Business organization - Training Transcript

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The idea of owning running a business is exciting and can be very rewarding. However, becoming a successful business owner can also be very challenging. It requires the right mindset, perspective, attitude, traits & know-how.

Our Free Business Training is designed to give you an insight into what it means to own a business and provide you with the basics to get you started off on the path to success.

This compact but complete 10 session program will cover topics from accessing if business ownership is the right path for you, planning, opening your business to growing and expanding.

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Business organization - Training Transcript

  1. 1. 1 Business Organization Training TranscriptNOTICE: You DO NOT Have the Right to Reprint, Re-Distribute or Resell the Information Herein. YouAlso MAY NOT Give Away, Sell, or Share the Content Herein Without WrittenCopyright © Baanabaana Business AgencyALL RIGHTS RESERVED. No part of this material may be reproduced or transmitted in any form whatsoever, electronic,or mechanical, including photocopying, recording, or by any informational storage or retrieval system without expressedwritten, dated and signed permission from the author and/or without proper accreditation.DISCLAIMER AND/OR LEGAL NOTICES: The information presented in this report represents the views of the publisher asof the date of publication. The publisher reserves the rights to alter and update their opinions based on new conditions.This report is for informational purposes only. The author and the publisher do not accept any responsibilities for anyliabilities resulting from the use of this information. While every attempt has been made to verify the informationprovided here, the author and the publisher cannot assume any responsibility for errors, inaccuracies or omissions. Anysimilarities with people or facts are unintentional.AFFILIATE DISCLAIMER: Baanabaana Business Agency may receive compensation from some of the entities listed in thisreport for referrals, as their “thank you” for sending you their way. However, Baanabaana Business Agency neverrecommends any service or product solely for the reason of receiving commissions (and neither should you) –Baanabaana Business knows our reputation is on the line. Free Online Business Training - Week Two - Writing Your Business Plan www.baanabaana.com | Facebook.com/Baanabaana | @Baanabaana | info@baanabaana.com
  2. 2. 2(Slide 1)WelcomeHello, it’s your presenter, Sirra Ndow here with you again today, Week Three of our freebusiness training webinar series.Last week we talked about writing your business plan and what that entails and the weekbefore that, we explored what it means to own a business, how suited and ready we were tobecoming an entrepreneur, what we envisioned when we think of being our own boss, how tofind out what our options were and how to access and evaluate what would work best for us.(Slide 2)Training OverviewToday we will be talking about your business’s organization i.e the legal structure and whetherto start your business alone have a partner or more.(Slide 3)Business OrganizationEstablishing a legal business entity is just as important as acting like a true business owner.This might mean simply applying for an EIN or TIN (employer identification number or TaxIdentification Number) and a trade name DBA (doing business as) as a sole proprietor or itmight involve setting up a corporation with share holders and stock options. The legalstructure itself is just as important as the actual act of creating a business – not only for legalreasons, but to help you create a business mindset as well.The areas we will explore in this section are:  What is Business Organization?  Why your choice of organization matters  Types of Business Structures  Getting Help & Advice  What To Do / What Not To Do Free Online Business Training - Week Two - Writing Your Business Plan www.baanabaana.com | Facebook.com/Baanabaana | @Baanabaana | info@baanabaana.com
  3. 3. 3(Slide 4)What Is Business OrganizationBusiness organization is the legal structure or set up of your business i.e the form of legalentity you choose to hold your ownership interest in your business.Legal business organizations/structures evolved in the 20th century from the common law ofEngland and are applicable today mostly in countries that practice common lawForms of ownership depend on the country of residence/registration or area of jurisdiction.While there are similar forms of business entities addressed in common law countries, uniqueforms of business entities can also be found in many countries although one is likely to find anequivalent in another country.(Slide 5)Why your choice of organization matters?One of the things that attract people to owning a small business, especially and onlinebusiness is how easy it can be to get started but setting up a real business has some legalramifications that really cannot be ignored if you are going into business for yourself.Your choice of business structure could easily be the most important one in your legal businessdecision as it can directly affect your bottom line – your business finances and personalliabilities.Real businesses require a legal business structure for a lot of reasons mainly:  Taxes – income tax, employment/unemployment tax, payroll taxes etc. are just some of the tax liabilities that may affect your business depending on your legal structure. Taxes are inevitable and unavoidable and can have serious implications if obligations are not properly discharged therefore knowing which ones affects you is important. Understanding the tax ramifications of being in business is critical to your financial health. Free Online Business Training - Week Two - Writing Your Business Plan www.baanabaana.com | Facebook.com/Baanabaana | @Baanabaana | info@baanabaana.com
  4. 4. 4  Personal Liabilities – your choice of business legal entity will determine how much of your personal assets are exposed  Getting Financing for your business – your ability to raise funds for your business also depends on your legal business structure. For example, as a sole proprietor, your ability to get funding depends entirely on your individual financial worthiness.  Paperwork requirements – the type of paperwork your required to file for set up and taxes is different for each entity with Sole Proprietorship being the simplest and corporations being one of the most complex  Set up cost – The cost of registering a business at start up is also different with sole proprietorship being the least costly in most cases(Slide 6)Types of Business StructuresMost commonly used forms of business entities are:  Sole Proprietorship  Partnership  Corporations  Limited Companies  Non-Profits(Slide 7)Types of Business Structures – Sole ProprietorshipSole Proprietor - This is where most everyone starts. Operating as a sole proprietor involveslittle more than simply stating “I’m in business.” With this structure, you and your business areone and the same. The owner controls the business, owns all assets and all profits are his/hersalone, even if there are other employees and managers.While this is indeed where most online marketers begin, it may not be a good place to stay.Operating as a sole proprietor offers no protection of your personal assets should you be suedfor an issue related to your business, and it means you are personally responsible for any Free Online Business Training - Week Two - Writing Your Business Plan www.baanabaana.com | Facebook.com/Baanabaana | @Baanabaana | info@baanabaana.com
