One of the biggest decisions you'll make in starting a business is choosing a legal entity. Will your business be a partnership? Sole proprietorship? Limited liability company (LLC)? Limited liability partnership? S-corporation? C-corporation?
When a Georgia entrepreneur considers starting a business, one of the issues requiring careful attention is how to protect the assets of the owner in case a claim is ever filed by an individual, entity or taxing authority against the company. The first decisions that will determine what personal liability an owner will confront occur during business formation. However, it is an ongoing process to maintain a level of personal protection.
Few Georgia businesses can reach their full potential alone. Most businesses have mutually beneficial relationships with other companies. During business formation, cultivating partnerships is one way to help grow a new business.
Georgia business owners may have heard that trendy burger purveyor Shake Shack is planning to open only a modest number of new establishments across the United States. Growth is a central factor in nearly every business plan, and ordinarily, business formation anticipates rapid growth once off the ground. However, Shake Shack is in no hurry to expand and, instead, decided to take its time and build slowly.
Not since 2008 have small business owners been as optimistic about the future. Data from the latest Wells Fargo/Gallup Small Business Index indicates that those who own small companies share the confidence of others that the economy is on the mend. Georgia entrepreneurs interested in business formation may be encouraged by their optimism and confidence.
Recent estimates indicate that only around 19 percent of small businesses across the country -- including here in Georgia -- receive a loan from a big bank. That percentage increases to nearly 50 percent if the bank is small because smaller lenders tend to take advantage of the Small Business Administration's loan guarantee program. According to one source, just a handful of reasons explain why large banks are hesitant to lend when it comes to small business formation.
"I have not failed. I've just found 10,000 ways that won't work." That statement has been attributed to Thomas Edison, the inventor of the incandescent light bulb. The same could be said for business formation here in Georgia or anywhere else. Hopefully, it will not take 10,000 tries, but there is no reason to give up on starting a business just because of a past failure.
It may be no secret to Georgia entrepreneurs that small businesses -- defined as those having no more than 499 employees -- took a substantial hit during the recession. Estimates indicate that, by 2011, the number of small businesses shrunk by more than 337,000 than those that existed prior to the recession. For those contemplating business formation post-recession, there are some lessons to be learned.
Deciding to start a business can be exciting, but it requires several decisions to be made before anything else can be done. One of the essential decisions in Georgia business formation is what type of entity the business will be. The decision will affect how the business is viewed, both legally and by federal and state taxing authorities.
Georgia entrepreneurs may be interested in a new study that examined the trends in small businesses from 1978 to 2011. According to the study, the number of small companies is down across the country. Small business formation is unable to keep pace with the amount of establishments going under.