Business Entity Matrix Paper Exploring one’s entrepreneurship and starting a new business can be quite exciting. The idea of being your own boss and making all the management decisions is extremely appealing to many. However, there are many considerations and plans to make before actually starting the business. Aside from the obvious of choosing what it is one wants to do, a person must consider how to acquire the funds to start the business, what liabilities the company and owners may be exposed to and whether additional help will be needed to run the business.
Our current venture is to start a business of selling pet treadmills. One of our initial concerns is the startup capital needed. While we do have a healthy inheritance to utilize for startup capital requirements, we are also contemplating bringing in two friends on the venture. We must also consider the future of our business such as adding employees, franchise opportunities and international market growth. We know our first decision needs to be which type of entity to use to start the business. This decision will have a big impact on all these factors. Many people do not consider the business entity type until the business is already “up and running”. However, the entity type has a direct relation to the ability to raise capital and the amount of taxes paid by both the company and its owners. As such, careful consideration should be given to the potential needs of the business and its owners in making this decision. We must explore the pros and cons as well as the suitability of each type of business entity. To accomplish this we completed the attached matrix of the various business entity types which helped us in compare the characteristics of each type.
After careful consideration, we believe a limited liability corporation (LLC) would be most beneficial for our new business. A major