Types of Profitable Businesses that Any Entrepreneur Should Start
Any prospective entrepreneur must decide the sort of business they would like to operate since different businesses need to have varying regulations on the taxes chargeable as well as personal liability. Various businesses are grouped by the internal Service Revenue depending on the number of the employees and the gross income. As such, entrepreneurs or business proprietor must choose a structure that suits their current and future requirements.
For starters, sole proprietorship business has one owner and requires a small amount of capital to start. Additionally, it is not incorporated. During formation of this business, the owner does not put into consideration future possibilities of having other additional employees apart from him/herself. As such, the owner performs all the roles required for the business to operate such as filing of taxes and returns, compensate for social security purposes and prepare profit and loss statements.
The other type of business structure is the partnership in which 2 or more than 2 people may come together and form a business with common interest. As such, they make equal contributions in capital, decision making and profit/loss sharing. The benefits of such a business setting are that the members can raise higher capital than sole proprietorship, which results to high revenues. The members also contribute with ideas which enhance the performance of the business. However, some members of the partnership may take advantage of others by failing to contribute equally which may result to bankruptcy of the business or unequal sharing of the profits.
Another form of business structure is the C Corporation which is those businesses that have separate entities then an individual ownership. Additionally, unlike partnership and sole proprietorship, C Corporation must list the net income as well as losses. There are none such restrictions on how many number of proprietors/ owners that a c corporation can have. Finally, there is an S corporation which unlike the C Corporation, the business owners don’t pay taxes on corporate level.