for a business, as well as some options for starting up your own business—namely, franchising and mergers and acquisitions. We finished up the module with resources to assist business owners (both aspiring and existing) in the operation of their business. The following are key takeaways from this module:
Forms of Business Ownership
Sole proprietorship, partnerships, corporations, and hybrids (LLC, LLP) are all possible options for the legal formation of a business. Each structure carries risks and rewards, costs and benefits. Which form of business ownership is best for an individual depends not only upon the nature of the business opportunity but also the level of personal exposure to risk the owner is willing to accept.
Types of Corporations
Corporations, although the most common form of business ownership, are the most complex structure to start and maintain. Fortunately there are options within the corporate structure that enable the business owner to take advantage of the limited personal liability and benefits of corporate organization. Which type of corporation an owner selects will largely be determined by the size, objectives, and vision for the business.
Franchising
For aspiring business owners who do not have the time, vision, or resources to “start from scratch,” franchising is a viable alternative for business ownership. Everyone is familiar with franchises—many industries such as fast food are almost wholly comprised of franchises. As appealing as this may seem, there are still risks to franchising for both the franchisor and franchisee.
Mergers and Acquisitions
One of the quickest ways for a business to expand into other markets or products lines is either to merge or acquire/purchase another company. Although this is common in today’s business environment, there are still many complex factors to consider before deciding whether a merger or acquisition is the optimal solution.
Assistance in Starting a Business
Starting, running, and/or expanding a business can be a daunting task, as there are legal, financial, social, environmental, and personal implications for nearly every decision. Fortunately for businesses, there are organizations and agencies such as the Small Business Administration and its sub-agencies such as the Office for Veterans Business Development to provide reliable, free assistance.
Synthesis
Now that you have come to the end of this module, you should understand that there is a range of possibilities for structuring, starting, and growing a business. Each choice has its advantages and disadvantages, and there is no single set of choices that will accommodate all businesses. Fortunately a number of organizations and agencies exist for the sole purpose of supporting new and existing businesses. Just knowing that there are choices to be made and a variety of possible paths is critical to the success of any business venture—large or small.