Entrepreneurship pbl trigger one

Problem: Steps of starting up a business

Learning objectives

How to maintain financing?

-    Keep your personal and company´s accounts separately. It is clearer and separates your own financial situation from your company’s one.

-    Keep youre self updated – invest in yourself. Attend trainings! It shows for your employees that you want to have the recent information on things and for the possible future employees that you are still interested in learning new things.

-      Define your role clearly and set your salary according to that. It gives you a realistic picture of how your businesses finances are doing and gives you an opportunity to live a normal life (at least monetary) while being an entrepreneur.

-       Have goals in your own personal finances as well. These goals set the limit on how much you are ready to put emphasis on your business then and how you want the cash flow work there. If you want to save for pension or a house for example, count if it is possible with your current business and its finances.

-     Talk to professionals. Ask help and guidance. Usually an outsiders opinion and instructions are helpful and set your situation in real perspective.

https://www.inc.com/john-boitnott/5-ways-to-maintain-financial-stability-as-an-entrepreneur.html John Boitnott, read 1.2.2018

Choosing a business format – pros and cons

Sole proprietor

    Simplest form of business association, is one individuals own business and does business only on his/her behalf and is fully     responsible of the assets, debts and obligations. Relative ease with which bookkeeping is carried on, very informal.

    Pros

    - relative ease with which bookkeeping is carried on,

    -allows the business owner to develop business interest.

    -no sharing of profit
   - no partners or shareholders

    Cons

    -full personal liability and responsibility

Partnership

Engaging in business with one or more partners, profits are shared, decision making is shared.

Pros

-           Increased borrowing power

-           Different contributions with business skills

-           Larger assets base

Cons

-           Incometax is determined at the partnership level

-           Liability to third parties and to the other partners

-           Partners are both jointly and severally liable

Incorporation

A separate legal entity, distinct from those who formed it. Company may enter into contracts, own property, sue and be sued in its own right. Has limited liability.

Pros

-   Shareholders are not personally liable for debts, obligations or acts of the corporation except to the extent of any personal guarantees

-       The excistence of a corporate does not end with a death of a shareholder

-       Ownership can be transferred through the sale of shares

Cons

-       The costs ( filing for example)

-      Additional documentation requires( annual returns, advanced accounting, separate tax returns for the corporation.

 https://www.ucalgary.ca/biztechlaw/node/124 read 2.2.2018

Limited liability company (LLC)

It allows to take benefits from both partnership and corporation forms of business.

Pros

- The profits and losses can be passed to owners without taxation of a business itself while owners dont have personal liability

-no limitation on shareholders amount

-any member or owner is allowed to have a full participatory

Cons

-tax treatment varies by state

-relatively new -> might not be that familiar yet with all parties

https://www.entrepreneur.com/article/38822 read 4.2.2018

What makes a good business idea?      

Questions you can ask yourself while coming up with a business idea.

-       Does it solve a problem? For you or your friends and family. If it does then it might solve the problems for a bigger amount of people as well.

-       Will people pay for it? Is it that good that people will put money on it. Paying customer is what a company needs.

-       The price point? Do you offer an existing product for cheaper price. You have to give the value that it delivers to the world, then if people would pay for it you can see if the idea is businessworthy or not.

-       Do you have passion for it? Own business takes a lot of determination and almost all of your time.

-       Test the idea. With your target group with honest opinions, not only with your friends and family.

-       Are you ready to take advices? You should be willing to change and adapt the idea if needed because after all it is what the customer wants.

-       Marketing? Making a marketing plan is important. Find your audience and plan how you want to market your product to them.

-       Are you being realistic with your idea?

-       Can you explain it easily? With no fancy language and nice terms you can make your business plan easily approachable.

https://www.businessnewsdaily.com/3969-finding-great-business-idea.html Britteny Morgan, read 2.2.2018

Why to become an entrepreneur?

-   The admiration of other entrepreneurs, seeing the autonomy, freedom of choice and opportunities in starting up a business.

-       To be ones own boss – for people who are struggling with having authority and someone looking over their shoulder. Some people believe that the best and most efficient way to work for them is to not have any superior.

-       Cant handle 9 to 5 jobs – Finishing unfilling tasks is boring to some. The routine might not suite for everyone and it feels like killing passion and creativity and innovation.

-       Risks – entrepreneurs love risks.

-      No other choice -  some people see it as a mandatory journey to take. They might think that working for others doesn’t work for them anymore for reason or another. Entrepreneurs are driven with the need to control their own destiny.

https://www.purplecowagency.com/5-reasons-why-people-become-entrepreneurs read 2.2.2018

Keywords

                      Business idea

                      Finance

                      SWOT analysis

                      Business plan

                      Start up

                      Motivation

                      Angel investor

                      

Sources:
Boitnott. 29.4.2015.5 ways to maintain financial stability as an entrepreneur

https://www.inc.com/john-boitnott/5-ways-to-maintain-financial-stability-as-an-entrepreneur.html  accessed 1.2.2018

Choosin the right business format

https://www.ucalgary.ca/biztechlaw/node/124  accessed 2.2.2018

Choose your business format
https://www.entrepreneur.com/article/38822  accessed4.2.2018

Morgan. 14.1.2016.10 ways to know if you have a great business idea

https://www.businessnewsdaily.com/3969-finding-great-business-idea.html accesed 2.2.2018

5 reasons why people become entrepreneurs

https://www.purplecowagency.com/5-reasons-why-people-become-entrepreneurs accessed 2.2.2018