Tag: Types

Two Types of Investments in a Small Business #introduction #to #business

#business investment

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The Two Types of Investments You Can Make In a Small Business

Equity and Debt Are The Choices on the Small Business Investment Menu

When you make a small business investment, you have two choices: Do you take equity (an ownership stake) or debt (lend money in exchange for interest income and future repayment)? Both have their own advantages and disadvantages. Betsie Van Der Meer/Taxi/Getty Images

Updated August 22, 2016

Investing in a small business has always been, is currently, and most likely always will be one of the most popular ways individuals and families begin the journey to financial independence ; a way to create, nurture, and grow an asset that, when intelligently run under the right conditions, throws off surplus cash to provide not only a good standard of living, but to fund other investments. Still, it isn t uncommon, at least in nations with an entrepreneurial history such as the United States, for a small business owner to have never owned a publicly traded share of stock or a mutual fund. opting, instead, to put everything into their own restaurant, dry cleaning business, or sporting goods store.

Frequently, this small business grows to represent the most important financial resource the family owns, other than their primary residence.

In today s economic and political climate, these types of small business investments are often structured as either a limited liability company or a limited partnership. with the former being the most popular due to the fact it combines many of the best attributes of corporations and partnerships. In years past, sole proprietorships or general partnerships were more popular, which provide no protection for the owners personal assets outside of the company.

Whether you are considering investing in a small business by founding one from scratch or buying into an existing company, there are typically only two types of positions you can take: 1.) Equity, or 2.) Debt. Though there may be countless variations, all investments come back to those two foundations.

Equity Investments in Small Businesses

When you make an equity investment in a small business. you are buying an ownership stake. Equity investors provide capital, almost always in the form of cash, in exchange for a percentage of the profits and losses. The business can use this cash for a variety of things, including funding capital expenditures to expand, reducing debt, buying out other owners, building liquidity, or hiring new employees.

In some cases, the percentage of the business the investor receives is proportional to the total capital he or she provides. For example, if you kick in $100,000 in cash and other investors kick in $900,000, totaling $1,000,000, you might expect 10% of any profits or losses because you provided 1/10th of the total money. In other cases, especially when dealing with an established business or one put together by a key manager, this would not be the case. Consider the investment partnerships Warren Buffett ran in his 20 s and 30 s. He had limited partners contribute nearly all of the capital, but profits were split 75% to limited partners, in proportion to their overall share of the capital, and 25% to him as the general partner, despite having put up very little of his own money. The limited partners were fine with this arrangement because Buffett was providing expertise.

An equity investment in a small business can result in the biggest gains, as well as the most risk. If expenses run higher than sales, the losses get assigned to you.

A bad quarter, or year, and you might see the company fail or even go bankrupt. However, if things go well, your returns can be enormous. Virtually all of the research on millionaires in the United States shows that the single biggest classification of millionaires are self-made business owners. If you want to rank among the top 1% of wealth. owning a profitable business in a niche market that churns out dividends each year is your best chance, statistically.

Debt Investments in Small Businesses

When you make a debt investment in a small business, you loan it money in exchange for the promise of interest income and eventual repayment of the principal. Debt capital is most often provided either in the form of direct loans with regular amortization or the purchase of bonds issued by the business. which provide semi-annual interest payments mailed to the bondholder.

The biggest advantage of debt is that it has a privileged place in the capitalization structure. That means if the company goes bust, the debt has priority over the stockholders (the equity investors). Generally speaking, the highest level of debt is a first mortgage secured bond that has a lien on a specific piece of valuable property or an asset, such as a brand name. For example, if you loan money to an ice cream shop and are given a lien on the real estate and building, you can foreclose upon it in the event the company implodes. It may take time, effort, and money, but you should be able to recover whatever net proceeds you can get from the sale of the underlying property that you confiscate. The lowest level of debt is known as a debenture, which is a debt not secured by any specific asset but, rather, but the company s good name and credit.

Which Is Better: An Equity Investment or a Debt Investment?

There is no simple answer to this question. If you had been an early investor in McDonald s and bought equity, you d be rich. If you had bought bonds, making a debt investment, you would have earned a decent, but by no means spectacular, return on your money. On the other hand, if you buy into a business that fails, your best chance to escape unscathed is to own the debt, not the equity.

All of this is complicated by an observation that famed value investor Benjamin Graham made in his seminal work, Security Analysis. Namely, that equity in a business that is debt-free cannot pose any greater risk than a debt investment in the same firm because, in both cases, the person would be first in line in the capitalization structure.

