How to Organize Business

8/18/2019 How to Organize Business

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Questions:

1. Why we should defne frst our business goals and plans?

2. Why we need to keep ourselves and our employees motivated?

3. How to plan aording to business needs?

!. Why we need to organi"e our business items?

#. What are the benefts when we adhere to our ommitments?

$. How to value our ustomers?

%. How the use o& omputer helps to organi"e our business?

'. Why we should organi"e our business?

(. What are the benefts o& having organi"ed business?

1). When do we need to organi"e our business?

11. Where we should start organi"ing business?

12. How the sole proprietorship help the business to be organi"e?

13. What are the advantages o& having a sole proprietorship?

1!. What are the disadvantages o& having sole proprietorship?

1#. How to separate business and personal fnanes?

1$. How the interation with the employees help to organi"e the business?

1%. What are orporation?

1'. What is the soure and amount o& borrowed money &or the business?

1(. How muh personal ontrol do * want to maintain over business deisions?

2). What &orm o& organi"ation will minimi"e ta+ation o& the business?

21. How muh personal responsibility should * take &or business debts and liabilities?

22. What will happen to the business i& * an no longer manage it?


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23. What organi"ation &orm will best help me to ahieve my short,and long,term business

goals?

2!. What are the importane o& having organi"ed business?

2#. What should have the manager harateristis to organi"e his or her business?

How to -rgani"e usiness: -rgani"ing usiness /ips

Here are some tips to good business organi"ation:

1. Defne your business goals and plans: Write down your business goals and how you

plan to ahieve them in a lear and preise way and stik to it. 0eep this plan visible to

remind yoursel& o& your plan &rom day to day. uy an organi"er or use so&tware to do this.

y studying and stiking to your plan you an evaluate your position as to where you stand

and make any neessary adustments to get bak on trak.

2. Keep yoursel and your employees motivated: When you and your employees are

happy at work it shows , and ustomers notie it immediately. *t also improves eieny

and that shows your ustomers that you and your team are well, organi"ed.

0eep rewarding your employees with any method that you &eel works so as to keep their

morale high.

3. Plan according to business needs: /here are some things that need to be planned

daily weekly monthly and yearly. 4ake a list o& these items and shedule them aordingly.

5aily planning should be done in the early morning or in the late evening the previous day.

Write these things down so that you do not &orget them.

6se day planners available at oe supply stores or use a omputer program to remind

yoursel& o& important events. With the many new inventory and aounting so&tware

programs available you an plan your stok inrease produt rotation and manage your

e+penses , thereby inreasing your ash 7ow and proft margin.

!. Organize your oce items: 0eep your oe or store as neat as possible. 0eep items

that you re8uire everyday in the same plae so that you do not have to hunt &or them every

time you need them.


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9lear out items that you do not need or have not used in a long time. /his will prevent lost

time helping you to onentrate on important issues instead o& trivial things.

#. Adhere to your commitments: 0eep your promises to ustomers6;; and

employees. 4aking payments on time to your suppliers indiates a well,organi"ed business.

4aking deliveries at the agreed upon time to your ustomers will win their trust and will help

you in getting repeat orders as well generate word,o&,mouth advertising.

$. Keep in touch: 0eeping in touh with your ustomers indiates that you are about them

and value their business. end them brohures or e,mail them about new produts and

servies that you oer.

4ail your ustomers birthday ards or greeting ards on speial oasions and holidays. /his

shows a lot about how organi"ed your business is.

%. Use that computer: @ omputer is like having an e+tra brain. 6se it as muh as possible.

5o your aounting inventory delivery sheduling and even your letter writing on it. *t will

save you a lot o& time and eort , muh more than doing these tasks manually.

With newer and &aster appliations it is now possible to have a paperless lutterless oe.

Having aess to data at your fngertips indiates good organi"ation. Aust donBt &orget to

make a regular bakup o& your data.

/he more organi"ed your small business is the easier it will be to operate day,to,day

leaving you more time to onentrate on inreasing your profts.

How to -rgani"e Cour usiness

@dapted &or 4aine &rom *owa by Aim 49onnon =+tension business and eonomis speialist

Dor in&ormation about 64aine =+tension programs and resoures

visit e+tension.umaine.edu.

Dind more o& our publiations and books at e+tensionpubs.ume+t.maine.edu .

-ne o& the frst things to think about i& youEre starting a small business is how you want to

organi"e it. @nswering the &ollowing 8uestions will help you deide.

