As you work on your business plan, one of the things you’re going to have to figure out is what type of business you really want. The type of business you start will inform many of your choices due to legalities and simply traditional practice. Whether your business is part-time, full time, a sole proprietorship, or you decide to incorporate depends on the rest of your research and your goals.
Determine Your Business Entity Type
The simplest type of business to start is a sole proprietorship, and it is the main type most people start, especially if they start the business part-time as a side hustle or while they are still working at a full-time job.
Before choosing your business type or entity type, you need to know what type of business you’re starting. Then you’ll need to review the legal and financial requirements for your type of business. The entity will help you by informing operations and tax advantages and implications and other legal issues surrounding your business type.
There are many things to think about, such as whether you’ll keep inventory on hand or whether everything is digital or not. You’ll also need to educate yourself about income taxes and sales taxes, not to mention business licenses and so forth.
The best thing to do is to talk to a professional such as a Certified Public Accountant (CPA), Enrolled Agent (EA), or another business professional that understands this topic and knows how to give you good advice. You can get free help from local SCORE.ORG offices and potentially via your local community college or University.
Determine How Many Hours You Can Put In
One of the other things you need to think about, mentioned above, is how much time you want to put into your business. If you want a business that allows you to have time freedom and a more balanced lifestyle, think about this before choosing your business entity or type.
You can still achieve your dreams even if you only have a couple of hours a day, but you have to make sure your dream is possible first. Also, this is an excellent time to discuss being realistic as you make your daily schedule. Think about how much time you have. Don’t overschedule, which can create roadblocks that don’t need to exist.
Know Whether You’ll Hire Employees or Use Contractors
The other important thing to know is whether you’ll do everything yourself or if you’re going to hire employees or contractors. One thing is clear: people who know how to delegate end up with a much better quality of life and a more successful business. The type of business you build will inform whether employees, contractors, or a combination is best. Even if you have to do it all yourself today due to lack of funding, set up your business to know when you reach a certain profit point that is when you’re going to find someone to delegate to. That way, you don’t become reliant on the income you’re producing yourself and trap yourself into a job instead of a life-affirming business.
There are no wrong answers when it comes to choosing the type of business you want to run. It can be part-time, full-time, more than full time – if that’s what you enjoy and what makes you happy – that’s all that counts. But don’t mistake being busy as being productive or happy.
Blog Post Series
Thirty Blog Posts to help you Build a Business you Love!!!
Day 10: Components of a Business Plan
Day 16: Creating Your Executive Summary
Day 17: Can You Describe Your Business?