  5. 5. 5business debt you accumulate. Also, since the business is the same legal entity, it can becomecrippled if the owner becomes ill or incapacitated and will cease to exist if the owner dies.Capital can be difficult to raise when it is time to grow since as well since pretty much all creditdecisions are based on owners individual credit worthiness..(Slide 8)Types of Business Structures – PartnershipsPartnerships are fairly common in small businesses and are fairly easy to set up. It involvesone or more individuals coming together to own and/operate a business. There are two mainforms of partnerships – general and limited. Limited partners do not get involves in runningthe business and have liabilities equal to their investment.Partnerships provide access to a bigger pool of resources, skills and talent and can have taxbenefits but it also means that general partners can legally act on each other’s behalf includingsecuring a loan(Slide 9)Types of Business Structures – PartnershipsComplementary partnerships – partnering with a competitor, investor colleague withcomplementary skills, talent or resourcesStrategic alliances – partner with another consultant or client to expand your expertise insteadof turning customers awayFounder – employee – Hire a business or operations manager to handle day to day affairs soyou can focus on strategic growthFriends as partners – long term friends starting a business together. They know each otherstrengths/weaknesses. A problem with the business can cause a rift in the friendship howeverFamily as partners – husband and wife, Father and Son, Siblings etc can start a businesstogether. Offers great support but like above, a problem with the business can cause familyproblems Free Online Business Training - Week Two - Writing Your Business Plan www.baanabaana.com | Facebook.com/Baanabaana | @Baanabaana | info@baanabaana.com
  6. 6. 6(Slide 10)Types of Business Structures – CorporationsA corporation or incorporated entity that is a legally separate entity with legal rights andliabilities. In the eyes of the law a corporate have many of the same rights and responsibilitiesas humans do although they are not considered as living entities. They are also completelydistinct from the shareholders that invest in it. A corporation is can operate either for profit ornot-for profits. It can be dissolved by court order or voluntary action on the part of theshareholders. Corporations do not however die when the shareholders dies.Starting (and running) a corporation is a bit more complicated and expensive than most of theother structures, but it does have some additional benefits, like the ability to sell shares in thecompany to raise funds and the liability protection. A corporation can also be unlimited. Thistype is usually used where limited liability companies option are not allowed or available,when a secrecy in financial dealings is needed for example.Most countries have more than one type of corporations - German has the A.G corporation(public limited corporation) and the GmbH (private limited corporations); Spain had the S.A(public) and S.L (private); UK has the PLC (public) and LTD (private), USA has the S Corp, C Corpand most recent B Corp. The B or Benefits Corporations are required by law to create a benefitfor the betterment of society.(Slide 11)Types of Business Structures – Limited CompaniesLimited Companies (LTD) or Limited Liability Company, or LLC are almost as easy to set up as asole proprietorship, but affords a degree of protection for your personal assets, similar to acorporation but are usually taxed differently. You do, however, have to be careful to clearlyseparate your business from your personal finances. Failing to do so can leave your family’smoney vulnerable should your company be sued. Free Online Business Training - Week Two - Writing Your Business Plan www.baanabaana.com | Facebook.com/Baanabaana | @Baanabaana | info@baanabaana.com
  7. 7. 7(Slide 12)Types of Business Structures – Non-ProfitsNon-profits uses revenue left over after operational costs to achieve its objectives. They donot distribute them as profits or dividends. Non-profits can also be charitable or serviceorganizations and in many countries, they can apply for tax exemption. Tax exemptions statusis not automatics(Slide 13)Getting Help & AdviceBusiness laws vary from country to country and even state to state, so before deciding whichbusiness structure is right for you, it pays to do some research. Talk to other small businessowners, read through your own country or state’s online documentation as well.It is almost always advisable to seek professional help.Accountant – Your accountant can you advice on ownership options, help file taxes, preparingfinancial statements, audits, forecasting, profitability etc.Attorney – Advice on forms of ownership, draw legal agreements, help in negotiations, reviewdocuments, leases, negotiations, specialized legal advice etc.Payroll Service Providers - Payroll Tax Calculation, Deposit and Filing, Business Tax Protection& Payment, pension withholdings, health insurance etcLocal Chamber of Commerce, trade o professional association – Give you access to a pool ofexperience and expertise in various fieldsOutsource – pay another business owner or independent contractor to take care of some ofthe nitty-gritty while you focus on building your business Free Online Business Training - Week Two - Writing Your Business Plan www.baanabaana.com | Facebook.com/Baanabaana | @Baanabaana | info@baanabaana.com
  8. 8. 8(Slide 14)What To Do / What Not To DoDo Don’t  take your business structure seriously  partner with someone you don’t trust  conduct thorough research  neglect your taxes  Draw legal agreements  mix personal and business assets  seek professional help  Select a structure you don’t understand  Outsource so you can focus on growing  treat your business as a hobby(Slide 15)This completes our session today. Many thanks to you all for being here. I sincerely hope youfound this session useful enough to join us again next week to talk about registration, licenses,permits and insurance. Please help us improve this training by giving your feedback on thesurvey we will be sending along.Have a great weekend! Free Online Business Training - Week Two - Writing Your Business Plan www.baanabaana.com | Facebook.com/Baanabaana | @Baanabaana | info@baanabaana.com

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