• What is the soure and amount o& borrowed money &or the business?

http://s.iktmmny.com/click?v=UEg6MTA0MTUwOjgwMDY6c3VwcGxpZXJzOjcyMjViNTgzNWQ0YzNhOTRlOTZlZGMwMDBjYzgyY2QzOnotMjIwMi03NTA5NzkwNzp3d3cubW9yZWJ1c2luZXNzLmNvbToyOTc3MTI6Y2NmNTFlOWQwM2ZhYTM1MzY0MDE2YjllN2MzNWZkMmI6YjA0ZWNmNWRkYmE4NDUwYWE5ZTNlZDI3MTA4NjUyNzU6MTpkYXRhX3NzLDcyOHgxMzY2O2RhdGFfcmMsMjtkYXRhX2ZiLG5vOzo1MTQ2NDIy&subid=g-75097907-06b1a27f496b4449843783ce825b89c9-&data_ss=728x1366&data_rc=2&data_fb=no&data_tagname=A&data_ct=image_only&data_clickel=linkhttp://extension.umaine.edu/http://extension.umaine.edu/http://extensionpubs.umext.maine.edu/http://extension.umaine.edu/http://extensionpubs.umext.maine.edu/http://s.iktmmny.com/click?v=UEg6MTA0MTUwOjgwMDY6c3VwcGxpZXJzOjcyMjViNTgzNWQ0YzNhOTRlOTZlZGMwMDBjYzgyY2QzOnotMjIwMi03NTA5NzkwNzp3d3cubW9yZWJ1c2luZXNzLmNvbToyOTc3MTI6Y2NmNTFlOWQwM2ZhYTM1MzY0MDE2YjllN2MzNWZkMmI6YjA0ZWNmNWRkYmE4NDUwYWE5ZTNlZDI3MTA4NjUyNzU6MTpkYXRhX3NzLDcyOHgxMzY2O2RhdGFfcmMsMjtkYXRhX2ZiLG5vOzo1MTQ2NDIy&subid=g-75097907-06b1a27f496b4449843783ce825b89c9-&data_ss=728x1366&data_rc=2&data_fb=no&data_tagname=A&data_ct=image_only&data_clickel=link


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• What skills will the business need that * annot provide?

• How muh personal ontrol do * want to maintain over business deisions?

• What &orm o& organi"ation will minimi"e ta+ation o& the business?

• How muh personal responsibility should * take &or business debts and liabilities?

• What will happen to the business i& * an no longer manage it?

• What organi"ation &orm will best help me to ahieve my short,and long,term business

goals?

Cour answers will strongly in7uene and be in7uened by the legal business &orm you selet.

However that &orm may hange with growth and needs o& the enterprise. -ne e+ample o& a

&orm hanging would be a sole proprietorship evolving into a partnership Fwhih ould add

shared e+pertise and resouresG and then to a orporate struture whih ould enhane

management ontinuity and fnaning apabilities Fi& shares are soldG.

asially the &orm o& organi"ation depends on the type o& business how many owners or

investors are involved and how ta+ and liability issues will best be handled. ome

businesses espeially &or ta+ and liability reasons will want to inorporate &rom the

beginning. -thers may operate &or their li&etime as sole proprietorships. @ny time two or

more unrelated people are involved in a business they will probably want to reate some

type o& partnership agreement or a orporation. *& youEre onsidering this option get help

&rom a ta+ and legal e+pert.

/he basi &orms o& business organi"ation with some advantages and disadvantages are

disussed in this &at sheet.

ole proprietorship

/he sole proprietorship is a business that is owned and operated by one person. *t is the

simplest and least e+pensive business struture to &orm. 4any start,up ompanies hoose

this &orm until it beomes proftable to enter into a partnership or orporation. /he sole

proprietorship &orm is o&ten use&ul &or a new business beause it has a simple struture and

is easy to set up. *t is the least regulated &orm o& business organi"ation. *ts profts are ta+ed


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as part o& the ownerEs individual inome. /he business owner in a sole proprietorship is

responsible &or all fnaning management deisions and liabilities o& the business.

@dvantages

• Cou are your own boss

• isk losing business with death or disability

• /otal personal liability

• ;rofts ta+ed as personal inome

•


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/he partnership agreement should inlude:

• a list o& the rights and responsibilities o& eah partner and his or her heirs

• the management and ontinuity arrangements &or the business in the event o& death

or disability o& one o& the partners

• the proft distribution plan

• any speial onditions or arrangements that may aet any o& the partners through

operation o& the business

Withdrawal o& one partner or adding another automatially ends a partnership unless the

agreement says otherwise. o you an avoid business li8uidation with a partnership

agreement that overs transition o& ownership and ontinuity o& the business.

;artnership liabilities e+tend to personal assets o& eah o& the general partners. =ah general

partner is held personally liable &or all business obligations o& the partnership. =ah partner

is ta+ed at his or her personal ta+ rate on hisKher share o& the partnership inome.

