How to Open a Business

So you've taken the big leap and decided you want to go in business for yourself. Great! Find out what you need to know before you do anything else.

Instructions

Difficulty: Moderately Challenging

1. Congratulations on taking the big risk of opening your own business. I think it's great that more and more people are venturing into being their own boss.
2. First thing you need to decide is if you are going to be a sole proprietorship, a partnership or a corporation.
3. A sole proprietorship means it's you against the world. Taxwise, you would be taxed as an individual. But this is the cheapest and easiest way to form a company. It also means you hold all the liability and can get sued.
4. A partnership is, you guessed it, with two people. That means now you hold the responsibility between two people. Depending on whether it's limited or not, it might mean one person has the responsibility and the other has limited liability. You often see this with doctors and lawyers. Again, the tax implications are the same as with a proprietorship.
5. A corporation is the best way to go if you can afford it. Usually people hire lawyers to help them incorporate. It's a complicated process. A corporation is great because it's its own person in the eyes of the law. That means it makes its own income, and it protects you if you are ever sued. You can never lose anything but your initial investment.
6. Whatever way you do decide to go, the fact that you are opening your own business is great, and you should be congratulated. You can do anything that you work at and believe in.