Archive | January 6, 2018

Discovering Your Options Regarding Company Formation

When you are developing your business or expanding your existing company there are a number of opportunities out there for you to take benefit of. The main benefit is found with the sort of business you’re attempting to develop and therefore the opportunities that its identification presents for you. The primary example of an organization formation option is found with sole proprietorship and the event of a business that is left entirely under your care.

This company formation provides you with the freedom of running your own business but places great liability on yourself with reference to company success or sudden financial events. The 2nd business formation out there is with a joint venture business where 2 or more individuals run the business. This company formation helps with distributing the liability threats however usually needs people who work well along and are willing to share financial burden and responsibility.

Another business formation that more people are turning to as their business solutions is found with a pty limited company. A pty limited company is unique in nature because it develops a company formation as a different entity outside of the liability of the owners. With this company formation you’ll be able to have a sole proprietorship or a partnership as the company will not depend upon the structure of sole responsibility, rather a prearranged company formation demanding clear positions and responsibility.

Additionally to attaining this new corporation creation structure, you furthermore may benefit from liability safety established with a pty limited company. Usually with a sole proprietorship or partnership, individuals have all their money invested in a company, with no clear line of separation, threatening your personal monetary future if events flip negative. Through a pty limited business formation you separate the business from the personal funds through the protection of the law, serving to to shield yourself in the event of a worst case scenario.

Thus the only question with reference to company formation is that if all of these benefits are found with a pty limited corporation formation, why are there less types of these businesses. The reality is that there are a number of legal demands related to generating this style of company formation and it proves difficult for the average business owner to accomplish. That is why it is necessary to take advantage of a expert to help you in pursuing this business venture. With a expert, they will describe to you how to include your business. In addition, a professional can help you with step by step help in serving to to establish how to incorporate your business.

Own A Franchise Financial Conversations To Have With Your Family Before Choosing A Franchise

Guest Blogger: Ray Moore, CFE, Vice President of Development, BrightStar

The successful franchisee will first and foremost find the right fit. The right fit may be the one that best fits his or her financial resources and goals. The potential franchisee should sit down with their spouse and family and ask some hard questions. Together they will have to decide what outcomes they need to realize to consider this venture a success. They will have to separate out the must have or non-negotiable outcomes before shopping for a franchise opportunity.

The couple/family should agree to the following each family will have to fill in the blanks according to their own circumstances. Its a good idea to consult an accountant:

1.We will not invest more than $_____ of our cash/liquid capital.
2.We will not borrow more than $______ in additional funds to capitalize the business.

With any start up, business owners need to have enough money, either set aside or in other income, to cover household bills and run the business for 12 to 18 months. The following questions will help determine how much is needed:

3.To make sure we can still live comfortably while growing the business, we will cut our household budget to $ ____ per month for at least ____ months and be sure to never exceed that budget.
4.We will only buy a franchise that we have confidence can get big enough to feed itself, i.e., income (cash flow) will cover monthly business expenses (fixed and variable costs), no later than ___ months after signing the agreement.

With many new business start ups, the owner will not be able to take a salary for 1-2 years. The family needs to know that household expenses will be covered during that time.

5.We will only seek a franchise for sale that we have confidence will be able to pay me a discretionary salary (enough to cover some or all of household expenses) without harming the business no later than ___ months after signing the agreement.
6.We will generate other income of $___ (amount needed to make up for loss of other income and savings budget) from ___ (spousal income, other household income or investments) independent of the new franchise business.
7.We will only pursue a franchise business opportunity that will allow us to have our initial investment back, i.e., pay off the start up loan from business income, in ____ months/years.

These are just some of the items that typically come up, or should come up, during the conversations leading up to buying a franchise. Asking the right questions will get you the answers you need. Ask them of yourself, your spouse, your family, the franchisor and other franchisees so you can get the full picture of what your life will be like while building your business, and what it can be like once you have established your new franchise.

Ray Moore, CFE, BrightStar