The Preferred Equity Debt Hybrid

Sometimes, small business investments straddle the ground between equity investments and debt investments, modeling preferred stock. Far from offering the best of both worlds, preferred stock seems to combine the worst features of both equity and debt; namely, the limited upside potential of debt, with the lower capitalization rank of equity. There are always exceptions to the rule.





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StudyFinance: Types of Business Organization #business #careers

#types of business

#

Types of Business Organization

It is important that the business owner seriously considers the different forms of business organization types such as sole proprietorship, partnership, and corporation. Which organizational form is most appropriate can be influenced by tax issues, legal issues, financial concerns, and personal concerns. For the purpose of this overview, basic information is presented to establish a general impression of business organization.

Sole Proprietorship

A Sole Proprietorship consists of one individual doing business. Sole Proprietorships are the most numerous form of business organization in the United States, however they account for little in the way of aggregate business receipts.

  • Ease of formation and dissolution. Establishing a sole proprietorship can be as simple as printing up business cards or hanging a sign announcing the business. Taking work as a contract carpenter or freelance photographer, for example, can establish a sole proprietorship. Likewise, a sole proprietorship is equally easy to dissolve.
  • Typically, there are low start-up costs and low operational overhead.
  • Ownership of all profits.
  • Sole Proprietorships are typically subject to fewer regulations.
  • No corporate income taxes. Any income realized by a sole proprietorship is declared on the owner s individual income tax return.
  • Unlimited liability. Owners who organize their business as a sole proprietorship are personally responsible for the obligations of the business, including actions of any employee representing the business.
  • Limited life. In most cases, if a business owner dies, the business dies as well.
  • It may be difficult for an individual to raise capital. It s common for funding to be in the form of personal savings or personal loans.

The most daunting disadvantage of organizing as a sole proprietorship is the aspect of unlimited liability. An advantage of a sole proprietorship is filing taxes as an individual rather than paying corporate tax rates. Some hybrid forms of business organization may be employed to take advantage of limited liability and lower tax rates for those businesses that meet the requirements. These include S Corporations, and Limited Liability Companies (LLC s). Where S-Corps are a Federal Entity, LLC s are regulated by the various states. LLC s give the option for profits from the business to pass through to the owner s individual income tax return.

Partnership

A Partnership consists of two or more individuals in business together. Partnerships may be as small as mom and pop type operations, or as large as some of the big legal or accounting firms that may have dozens of partners. There are different types of partnerships general partnership, limited partnership, and limited liability partnership the basic differences stemming around the degree of personal liability and management control.

  • Synergy. There is clear potential for the enhancement of value resulting from two or more individuals combining strengths.
  • Partnerships are relatively easy to form, however, considerable thought should be put into developing a partnership agreement at the point of formation.
  • Partnerships may be subject to fewer regulations than corporations.
  • There is stronger potential of access to greater amounts of capital.
  • No corporate income taxes. Partnerships declare income by filing a partnership income tax return. Yet the partnership pays no taxes when this partnership tax return is filed. Rather, the individual partners declare their pro-rata share of the net income of the partnership on their individual income tax returns and pay taxes at the individual income tax rate.
  • Unlimited liability. General partners are individually responsible for the obligations of the business, creating personal risk.
  • Limited life. A partnership may end upon the withdrawal or death of a partner.
  • There is a real possibility of disputes or conflicts between partners which could lead to dissolving the partnership. This scenario enforces the need of a partnership agreement.

As pointed out, unlimited liability exists for partnerships just as for sole proprietorships. One way to alleviate this risk is through Limited Liability Partnerships (LLP s). As with LLC s, LLP s may offer some tax advantages while providing some risk protection for owners.

Corporation

Corporations are probably the dominant form of business organization in the United States. Although fewer in number, corporations account for the lion s share of aggregate business receipts in the U.S. economy. A corporation is a legal entity doing business, and is distinct from the individuals within the entity. Public corporations are owned by shareholders who elect a board of directors to oversee primary responsibilities. Along with standard, for-profit corporations, there are charitable, not-for-profit corporations.

