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  • Subject Name : Business Management

Types of Legal Structures in Starting a New Business

Introduction to Starting a New Business

This study critically evaluates the advantages and the disadvantages to start a new business by individual or a small group of people. Starting a new business is one of the most challenging as well as exciting thing that one can do so. There are lot of challenges faced in the initial days which sometimes leads to emotional stress(Biech, 2019). There are lots of pros and cons of starting a new business for an individual or a small group of people who have no experience and they are just trying to be an entrepreneur. This study will evaluate the advantages as well as disadvantages by using some specific examples. Apart from this, this study was also discuss the types of legal structure that the individual or a small group of people might adopt in order to accomplish the define goals of the organisation. At the end of the study a justifiable conclusion is also provided.

Advantages of Starting a New Business

Starting a new business is one of the most challenging thing but despite of that it is one of the best experience that an individual have in his or her life. Big business owner can be an extremely rewarding; however it needs a lot of courage to start a new venture and bringing it on the path of success. Some of the advantages are as follows:

Independence

Business owner is the one who is the boss of the company as well as for himself. All the decisions are made by him as per the needs and demand of the situation. The term independence here with refers to the control that a person have over the destiny to make the business successful and recognise in the market. Within group of people all the decisions are decided as per the needs and requirements of the present situation and with the combined thoughts of each individual (Chowdhury, 2017). Being boss is one of the most advantages thing as well as the challenging thing. Being boss means you have all the rights and decision making ability to convert the challenges into the opportunity. No one is ruling you and you are ruling the business is the biggest advantage of being an entrepreneur.

Personal Satisfaction

One of the biggest advantages in the business is that it feels to have satisfaction for the individual. Personal satisfaction is one of those things that each individual should have in order to live his life with full happiness and satisfaction. Being entrepreneur is a different thing and doing job under any other person is it different thing. If a person wants to be an entrepreneur then personal satisfaction will comes up with doing a business not working under others(Knight, 2019). Starting a business is one of these personal satisfactions that a person acquires who doesn’t want to work under any other person.

Creative and Innovative

Being an entrepreneur and a boss of your business means you can create and innovate any product and serviceneeded for a business. Most of the big organisation such as Apple and Microsoft are started by an individual and because of their innovation and creativeness they accomplish the undefined goals andunlock opportunities for the world and for themselves. This is one of the greatest advantages of having a business because all the decisions are made by an entrepreneur and the responsibilities of decision is also on the entrepreneur. No other person is going to judge you or scold you for the decision you made for the organisation. If the success comes then it is yours and if the failure comes then also it is yours (Colombijn&Morbidini, 2017). Therefore, the small business owner has the highest opportunities for creative and innovative product services as compare to the employees working in an organisation.

Financial Rewards

The next advantage of being entrepreneur is the financial rewards that gain after the success of the organisation. If an individual work in an organisation as an employee then the profit organisation attain is never received by an employee as it is just gained by the employer. Therefore the biggest advantage for an entrepreneur is that the entire profit or an extra earning is gain by him as there is no intermediate who can take this profit(Jeske& Shultz, 2016). Entrepreneur will benefit from the hard work that he or she has paid in order to accomplish all the define goals of the organisation.

Example

Steve Jobs is one of the biggest inspirations for all the entrepreneurs who started his business from small scale. Steve Job started his business with his friend and now the organisation is an inspiration in all over the world. He attained all the success through his innovation and creativeness in the products(Anyushenkova&Imanshapieva, 2019). Steve Jobs always stands on personal satisfaction and it is the main key of success. He also takes decision as an individual and attain all the success.

Disadvantages of Starting a New Business

The disadvantages to be an entrepreneur are the challenges that come across the path and the capability of an individual to handle those challenges. Some entrepreneur may not stand by the challenges and face a lot of issues in driving a business. Disadvantages of starting a new business are as follows

Undesirable Duties

When an entrepreneur startsa new business then there are more responsibilities that an individual needs to address. All the responsibilities with full ace and responsiveness need to be addressed(Senftleben, 2020). A lot of effort and hard work needs to be put in order to gain success in the business. However one has to push beyond the limits and do all type of work and duties for their own business.

