Exploring Business Ownership – Maybe You’re a High Rolling Entrepreneur – Part 6 of 7

We’re wrapping up a series on evaluating whether the concept of business ownership is right for you. Most recently we’ve discussed how to assess your risk tolerance by analyzing the way you think. We’ve covered the 3 main ways to earn income, outlined the risks associated with employment and franchise ownership, and how each personality type typically thinks. If you didn’t identify with either of those, then maybe you’re an entrepreneur at heart.

Entrepreneurial Business Ownership

Entrepreneur think is:

How can I meet the needs of my customers by profitably solving the problems they have?

If you want to chart your own course, solve all your own problems, be captain of your own ship, be totally responsible for whatever success or failure comes, and chafe at the thought of working for someone else in return for less risk, then you probably have the entrepreneurial bug.

Risk Assessment

Being an independent business owner is a high risk proposition with a high probability of first time failure.

Why high risk? Because you will most likely pledge every asset, such as home equity, savings, 401(k), etc., that you have to finance startup or purchase of the business. If your venture fails, you may very well lose everything you’ve spent or offered as collateral. (This is also true for franchise owners.)

Why a high probability for failure? Because first time entrepreneurs have such a clear vision of what they want to do and how to do it; they think they know everything! I have several colleagues who generally refuse to work with first time entrepreneurs because (in their words) “they think they know more than I do and helpful suggestions that I make are either ignored or become implementation battles.” Truer words were never spoken.

If your risk temperament is right in line with the type of person I’m describing and you want to go forward, then how can you improve your chances of success? Buck the trend by getting lots of experienced advice and counsel from those who have gone before! Be willing to listen to those who have graduated from the school of hard knocks and learn from their mistakes to avoid making them all again yourself, because you simply don’t have either the time or the money to survive the experience of learning it all firsthand.

We’ll wrap up this series in part 7 by outlining why businesses generally succeed or fail, and I’ll suggest some more reading resources and offer some advice on how to navigate a path to success.

What Type Of Business Ownership Works Best For You?

Business Ownership being presented as an enterprise that involves itself in goods and or services to the end consumer can be created from many different industries to include consumable and non-consumable products, textiles, auto, technology, energy, farming, transportation, financial, real estate and many more. Before you move ahead in business ownership, there are many key factors to take into consideration.

First of all, you will need to decide if you are going to be a sole owner, a partnership or a corporation and if you will have shareholders. As the business owner, the basis of the business will include having a clear business plan created to include the flow of the entire organization.

Depending on the size and structure of your business, you will need to decide what departments you need for your type of business. For example, let’s consider some very important departments that may be key to the success of your business.

First of all, the Administration Department could consist of the business owner if he or she is running the business, the board of directors, and possibly a Managing Director shares the vision of the business and is key in guiding the employees to maintain the flow of the business plan in place.

The Finance Department heads the Financial Manager of the business and this employee should be able to predict and adjust for profits and losses on a daily basis as well as understand how to balance and maintain the financial stability of the company by working with the capital provided all while working toward positive financial growth.

The Production, Service and Distribution departments contribute to the growth of the business substantially when proper employees are in place with sufficient and specialized skills, experience and knowledge depending of what the type of business demands. The latest technology and advanced methods should always be used to ensure the most development and growth for the company.

The Human Resource Department Manager is key to the success of the business in regards to the quality of employees that are hired and needs to be able to effectively communicate with the owner and other managers of the business as well as the employees. The HR Manager will be dealing with employee issues and needs to be able to communicate effectively with all parties involved all while maintaining company and legal policies and working with all parties involved to resolve any issues that arise in a professional manner.

These four Departments need to be considered when taking on the exciting venture of Business Ownership and you as the owner, will need to understand and be capable of deciding the functions of each department and always be aware of what is happening in the workplace and have control of your business in every aspect.

This is What Transfer of Business Ownership Entails

There are many reasons that may lead one to transfer his business ownership to another party. One reason is that, the owner may wish to move on to a different locality, and since he may not be able to oversee its operations from far, he may be forced to just give up his ownership rights to someone else. The steps are easy, but should follow a legal process, in case of misunderstanding issues that may arise later on.

Since there are many methods through which someone can carry out the transfer of a business ownership, it is good to first understand the implications of each method and settle for the one that suits your personal situation. The most suitable is the one that fits your psychological satisfaction as well as financial state. Methods of transfer, like sale of the business will mean that you will be able to receive some financial gains from what you have invested in over years.

If on the other hand you choose to pass on the ownership to a son or daughter, you may not have the full confidence that the venture will run the way you will want it to. All the same, there is a price to be paid for all the choices we make. If you decide to lease out your business, be sure to follow all the legal requirements that will protect both you and the lessee from future misunderstandings.

Leasing allows you the opportunity to continue earning from the business as you will be entitled to monthly payments or periodic payments according to what both parties will agree and sign to in the contract. In the lease, you could also agree with the lessee that they will buy the entire business after some period of time.