  • Unlimited commercial life. The corporation is an entity of its own and does not dissolve when ownership changes.
  • Greater flexibility in raising capital through the sale of stock.
  • Ease of transferring ownership by selling stock.
  • Limited liability. This limited liability is probably the biggest advantage to organizing as a corporation. Individual owners in corporations have limits on their personal liability. Even if a corporation is sued for billions of dollars, individual shareholder s liability is generally limited to the value of their own stock in the corporation.
  • Regulatory restrictions. Corporations are typically more closely monitored by governmental agencies, including federal, state, and local. Complying with regulations can be costly.
  • Higher organizational and operational costs. Corporations have to file articles of incorporation with the appropriate state authorities. These legal and clerical expenses, along with other recurring operational expenses, can contribute to budgetary challenges.
  • Double taxation. The possibility of double taxation arises when companies declare and pay taxes on the net income of the corporation, which they pay through their corporate income tax returns. If the corporation also pays out dividends to individual shareholders, those shareholders must declare that dividend income as personal income and pay taxes at the individual income tax rates. Thus, the possibility of double taxation.

This overview was developed by Dr. Sharon Garrison.
No adaptation of its content is permitted without permission.





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Types of Business Degrees – Campus – online business management degrees – Peterson – s #business #plan #templates

#business degrees

#

Types of Business Degrees: From Marketing to Business Administration

As our economy becomes increasingly specialized and reliant on technology, degrees in business are quickly eclipsing liberal arts as the “do anything’” degree. With their focus on building relationships, innovation, and improving the bottom line, employers tend to view business degree holders as individuals who are ready to contribute to their organization and fulfill an array of roles, especially those at the management level. Adding a business degree to your credentials might help you move into higher levels of management or switch your career trajectory altogether. Learn more about the types of business degrees available to find out which direction in your business education is the best course to take.

Business Degree Levels

Business degrees are provided at all levels of post-secondary education, from certificate programs through a Doctorate of Business Administration (DBA). Due to the broad variety, admission requirements can differ greatly. Certificate programs usually last less than two years and are open for individuals at both the undergraduate and graduate level. Two-year associate’s degree and four-year bachelor’s degree programs in business typically ask applicants to have a high school diploma or GED. Some undergraduate programs may also require standardized test scores, such as the SAT or ACT.

Both Master of Business Administration (MBA) and DBA schools require a four-year degree and might ask applicants to submit GRE scores. While most graduate business programs accept applicants from numerous undergraduate majors, students are often expected to have acquired a few years of real-world business experience prior to applying. Depending on the school, some doctoral programs may also require candidates to have first earned a master’s degree. MBA degrees usually take two years to complete, whereas DBA programs can take 3-4 years, but the exact timeline will vary by program.

Business Degree Concentrations

In addition to the traditional business majors of business administration or business management, business degrees are also offered in a variety of specialized disciplines as separate majors within the business college, such as majors in finance, accounting or entrepreneurship. Additionally, many programs include concentrations within business administration programs, such as an MBA with an emphasis in human resources management, where students can take classes that will better help them in the particular field where the student would like to work. These types of programs have the benefit of providing not only a solid business foundation, but also a career-focused curriculum in a specific discipline within business. Among some of the more popular specialized business areas are:

  • Accounting
  • Entrepreneurship
  • Finance
  • Healthcare management
  • Human resources management
  • Information systems management
  • International business
  • Marketing
  • Public administration

Business Degree Course Formats

While traditional programs are still popular, larger numbers of schools are offering degrees in business administration with flexible scheduling. Business schools are reshaping their programs to accommodate working individuals in meeting their education goals. Options include part-time and accelerated programs; online business administration degree programs; hybrid programs, where some courses are online and some are on campus; and weekend and evening programs, which meet at times that are convenient for the busy adult.

Marketing Your New Skills

After completing your degree in business administration, the possible career paths range across multiple industries, including finance, healthcare, marketing, and IT. Salaries generally depend on education level and the demand of the field, with roles at the managerial level typically commanding the highest income. As such, supervisory positions tend to be competitive and usually require extensive work experience in addition to strong academic credentials. In 2011, the median annual salary for the following careers were as follows:

With the many types of business degrees offered by universities today, there are a number of options available to assist you in taking the next step in your career, regardless of your desired industry. Whether you are hoping to enroll in a full-time, on campus program to help kick start your education or are hoping to earn a part-time, online business management degree to move into a supervisory role, there is a business program that will fit into your lifestyle. Open yourself up to an assortment of opportunities by beginning your business education now.

Related Articles:
  1. How to Become a Business Analyst Business analysts, also known as management analysts, analyze an organization and propose ways to improve its.
  2. How Many People Earn College Degrees? Degrees, by Level of Degree and Sex of Recipient The National Center for Education Statistics (NCES).




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The Beginner – s Guide to Different Types of Business Degrees #startup #business #ideas

#business degree

#

The Beginner s Guide to Different Types of Business Degrees

Take a look around your home. Nearly every item you own has an entire industry based around it, and each of those industries has multiple business functions within them. Because of this complexity, there is a huge variety in the different types of business degrees available to you.

