One can say that business is the driving force behind the economy, and that it remains a very important part of society. Your favourite restaurant, the clothing shop that you love, or even the NHL, are all businesses. With young entrepreneurs constantly joining the scene, there are endless possibilities and opportunities. Business are founded based on new ideas to meet the needs and demands of the market and community. The first step in the creation of a business is an idea. Do you have one?
It could start with a passion, or a hobby. For example, do you love to ski and snowboard? You can create a ski resort where people can race down snowy mountains and warm up in nearby chalets. This would be considered a service business, since you would be selling non-tangible activities, people use their knowledge and expertise to offer services to their clients. Other possible services include tourism, entertainment and health care.
Another idea is to improve an existing product. For example, businesses such as Apple and Samsung are constantly competing to see which company can make the best cell phone. How light can a phone become? A business would have to show how its product is unique, and how it is better than all the other options in the market. Or you can simply invent a new product! If you’re interested in buying and reselling finished products, then consider a merchandising business. You would need to pay close attention to current trends in order to appeal to your target audience. However, they do not make the products themselves, as that is the job of manufacturing businesses, who convert raw materials into finished goods. There is a close relationship between the two, as merchandising businesses are dependent on their manufacturers to meet their product demand.
Finally there are not-for-profit organization, which creates activities to meet social needs without earning profit, usually in a form of charity. Do you have an issue that you are passionate about? Ever thought about raising awareness about animal rights or protecting the environment? Not-for-profit organizations are a great way to let your voice be heard and to encourage your community to get involved. You may not earn money for your personal use, but the money raised will be used to support something that you care about.
What type of business suits you?
In order to understand all the mechanisms of the business world, we need to know the basics first. When forming a business, there are three main types of business ownership to consider. While each one has its advantages and disadvantages, it is important to find the structure that suits your needs.
1. Sole proprietorship
This type of business structure constitutes of one owner that is responsible for all the decision making. You would have absolute control over the entire business, but that also means careful decision making and more responsibilities. Easy and inexpensive to create, a sole proprietorship allows all the profit to go directly to the owner and allows greater flexibility. However, this form of business structure is also risky because the owner has unlimited liability. This means that the owner is personally responsible for business debts, as those payments will come directly from their individual bank account.
2. Partnership
For those who feel like running an entire business on your own might seem a bit daunting, you don’t have to be alone! A partnership business is operated by two or more owners who have consented to mutual terms of agreement. Its advantages are similar to those of a sole proprietorship but profits and management would be shared equally between all partners. However, finding a suitable partner is a challenge as you are held responsible for any decisions your partners make. For example, if your partner breaches a contract, then you will also have to deal with the consequences. It’s important to choose a trustworthy business partner.
3. Corporation
Otherwise known as a limited company, a corporation is a type of ownership which states that the business is a separate legal entity from the shareholders. Most large businesses are corporations because it is run by a group of people, making it easier to develop the business, earn profit and expand. For examples: Google, Wal-Mart and Starbucks are all corporations. A major advantage is that this type of ownership has limited liability, meaning that all your personal assets won’t be affected by business debts. Nevertheless, a corporation requires a more complex regulation system and bigger census in order to pass decisions.
The world of business has many opportunities, risks and challenges. When starting a business, remember to keep an open mind and consider all options. Who knows, maybe you will become the owner of an international business one day. Good luck and have fun!
