Deciding on Ownership/Management Structure

Most people want to own their businesses outright. In fact, many will not entertain the idea of any kind of sharing. If you can own your own business outright, then go ahead.

But you might have constraints, making it a good idea to share. Keep in mind that it might be prudent to own 10 percent of something instead of 100 percent of nothing. Also, due to your risk profile, it might be easier to have someone to lean on for support. That said, if you have to share, pay a great deal of attention to the section on business associates later in this book.

Personally, I would avoid business partnering where there is a fifty-fifty split in ownership. I have learned that one can get into a hole of indecision and toeing the line if there is not a clear-cut person who can take the plunge and move on. On the other hand, sometimes when you have a majority owner, you may find the stronger party (in terms of shares) being the weaker decision-maker, and that creates conflict, too. Yet, as it is not a perfect world, I would not avoid taking the plunge into business if I were not the main party or if I could not do it alone. Many times, insisting on particular ownership structures are excuses for fear and uncertainty. In these cases, the person might be afraid to get into business and finds convenient reasons to avoid it.

Try to manage the ego and the urge to make it all about the personalities.

Business structure is also important. You should decide which type of business is most suitable and formalize it through registration. It can be a limited liability company, a partnership, a sole trader, etc.

This decision may seem to be of little importance now but that may not be the case after the start-up. I believe that this is one aspect that requires a sit-down discussion with a good lawyer or accountant. Many times there are benefits to be earned by registering the business one way or the other. Also, there are pitfalls to avoid. One cannot give advice on this without specifics—type of business, location, long-term intentions, and more.

Then there is the structure within which the business operates. Try to curb the urge to have all kinds of fancy offices and titles. I have seen people invest more time and energy on the titles and the design of the business cards than on product knowledge.

Aim at being lean and mean, spending on what is essential to provide good, consistent service to your clients. All the other fluff is becoming less and less meaningful.

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About Alrick Robinson

Alrick Robinson is the Best-Selling Author of The Small Business Survival Guide: Insights into the First Two Years & Business Coach. I invite you to download a FREE Report "7 Signs You Should Explore Running Your Own Business" Plus a Surprise Bonus! at this link - http://eepurl.com/bVHO1. You may also visit my blog at http://smallbusinessmentorja.com/blog where I share small business resources and survival tips weekly.

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