With so many specializations within business degree programs, it can be a bit daunting when trying to decide which best fits your interests or career aspirations. To help you decipher the diversity, we broke down a list of some of the most common types of business degrees, the courses to expect and some examples of the jobs you can do with them.

Keep reading to get acclimated with 15 facets of the business field and start to get a feel for which area appeals to you.

15 Types of business degrees to consider

Accounting

Overview. Love numbers? Have an eye for detail? When studying accounting you will develop your understanding of generally accepted accounting principles, tax law, the process of managing financial documents and how it impacts business operations. The accounting field has several potential career paths and this degree will equip you to pursue different types of accounting, audit or tax-related positions within a variety of organizations.

COMMON COURSE SUBJECTS:

Advertising

Overview. Think you have the creativity to develop an ad that cuts through the clutter and sticks in the mind of a potential customer? With an advertising degree you ll learn how to make a message stand out from the crowd by learning about what makes an audience tick and how to best reach them. This is a great choice if you re looking for a way to leverage your creative ability in the world business.

COMMON COURSE SUBJECTS:

POTENTIAL JOB TITLES:

Business management

Overview: There s a lot to learn about managing a business or department. A business management degree will give you a solid comprehensive foundation in important business areas like accounting, sales, operations and organizational leadership. You ll also be better equipped to manage and lead a team of people, which is beneficial if you have hopes of advancing your career into leadership positions.

COMMON COURSE SUBJECTS:

POTENTIAL JOB TITLES:

Economics

Overview. If you choose to study economics, you can expect to learn about economic principles and theory, including the use of math and data analysis. An economics degree can help prepare you for analyzing and forecasting economic trends in order to improve business operations and performance.

COMMON COURSE SUBJECTS:

POTENTIAL JOB TITLES:

Entrepreneurship

Overview. If you want to start, build and manage a business of your own, an entrepreneurship degree can help you to develop the necessary skills to succeed. However, don t be fooled into thinking this degree is only for aspiring business owners. Most of the principles and courses can be applied in any business setting.

COMMON COURSE SUBJECTS:

POTENTIAL JOB TITLES:

Finance

Overview. If you choose to study finance. you ll learn a broad range of concepts and skills including financial analysis, economics, statistics and portfolio management. Majoring in finance will help you pursue opportunities in finance sectors as well as accounting or investment areas.

COMMON COURSE SUBJECTS:

POTENTIAL JOB TITLES:

Healthcare management

Overview. It takes a lot of business acumen to keep a healthcare facility running smoothly and profitably. This major prepares you for providing business management leadership strategies designed to address the unique challenges and intricacies within the growing healthcare industry. You will learn about many of the proven management techniques with a focus on the nuances found within the healthcare industry.

COMMON COURSE SUBJECTS:

POTENTIAL JOB TITLES:

Health services manager

Patient care associate

Hospitality management

Overview. If you have a passion for working with people and a knack for making sure everyone is taken care of, then a hospitality management degree may be right for you. Hotels, event venues and other similar establishments have unique management needs that are different than other businesses. Utilizing a variety of management and communications skills is important for making sure operations run smoothly and guests leave happy.

COMMON COURSE SUBJECTS:

Human resources

Overview. This field is all about people. Whether it s helping employees with navigating benefits enrollment or helping secure the top talent needed for business growth, this field relies on impeccable interpersonal skills. With a human resources (HR) degree. you will learn the skills necessary for managing business and labor practices in addition to learning about organizational development, resources planning and training.

COMMON COURSE SUBJECTS:

POTENTIAL JOB TITLES:

International business

Overview. International business focuses on you guessed it global business organizations. Multinational corporations need employees who are well-suited to deal with the unique challenges presented by doing business across multiple countries.

COMMON COURSE SUBJECTS:

POTENTIAL JOB TITLES:

Supply chain analyst

Business development specialist

Marketing

Overview. Want to help grow and maintain a business by attracting and retaining customers? This is a great option. By majoring in marketing. you ll be focused on learning the fundamentals of areas such as market research, communication and marketing strategies. The marketing department of a business helps accomplish tasks such as product promotion or consumer research in order to achieve business goals like increasing sales, building brand awareness and improving customer retention.

COMMON COURSE SUBJECTS:

Statistics

Overview. We live in an era where more data is being collected by businesses than ever before. But what good is that data if there s no one around to collect, organize and make sense of it all? Statisticians are trained in the collection, organization, analysis and interpretation of numbered data sets. They use these skills to help improve the decision-making ability of businesses by uncovering and planning for trends or patterns on which to act.

