BUSINESS BUYER TIP
One of the first decisions that you will have to make as a business owner is how the company should be structured. This decision will have long-term implications, so consult with an accountant and attorney to help you select the form of ownership that is right for you. In making a choice, you will want to take into account the following:
Forms of Ownership
Article courtesy of the U.S. Small Business Administration (SBA)
- Your vision regarding the size and nature of your business.
- The level of control you wish to have.
- The level of structure you are willing to deal with.
- The business' vulnerability to lawsuits.
- Tax implications of the different ownership structures.
- Expected profit (or loss) of the business.
- Whether or not you need to reinvest earnings into the business.
- Your need for access to cash out of the business for yourself.
The vast majority of small businesses start out as sole proprietorships. These firms are owned by one person, usually the individual who has day-to-day responsibilities for running the business. Sole proprietors own all the assets of the business and the profits generated by it. They also assume complete responsibility for any of its liabilities or debts. In the eyes of the law and the public, you are one in the same with the business.
Advantages of a Sole Proprietorship
Disadvantages of a Sole Proprietorship
- Easiest and least expensive form of ownership to organize.
- Sole proprietors are in complete control, and within the parameters of the law, may make decisions as they see fit.
- Sole proprietors receive all income generated by the business to keep or reinvest.
- Profits from the business flow directly to the owner's personal tax return.
- The business is easy to dissolve, if desired.
- Sole proprietors have unlimited liability and are legally responsible for all debts against the business. Their business and personal assets are at risk.
- May be at a disadvantage in raising funds and are often limited to using funds from personal savings or consumer loans.
- May have a hard time attracting high-caliber employees or those that are motivated by the opportunity to own a part of the business.
- Some employee benefits such as owner's medical insurance premiums are not directly deductible from business income (only partially deductible.... <more>
NEW FRANCHISE OPPORTUNITIES
BizBuySell offers one of the world's largest franchise directories. If you're considering buying a business, you owe it to yourself to explore these new franchise opportunities or visit the BizBuySell Franchise Directory
FRANCHISE OF THE MONTH
Aqua Chill Drinking Water Systems
Capital Required: $100,000-$200,000
A leader in water purification for over 25 years, Aqua Chill has an unprecendented opportunity for a few qualified individuals to own their own Aqua Chill franchise. Franchise owners offer reverse osmosis drinking water systems to businesses currently using bottled water. Place your accounts with the help of the Aqua Chill Call Center, and then enjoy the benefits of owning a recurring income with a part time effort, once your accounts are placed. Click here to learn more about Aqua Chill Drinking Water Systems
BUSINESS OF THE MONTH
M.e.n.a.s Day Spa
Location: Aruba, Caribbean Islands
Asking Price: $900,000
Year Established: 1989
M.e.n.a.s Day Spa has been in business since 1989 and is now the biggest Day Spa on the island with 6 treatment rooms. It will be sold together with the house and land (all of the real estate) for $900K. It is a big residential house with land and the business is attached. The business has been valued by C-A-T-C (an accounting company in aruba) at 1.2m awg. The real estate is valued at 800k awg. That puts the total value at $1,142,000. However, since the owners are motivated to sell, they listed the business/house at below the market value! Click here to learn more about M.e.n.a.s Day Spa