How to Avoid Failure and Succeed In Business

By: Manuel Salvacion

Many people dream of putting up their businesses and managing it by themselves. The idea of being your own boss and managing your own time lure many to engage in any business enterprise. But entering into business without the acquired knowledge and skills to run it may lead to failure and disappointment.

To avoid failure in business, you should remember the following fatal errors:

• Overexpansion
• Poor capital structure
• Overspending
• Lack of reserve funds
• Bad business location
• Poor execution and internal controls
• Inadequate business plan
• Unable to adapt to the times
• Ineffective marketing and self-promotion
• Underestimating the competition

One way of securing success in running your business is come up with a good structure. To determine the structure that suits your business, you need to consult a corporate lawyer who has knowledge of the current issues involving the legalities in doing business in Los Angeles.

Here are some types of business structures that you may consider in establishing a business:

1. Sole Proprietorship – This is the simplest, most basic business structure. The owner bears the entire responsibility for the business and reaps its rewards. You are your business. In many places, if you are offering a service like gardening, you don’t need to do anything more than name your business after yourself and it’s considered established.

2. General Partnership - If you take on a partner or two you share your rights and duties. General Partners are personally liable for the debts and obligations of the business. General partners are considered co-owners of a going for profit business.

The most important factor in determining whether a business is a partnership is determining whether the partners share profits and management decisions or not. The agreement to form this could be in writing or oral. A corporate lawyer is needed to draft the necessary documents of partnership agreement,

3. Limited Partnership - As your company grows, you’re next step could be a Limited Partnership, which has two types of partners, general as outlined above and limited who do not participate in management decisions and aren’t liable for partnership debts past their contribution of capital. This agreement must be in writing.

4. Limited Liability Company - An LLC is separate legal entities distinct from its members which can sue or be sued enter into contracts or hold property. The owners of an LLC are usually called members and are not personally liable for the debts of the LLC past their contribution, yet they can take a hand in management. It is governed by the laws of the state in which it is established.

5. Corporation – this is effectively an artificial person and is responsible for its own debts and contracts. Shareholders are only liable to the extent of their own investments. Shares can be freely transferred. Corporations are considered immortal. They are run by a board of directors that appoints formal managers. They come in many flavors including non-profit and for profit; public and private; publicly closely held and professional corporations. These are governed by state laws.

Unless you have decided on starting simply and establishing yourself as a sole owner or proprietor, it is time to confer with a corporate lawyers in Los Angeles to see which business structure is best for you.


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