COMMON COURSE SUBJECTS:

POTENTIAL JOB TITLES:

Supply chain management

Overview: Ever wonder how the products you order online ends up on your doorstep within days? To steal a line from UPS: That s logistics! A supply chain management degree will prepare you to handle the intricacies of managing a global supply chain (and all of the moving parts that come with it) to ensure a business operations are running efficiently.

COMMON COURSE SUBJECTS:

POTENTIAL JOB TITLES:

Supply chain risk

Choose your business career path

Now that you have a better understanding of the different types of business degrees and the career opportunities associated with each, it s time for you to do some self-evaluation. Do any of the specializations above match your skills and interests? Going forward, your best bet is to find a few areas that appeal to you and dig deeper to learn more about the ins and outs of each focus-area.

For more information about specific business-related career fields, download theBusiness Career Outlook guide.

AUTHOR S NOTE: This article was originally published in October 2013. It has since been updated to include information relevant to 2016.

External links provided on Rasmussen.edu are for reference only. Rasmussen College does not guarantee, approve, control, or specifically endorse the information or products available on websites linked to, and is not endorsed by website owners, authors and/or organizations referenced.

Will is a Content Marketing Specialist at Collegis Education. He researches and writes student-focused articles on a variety of topics for Rasmussen College. He is passionate about learning and enjoys writing engaging content to help current and future students on their path to a rewarding education.

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StudyFinance: Types of Business Organization #government #business #loans

#types of business

#

Types of Business Organization

It is important that the business owner seriously considers the different forms of business organization types such as sole proprietorship, partnership, and corporation. Which organizational form is most appropriate can be influenced by tax issues, legal issues, financial concerns, and personal concerns. For the purpose of this overview, basic information is presented to establish a general impression of business organization.

Sole Proprietorship

A Sole Proprietorship consists of one individual doing business. Sole Proprietorships are the most numerous form of business organization in the United States, however they account for little in the way of aggregate business receipts.

  • Ease of formation and dissolution. Establishing a sole proprietorship can be as simple as printing up business cards or hanging a sign announcing the business. Taking work as a contract carpenter or freelance photographer, for example, can establish a sole proprietorship. Likewise, a sole proprietorship is equally easy to dissolve.
  • Typically, there are low start-up costs and low operational overhead.
  • Ownership of all profits.
  • Sole Proprietorships are typically subject to fewer regulations.
  • No corporate income taxes. Any income realized by a sole proprietorship is declared on the owner s individual income tax return.
  • Unlimited liability. Owners who organize their business as a sole proprietorship are personally responsible for the obligations of the business, including actions of any employee representing the business.
  • Limited life. In most cases, if a business owner dies, the business dies as well.
  • It may be difficult for an individual to raise capital. It s common for funding to be in the form of personal savings or personal loans.

The most daunting disadvantage of organizing as a sole proprietorship is the aspect of unlimited liability. An advantage of a sole proprietorship is filing taxes as an individual rather than paying corporate tax rates. Some hybrid forms of business organization may be employed to take advantage of limited liability and lower tax rates for those businesses that meet the requirements. These include S Corporations, and Limited Liability Companies (LLC s). Where S-Corps are a Federal Entity, LLC s are regulated by the various states. LLC s give the option for profits from the business to pass through to the owner s individual income tax return.

Partnership

A Partnership consists of two or more individuals in business together. Partnerships may be as small as mom and pop type operations, or as large as some of the big legal or accounting firms that may have dozens of partners. There are different types of partnerships general partnership, limited partnership, and limited liability partnership the basic differences stemming around the degree of personal liability and management control.

  • Synergy. There is clear potential for the enhancement of value resulting from two or more individuals combining strengths.
  • Partnerships are relatively easy to form, however, considerable thought should be put into developing a partnership agreement at the point of formation.
  • Partnerships may be subject to fewer regulations than corporations.
  • There is stronger potential of access to greater amounts of capital.
  • No corporate income taxes. Partnerships declare income by filing a partnership income tax return. Yet the partnership pays no taxes when this partnership tax return is filed. Rather, the individual partners declare their pro-rata share of the net income of the partnership on their individual income tax returns and pay taxes at the individual income tax rate.
  • Unlimited liability. General partners are individually responsible for the obligations of the business, creating personal risk.
  • Limited life. A partnership may end upon the withdrawal or death of a partner.
  • There is a real possibility of disputes or conflicts between partners which could lead to dissolving the partnership. This scenario enforces the need of a partnership agreement.