Time Commitment

Running business is a challenging task and is also an extremely time consuming process. No time commitment has seen in a start-up or any small business. If an employee works in organisation then a time boundation is always fixed and in case if he or she is working extra hours then organisation is paying extra incentives for that (Jeske& Shultz, 2016). But in case of business entrepreneur needs to work probably more as compared to an employee.

Financial Risk

For running any business the financial resources are needed to start and grow a business and it can be extensive if the things don’t go well then an individual can face substantial financial loss. However there is no guaranteed income in the initial days. This is one of the biggest challenge for an individual to face financial risk and take effective decision that convert challenges into opportunities(Jeske& Shultz, 2016). However, small start-ups the risk is very high an entrepreneur needs to carry the baggage of financial risk and take effective decisions for the organisation all the defined goals.

Example

One can see the advantages and disadvantages of having a business from Steve Jobs. Advantages is discussed above andin terms of disadvantages Steve jobs face lot of challenges in his career as at one point of time his fired out of his own company. He always focuses on his professional life and in terms of personal life he faces lot of problems. Due to some unsuccessful decisions he is fired from the organisation but after sometime he was again appointed as the CEO of the organisation. Therefore, one can see the advantages and disadvantages of the small start-up from Steve Jobs life.

Legal Structure of Starting a New Business

One of the first decisions that a new business owner takes is a type of legal structure the business will follow. There are different ways to set up a new business and each will have implications as far as success, financial and personal liabilities. The Study will focus on sole proprietorship as this kind of business is owned by a single individual a small group of people

Sole Proprietorship

A sole proprietorship is a kind of business which is owned by a single individual. This kind of business is this easiest type of a structure to setup. However various regulations need to be followed in this structure. The first step in this structure is to choose a business name then register the business name and take licence and permits. After that employer identification number is issued by the internal revenue service to keep the track of the business (Knight, 2019). This type of legal structure is perfectly fit for the individual who are starting their business from small scale.

Conclusion on Starting a New Business

It is concluded from the study that that there are lot of prone as well as cons for starting any business. Starting a new business is one of the most challenging thing but despite of that it is one of the best experience that an individual have in his or her life. Big business owner can be an extremely rewarding. The disadvantages to be an entrepreneur are the challenges that come across the path and the capability of an individual to handle those challenges.Some entrepreneur may not stand by the challenges and face a lot of issues in driving a business. Personal satisfaction is one of those things that each individual should have in order to live his life with full happiness and satisfaction. Being entrepreneur is a different thing and doing job under any other person is it different thing.

References for Starting a New Business

Anyushenkova, O. N., &Imanshapieva, A. G. (2019). FRANCHISING: PROS AND CONS. Наука и образование: новоевремя, (1), 184-187.

Biech, E. (2019). The New Business of Consulting: The Basics and Beyond. John Wiley & Sons New Jersey.

Chowdhury, F. N. (2017). A study of entrepreneurship development in Bangladesh: Pros and cons. Journal of Asian Scientific Research, 7(1), 1.

Colombijn, F., &Morbidini, M. (2017). Pros and cons of the formation of waste-pickers’ cooperatives: A comparison between Brazil and Indonesia. Decision, 44(2), 91-101.

Jeske, D., & Shultz, K. S. (2016).Using social media content for screening in recruitment and selection: pros and cons. Work, employment and society, 30(3), 535-546.

Knight, M. (2019). The Pros and Cons of Outlining Before Writing 48(2), 91-101.

Senftleben, M. (2020).Institutionalized Algorithmic Enforcement–The Pros and Cons of the EU Approach to UGC Platform Liability. Florida International University Law Review, 14.

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Business Management Assignment Help

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