If you are starting out in the industry and want to know the best course to to take business wise, here are a few example of business models you may wish to take into consideration.
A sole proprietorship, also known as the sole trader or simply a proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business.
. You can control all aspects of your business
. You retain all the profits
. You can be regarded as a specialist, offering a more personal service with roots to your locality
. You don’t have to confirm with others, you make the decisions which can provide quick service for customers/clients
. You are subject to unlimited liability, if you get into debt, you are liable. YOu may risk any assets you have in savings etc if you get into trouble
. It is hard to raise finance to fund your business
. You may not have funds to purchase things in bulk that could benefit your business, as a result you may have to charge more for your services and risk loosing clients
. You have to make evry decision yourself, anything that happens is down to you.
Self-employment is where an individual will work for themselves, instead of working for an employer that pays a salary or a wage. A self-employed individual earns their income through profitable operations from a trade or business that they operate directly. For example, you will advertise yourself to be employed temporary by a company or a person that needs work doing or you will endeavour in a self-ran project in which you can profit.
. You can set your own schedule
. You can set your own wage
. You can fit it around other commitments
. You can pick the work you want to participate in, instead of having to do something you don’t enjoy or find mundane.
. You may not always find work
. Work could be temporary
. You do not have a regular salary, wage.
. You have to work out your own TAX and NIC rates, which can be time consuming.
Being an employee means you are employed to a job at an agreed wage/salary.
. A secure salary/wage with a chance of promotion
. You may be entitled to employee discounts and bonuses
. Paid holiday and sick leave
. Access to employee benefits for example a pension scheme
. Social interaction with fellow employees
. There could be a daily commute involved
. There is no leeway with when you can and can’t work
. Monotony of a set schedule
. Only having a set amount of holiday you can take
. You may have to sacrifice other commitment
. Little freedom to make your own choices
Private Liability Companies (LTD)
This is a type of company that offers limited liability or legal protection for its shareholders but it places restrictions on its ownership, such as, shareholders cannot sell or transfer their shares without offering it to other shareholders, shareholders cannot sell their shares on the stock exchange to the public and only a fixed number of people can be considered to be shareholders. There are two types of partnership, general partnership which involves two or more partners managing day-to-day operations and share responsibility for its debt and liabilities. Limited partners are usually investors who do not have the same day-to-day responsibilities as the general partners.
. You get a share of the profits and losses without having to participate in the business itself unless you are a general partner.
. A limited partners liability os only down to the amount they invest into the company.
. If you are a limited partner you do not have the same responsibilities or daily stresses as the general partners, you need not be consulted about every decision the company makes for the business.
. A limited partner can leave without affecting the business.
. If you are a general partner you carry all the responsibility surrounding the business’s obligations and debts, if you go into debt, you are liable.
. If you are a general partner you are liable for any decisions made as you have control over what happens.
. If you are a general partner you have to organise general meetings and keep all partners up to date like holding annual meetings and drawing up partnership agreements.
. If the business dissolves you no longer have an income.