As pointed out, unlimited liability exists for partnerships just as for sole proprietorships. One way to alleviate this risk is through Limited Liability Partnerships (LLP s). As with LLC s, LLP s may offer some tax advantages while providing some risk protection for owners.

Corporation

Corporations are probably the dominant form of business organization in the United States. Although fewer in number, corporations account for the lion s share of aggregate business receipts in the U.S. economy. A corporation is a legal entity doing business, and is distinct from the individuals within the entity. Public corporations are owned by shareholders who elect a board of directors to oversee primary responsibilities. Along with standard, for-profit corporations, there are charitable, not-for-profit corporations.

  • Unlimited commercial life. The corporation is an entity of its own and does not dissolve when ownership changes.
  • Greater flexibility in raising capital through the sale of stock.
  • Ease of transferring ownership by selling stock.
  • Limited liability. This limited liability is probably the biggest advantage to organizing as a corporation. Individual owners in corporations have limits on their personal liability. Even if a corporation is sued for billions of dollars, individual shareholder s liability is generally limited to the value of their own stock in the corporation.
  • Regulatory restrictions. Corporations are typically more closely monitored by governmental agencies, including federal, state, and local. Complying with regulations can be costly.
  • Higher organizational and operational costs. Corporations have to file articles of incorporation with the appropriate state authorities. These legal and clerical expenses, along with other recurring operational expenses, can contribute to budgetary challenges.
  • Double taxation. The possibility of double taxation arises when companies declare and pay taxes on the net income of the corporation, which they pay through their corporate income tax returns. If the corporation also pays out dividends to individual shareholders, those shareholders must declare that dividend income as personal income and pay taxes at the individual income tax rates. Thus, the possibility of double taxation.

This overview was developed by Dr. Sharon Garrison.
No adaptation of its content is permitted without permission.





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Types of Business Insurance #lawn #mowing #business

#small business insurance

#

Insurance coverage is available for every conceivable risk your business might face. Cost and amount of coverage of policies vary among insurers. You should discuss your specific business risks and the types of insurance available with your insurance agent or broker. Your agency can advise you on the exact types of insurance you should consider purchasing.

General Liability Insurance

Business owners purchase general liability insurance to cover legal hassles due to accident, injuries and claims of negligence. These policies protect against payments as the result of bodily injury, property damage, medical expenses, libel, slander, the cost of defending lawsuits, and settlement bonds or judgments required during an appeal procedure.

Product Liability Insurance

Companies that manufacture, wholesale, distribute, and retail a product may be liable for its safety. Product liability insurance protects against financial loss as a result of a defect product that causes injury or bodily harm. The amount of insurance you should purchase depends on the products you sell or manufacture. A clothing store would have far less risk than a small appliance store, for example.

Professional Liability Insurance

Business owners providing services should consider having professional liability insurance (also known as errors and omissions insurance ). This type of liability coverage protects your business against malpractice, errors, and negligence in provision of services to your customers. Depending on your profession, you may be required by your state government to carry such a policy. For example, physicians are required to purchase malpractice insurance as a condition of practicing in certain states.

Commercial Property Insurance

Property insurance covers everything related to the loss and damage of company property due to a wide-variety of events such as fire, smoke, wind and hail storms, civil disobedience and vandalism. The definition of “property” is broad, and includes lost income, business interruption, buildings, computers, company papers and money.

Property insurance policies come in two basic forms: (1) all-risk policies covering a wide-range of incidents and perils except those noted in the policy; (2) peril-specific policies that cover losses from only those perils listed in the policy. Examples of peril-specific policies include fire, flood, crime and business interruption insurance. All-risk policies generally cover risks faced by the average small business, while peril-specific policies are usually purchased when there is high risk of peril in a certain area. Consult your insurance agent or broker about the type of business property insurance best suited for your small business.

Home-Based Business Insurance

Contrary to popular belief, homeowners’ insurance policies do not generally cover home-based business losses. Depending on risks to your business, you may add riders to your homeowners’ policy to cover normal business risks such as property damage. However, homeowners’ policies only go so far in covering home-based businesses and you may need to purchase additional policies to cover other risks, such as general and professional liability.





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Looking for Stable Business Ideas? Here Are 12 Types of Companies With Healthy Cash Flow #loan #for #business

#cash flow business

#

Looking for Stable Business Ideas? Here Are 12 Types of Companies With Healthy Cash Flow.

