Types of businesses:
There are many different types of businesses. The business type you choose to may depend on your personal circumstances, interests, finances and business objectives.
- Sole Proprietorship: A sole proprietorship is the most basic type of business to establish. You alone own the company and are responsible for its assets and liabilities.
- Limited Liability Company: An LLC is designed to provide the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership.
- Cooperative: People form cooperatives to meet a collective need or to provide a service that benefits all member-owners.
- Corporation: A corporation is more complex and generally suggested for larger, established companies with multiple employees.
- Partnership: There are several different types of partnerships, which depend on the nature of the arrangement and partner responsibility for the business.
A business plan is a written description of your business’s future, a document that tells what you plan to do and how you plan to do it.
Business plans are inherently strategic. You start here, today, with certain resources and abilities. You want to get to a there, a point in the future (usually three to five years out) at which time your business will have a different set of resources and abilities as well as greater profitability and increased assets. Your plan shows how you will get from here to there.
Lookup: Business Model Canvas
“A startup is a company working to solve a problem where the solution is not obvious and success is not guaranteed,” says Neil Blumenthal, cofounder and co-CEO of Warby Parker.
While both a startup and small business will likely start with funding from the founder’s savings, friends and family, or a bank loan; if a startup is successful, it will receive additional series of funding from angel investors, venture capitalist, and (if it’s lucky) with an initial public offering (IPO). With each series of funding, the startup founder gives up a piece of her company–this is called equity, and everyone who has it becomes a co-owner of the company.
Obtaining financing is one of the biggest hurdles most entrepreneurs will have to overcome. If a bank loan won’t cover what you need and you don’t have any connections to investors, it can be tough to know where to begin. Online crowdfunding — raising smaller amounts of money from multiple backers — has become an increasingly common solution to this dilemma because it allows startups to reach out to a large number of potential investors at once.
Crowdsourcing is the process of getting work or funding, usually online, from a crowd of people. The word is a combination of the words ‘crowd’ and ‘outsourcing’. The idea is to take work and outsource it to a crowd of workers.
Famous Example: Wikipedia. Instead of Wikipedia creating an encyclopedia on their own, hiring writers and editors, they gave a crowd the ability to create the information on their own. The result? The most comprehensive encyclopedia this world has ever seen.
Crowdsourcing & Quality: The principle of crowdsourcing is that more heads are better than one. By canvassing a large crowd of people for ideas, skills, or participation, the quality of content and idea generation will be superior.