How to start a business with only $500 - Part 1 - Choosing a Business Type
It has been well established that all my posts will be about entrepreneurship and everything that has to do with it, from travelling to China to meeting new people and even accounting work.
Today I will be going over something great and it will give many people hope, and that is how to start a business all by your self with a budget of $500.
To start a business all you need to know is there are 5 steps to it. A quick run down of those five steps is:
1. Incorporating
2. Branding
3. Choosing Manufacturer
4. Creating a Product
5. Selling it on a platform
Firstly before you even start a business you need to make an intention of why you are going to start a business, the stronger the desire the better. You must have a burning desire because that is what will drive you and your business to hit millions. While you competitor is sleeping you need to be awake ready to out work them and beat them!
Now that you got a burning desire you need to decide what type of business you are going to have. There are 3 different business types. 1. Sole Proprietorship 2. Partnership 3. Corporation
Each one is more difficult and more expensive than the other.
Sole Proprietorship:
A sole proprietorship is a business you start and you have full ownership over and take all full liability over, so if you get sued then everything is on your shoulders.
Pro's:
- Quickest method to begin.
- Most cost effective.
- You take all profits.
- You own 100% of the business.
Con's:
- You take full liability.
- Difficult to gather fund's to start since you are alone.
- No one to share success with.
Partnership:
The second type of business is a partnership and this is when you and a partner split the cost's and start the business together each owner owns 50% of the business.
Pro's:
- The liability of the business is split between the two partners.
- Easier to gather fund for start up.
- Shared success.
- Tasks are splits among two people or more.
Con's:
- Both partners are still liable.
- Your profits are split amongst all partners.
- Disagreements can happen.
- Most costly to start.
- Need a lawyer to make a partnership agreement.
This method is great although the lawyer fees may be pricey in the beginning to make the partnership agreement. Since you are both splitting the costs it is easier to start the business rather than on your own and paying for everything.
Corporation:
A corporation is the safest business method in regards to liability, you are not liable if the business gets sued. When you are not liable then the only person who gets sued is actually the business.
You may wonder how that's possible, well it's because a corporation is actually registered as a legal entity. This entails a deep dark hole of being taxes twice here in Canada, corporations pay tax twice on their earnings.
Pro's:
- No liability on the owners.
- Able to raise mass amounts of money through public investment.
- Much easier to scale and grow large.
Con's:
- Very expensive to start up.
- Lots of paperwork to register.
- Get taxed twice.
- Shareholders generally make the rules.
Now you have seen the 3 different types of businesses, you can now weigh out the pro's and con's and make a decision on which one suits you the best.
My recommendation for the sake of this course is for you to do a partnership or do it alone, this saves time and A LOT of money.
Hi, thanks for a good read.. My Hubby and I in the past for our small businesses were either Partnership or Sole Trader.. We are about to set up another small Bush Camping Tour Business and are undecided which way we will go at this stage :)
Amazing to hear! I hope for the best of luck on the bush camping tour business, a partnership together would work out well or even one of you can partner with someone who has the strengths in skills that are your weaknesses. Stay tuned for my next post tomorrow on how to choose a business partner. :D
If you invested that same $500 into one of the Investment programs I use, compounding the interest over 2 years you would end up with a principal amount of $339K making you on average 1% interest a day for $3300 a day or $1.2 Million a year. That's with only using one program. Can your businesses achieve those types of numbers in 2 years?
If you want to find out more check out my YouTube channel. Watch my latest video I posted and my quick 3 min intro video. https://www.youtube.com/channel/UCkDzqga4zH_CcPhFQxqONNg
Keep Steemingit!
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The best in my opinion is an LLC (limited liability company)
LLC is AMAZING, sadly we don't have Limited Liability Company in Canada :( . Stuck being liable for everything ahaha.
@distress2success Hello and thanks for the post. I think it's good to start a corporation to gain business credit because it supposed to be separate from your personal credit.
Love entrepreneurship posts. I just need an idea. I'll try to keep learning for when that time comes.
I will make my next post on different businesses you can start and hopefully, you might get some inspiration from an idea!
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you can start with just 90$
and
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