Data Featured Lists Editor

November 24, 2014

Land subdivision and funeral businesses may not be the sexiest small-business ideas when compared to, let s say, a web startup or a local coffee shop. But private companies in these fields tend to have the healthiest cash flow, according to new data from Sageworks. a Raleigh, N.C.-based financial data company.

For entrepreneurs seeking new ventures. businesses with a track record of stability and solvency may be a good place to start. Sageworks used highest average current ratios to generate a ranking of 12 business types with healthy cash flow for the year ending Aug. 31, 2014. [See list below.]

Cash flow is a leading indicator of financial strength because if a company has sufficient cash on hand, it will likely meet its short-term obligations — like accounts receivables and employee salaries — on time.

Sageworks analyst Jenna Weaver says the businesses listed have the ability to pay their bills and they tend to, on average, have positive cash flow. She adds that while these businesses aren t necessarily fun or flashy, understanding why certain industries or business models are more inclined toward solvency than others is useful for any entrepreneur.

Following land subdivision and death-care services, this year s ranking also includes grocery stores, real-estate businesses, clothing stores, liquor stores, gas stations, dry cleaning and laundry services, specialty-food stores, employment services, health and personal care stores, and investigation and security services.

Land-subdivision companies divide land into plots to make selling the property easier. Weaver explains that its top ranking may reflect the strong real estate/construction market recovery since 2009.

The rest of the results show themes: half of the list represented the retail sector. While giants like Walmart are known to operate with a low current ratio because of their ability to turn inventory quickly into cash, small private retailers may have difficulty predicting consumer behavior and may therefore stockpile inventory to meet any unexpected consumer demand. Weaver explains that the ability for these smaller establishments to then turn these inventory levels into receivables, and receivables into cash plays a big role. Also, she says a third of the industries on the list are service-related businesses, which usually have lower or no inventory needs.

While every industry operates on different business cycles and models, entrepreneurs brainstorming on stable business ideas should always keep solvency in mind.

Often, when businesses fail, they fail because of their inability to manage these ratios and generate positive cash flow, Weaver says.

It s important to note that a current ratio that is too high is not always ideal. A company wants to keep enough cash or liquid assets available to be able to meet its short term debts, but it doesn t want to sit on too much cash or inventory, so that its assets are still being productive for the business.





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The Most Profitable Types of Small Businesses #green #business #ideas

#most successful small businesses

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The Most Profitable Types of Small Businesses

If you re aiming for a lucrative business idea, it may be time to brush up on your number-crunching skills.

Accounting services topped the list of the top 15 small-business sectors by net profit margin over the last 12 months, according to Sageworks. a financial information company. The list was compiled using a database of more than 1,000 financial statements from private companies with less than $10 million in annual revenues.

The Sageworks data found that accounting led the pack in delivering the best profit margins, but service-based businesses in health care and real estate dominated the rest of the list.

Sageworks analyst Jenna Weaver notes that a lot of these service sectors are consistently at the top of the most profitable list. Service-based industries often have very healthy bottom lines, she says. Their overhead and equipment costs are often relatively low, and much of the time, it doesn t take a lot of upfront investment to get started.

Weaver adds: Often times, in cases like consulting, accounting, and legal services, you can get started right inside of your house, without even worrying about renting a space.

Check out the top 15 industries with the best net profit margins during the 12-month period ending July 31, 2014. For aspiring entrepreneurs, this may be the best place to start when considering new business ideas. (Note: Net profit margin has been adjusted to exclude taxes and include owner compensation in excess of their market-rate salaries.)

Credit: Sageworks, a financial information company (www.sageworks.com )

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Types of Businesses and Forms of Business Organizations #stocks #to #watch

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A business is an organization that uses economic resources or inputs to provide goods or services to customers in exchange for money or other goods and services.

Business organizations come in different types and forms.

3 Types of Business

There are three major types of businesses:

1. Service Business

A service type of business provides intangible products (products with no physical form). Service type firms offer professional skills, expertise, advice, and other similar products.

Examples of service businesses are: schools, repair shops, hair salons, banks, accounting firms, and law firms.

2. Merchandising Business

This type of business buys products at wholesale price and sells the same at retail price. They are known as buy and sell businesses. They make profit by selling the products at prices higher than their purchase costs.

A merchandising business sells a product without changing its form. Examples are: grocery stores, convenience stores, distributors, and other resellers.

3. Manufacturing Business

Unlike a merchandising business, a manufacturing business buys products with the intention of using them as materials in making a new product. Thus, there is a transformation of the products purchased.

