Creating, Financing, and Marketing a Business

Creating, Financing, and Marketing a Business

Pros and Cons of Partnership

Partnership as a form of ownership associates several advantages as well as disadvantages. Perhaps the most attracting benefit of it is the ease it provides for setting up a business and maintaining it. Owners do not have to get registered with their state or pay fee, like in case of corporation or Limited Liability Company. Further, in this type of ownership it is also easy to fill income tax returns, since there is no requirement of filing separate tax returns for the owners and the corporate entity (Hanson, 1998). Another benefit is the flexibility it offers; in this type of businesses the owners are free to set their advantages and responsibilities as they feel fit or as the requirements of the company dictate. As compared to corporation, the distribution of profit and loss and corporate structure is much more flexible. On the other hand, partnership also involves some cons like all the partners are legally bind with the business associated acts of each other. Another disadvantage here is that the business debts and lawsuits are potentially personal liability of all partners, and at minimum each owner is responsible for his/her share of company's debt. Moreover, this type of ownership is also limited in its capability of raising money such as getting large chunks of cash. Though partnership may raise money by trading equity interests, but it is even hard to do on large scale due to potential personal liability and the limited partnership equity's resale market (Hanson, 1998).

Funding Options for Small Businesses

There are several options for funding a small business, including venture capitalist; debt financing; equity; grants and some others (www.startupnation.com). Mostly the small business starts up by debt financing (loan). Those who have good credit history with banks they can take loan from a bank for small business, however, banks are often unwilling to provide loans for unestablish business. One can get debt financing through the federal SBA which supports entrepreneurs with securing financing. Due to SBS support, banks' risk decreases and they become more willing to provide funds (http://smallbusiness.chron.com). Where, funds can also be raised through equity by selling shares of a business to investors, who can be private or silent partners like family members or local entrepreneurs (http://smallbusiness.chron.com). Venture capital is another significant way of funding a small business. It involves selling ...