@dvantages

• imple organi"ation

• hared personal resoures

• hared fnanial resoures

• /he right to selet partners

5isadvantages

• 9ost o& organi"ation

• 6nlimited liability

•


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• haring o& proft


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@ orporation is a separate legal entity &rom its owners the shareholders. *t an make

ontrats it is liable &or any obligations and it pays ta+es on earnings. *t is a legal person.I

@ orporation attrats apital investment &unds by selling shares o& stok in the ompany to

investors or trading stoks &or assets. Jenerally stokholders are not liable &or laims in

e+ess o& the urrent value o& their shares. 9orporate oers may beome personally liable

in some ases but generally reditors an only lay laim on the assets o& a orporation.

/he orporationEs identity makes its ontinued li&e possible. @ death or stok sale has little

eet on orporate managementEs ability to ontinue with business.

9orporate inome is ta+ed at its own rate. 4ore attrative orporate business ta+ rates were

set with the /a+ >e&orm @t o& 1('$. /he portion o& orporate a&ter,ta+ inome given to

shareholders as dividends is ta+ed again as personal inome o& shareholders.

/o inorporate you must apply to the seretary o& state by fling artiles o& inorporation.

/he seretary then grants a ertifate o& inorporation. ale and e+hange o& stok are

governed by state law to protet the publi investor and speial registration is needed to

sell stok to the publi. /he name o& the orporation must be approved by the seretary o&

state to avoid dupliation. /he state harges a one,time &ee &or fling the artiles o&

inorporation with the seretary o& state.

@&ter reeiving and fling the artiles o& inorporation and approving the orporate name the

seretary o& state sends the doument to the ounty reorderEs oe in the ounty where

the oe o& the registered agent &or the orporation is loated. /he ounty reorder fles the

artiles o& inorporation in the ounty. /here is a one,time harge &or this servie.

@&ter the ounty reorder has fled the artiles o& inorporation the orporation reeives a

ertifate o& inorporation &rom the seretary o& state. /he orporation an start doing

business right a&ter the ertifate o& inorporation is issued by the seretary o& state. /he

orporation must also print a notie o& intent to do business in a newspaper with ounty,

wide distribution to establish good standingI in the ounty.

@rtiles o& inorporation an be written by members o& the orporation or a lawyer. However

using a lawyer or aountant an sometimes help you avoid many problems and pit&alls o&

establishing a legal orporation in 4aine.


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5issolving a orporation in 4aine re8uires two flings with the seretary o& state: a statement

o& intent to dissolve and artiles o& dissolution.

9orporations are a more ostly and ompliated &orm o& business organi"ation than

partnerships. @rtiles o& inorporation must also be fled in ounties where oes are

loated or real estate is held. =ah year an annual report must be fled with the state. /here

is a small harge &or fling but the &ee goes up as apital assets o& the orporation inrease.

4any sole proprietors &eel they should inorporate to limit their business liability. /his

ertainly is an advantage but unless the assets o& the business are substantial the oer,

shareholder may still have to sign &or the business.

@dvantages

• hared personal resoures

• hared fnanial resoures

• ;erpetual li&e inreased management apability

• =asy trans&er o& business

•


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=ntrepreneurs who deide on a orporate &orm o& business may want to onsider I

orporate status. esides limiting liability the ta+ advantages are a &ator to onsider &or

this option. /o 8uali&y &or a I 9orporation struture a orporation must meet all o& the fve

&ollowing re8uirements.

1. *t must be a domesti F6nited tatesG orporation.

2. *t must have no more than 3# shareholders.

3. *t must have only one lass o& stok.

!. @ll shareholders must be individuals estates or ertain trusts.

#. Lone o& the shareholders an be non,resident aliens.

/he I struture is a orporate &orm &or smaller businesses that allows a ta+ burden shi&t to

shareholders. /he I orporation is not ta+ed but must fle an in&ormational return. *nome

is given to shareholders and is ta+able to the shareholders whether or not itEs distributed to

them. -rdinary ta+ losses are also personal dedutions.

Cou set up an I orporation the same way you set up a regular orporation. /he I

struture merely allows &or business profts to be ta+ed on personal inome.


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onsidering starting a business onsult lawyers ta+ aountants and other pro&essionals

Fdepending on the nature o& the businessG &or advie.

1 !al" to a #PA

LowEs the per&et time to make an appointment with your ta+ advisor as youEll both have

more time to disuss your fnanials and will be &oused on long,term strategy rather than

getting through this yearEs ta+ season. 4ost importantly youEll still have plenty o& time to

at on his or her suggestions while itEs still 2)12.

$ %e&evaluate 'our (usiness )ntity

4any small businesses start out as sole proprietorships or partnerships but then eventually

transition to another entity as they grow. Dor e+ample i& your business is not inorporated

you may want to onsider inorporating For &orming an


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e+penses when ta+ time rolls around again. -& ourse you should be savingmerhant reeipts as well.

• Open a business chec"ing2savings account *& youEre operating as an

Documents

How to Organize Business