A manufacturing business combines raw materials, labor, and factory overhead in its production process. The manufactured goods will then be sold to customers.

Hybrid Business

Hybrid businesses are companies that may be classified in more than one type of business. A restaurant, for example, combines ingredients in making a fine meal (manufacturing), sells a cold bottle of wine (merchandising), and fills customer orders (service).

Nonetheless, these companies may be classified according to their major business interest. In that case, restaurants are more of the service type they provide dining services .

Forms of Business Organization

These are the basic forms of business ownership:

1. Sole Proprietorship

A sole proprietorship is a business owned by only one person. It is easy to set-up and is the least costly among all forms of ownership.

The owner faces unlimited liability ; meaning, the creditors of the business may go after the personal assets of the owner if the business cannot pay them.

The sole proprietorship form is usually adopted by small business entities.

2. Partnership

A partnership is a business owned by two or more persons who contribute resources into the entity. The partners divide the profits of the business among themselves.

In general partnerships, all partners have unlimited liability. In limited partnerships, creditors cannot go after the personal assets of the limited partners.

3. Corporation

A corporation is a business organization that has a separate legal personality from its owners. Ownership in a stock corporation is represented by shares of stock .

The owners (stockholders) enjoy limited liability but have limited involvement in the company’s operations. The board of directors. an elected group from the stockholders, controls the activities of the corporation.

In addition to those basic forms of business ownership, these are some other types of organizations that are common today:

Limited Liability Company

Limited liability companies (LLCs) in the USA, are hybrid forms of business that have characteristics of both a corporation and a partnership. An LLC is not incorporated; hence, it is not considered a corporation.

Nonetheless, the owners enjoy limited liability like in a corporation. An LLC may elect to be taxed as a sole proprietorship, a partnership, or a corporation.

Cooperative

A cooperative is a business organization owned by a group of individuals and is operated for their mutual benefit. The persons making up the group are called members. Cooperatives may be incorporated or unincorporated.

Some examples of cooperatives are: water and electricity (utility) cooperatives, cooperative banking, credit unions, and housing cooperatives.





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What Is Common Stock and What Is Preferred Stock? Stock Types and Their Differences Explained #business #advisor

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What Is Common Stock and What Is Preferred Stock? Stock Types and Their Differences Explained

NEW YORK (TheStreet ) — When you step into the investing jungle, what will you find there? Lions (stocks) and tigers (bonds) and bears (cash), for sure. But they’re not as scary as you think.

These three are the main investment classes, but the one we’ll be tracking exclusively in this guide is the king of the jungle: stocks.

You may have heard stocks referred to as equities or securities. The reason they’re called equities is that you purchase an equity, or ownership, share of a company. Stock is also called a security for the same reason, because you’re securing a share of ownership in the company. That’s right; you’ll be a business owner just like you’ve always dreamed!

But, as you know from everyday life, there are terrifically run businesses and there are businesses that make you say, “I’ll never go back there again!” How do you know the difference before you buy the stock? That’s what this guided tour will be teaching you.

So when you buy stock, you become part owner of the company — maybe only a very small part, but still an owner. The size of the part you own, by the way, is irrelevant to your personal objectives.

We won’t cover bonds in this guide, but it’s important for you to know that they’re out there in the investing jungle. When you buy a bond, you don’t become part owner of a company — you’re the bank! You lend the company, or others, money. When companies, counties, municipalities or the U.S. government need to raise money, but not raise taxes or prices, they have bond offerings.

Bonds are loans, with a maturity date, and a percentage rate, promised to you, the Bank of I.O.U. The maturity date and set percentage rates can make bonds an attractive investment as part of a stabilizing influence in your investment portfolio. But you don’t want just bonds in your portfolio — over the long haul, stocks outperform bonds. If you want to purchase and own bonds, it’s very important to have quality bonds in your portfolio. If you want to continue to learn about bonds, see “Why Buy Bonds?”

When financial advisers suggest you diversify, or vary your investments, they’re advising you to spread out any potential risk, or decline, in your investment portfolio. Your investment portfolio is a collection of all of your investments, which could include assets from each of these three classes.

It’s like a nutritionist telling you to eat a little bit of each type of food to maximize your health. A balance of green vegetables, lean meats, dairy products and whole grain breads keep you physically and mentally healthy. Likewise, you want to invest your money in a variety of assets in your portfolio: stocks, bonds and cash products. Cash investments include products such as certificates of deposit (CDs) and money market mutual funds that keep you financially healthy.

Ready then? Get out your compass.





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