So you’ve decided you want to start your own business. That’s great. But you have limited knowledge of business ventures and therefore have also decided to wait until you get some. Rather than let you scour the internet looking for advice, we’ve created this guide to help you get familiar with different ventures. Read on to learn what a business venture is, the types of ventures you can pursue, and some ideas that – with consistency and hard work – can be transformed into a profitable business.
What Is a Business Venture?
A business venture is an entity that you form with the expectation of financial gain. The risk of failure or loss accompanies this expectation. Often, the entity is referred to as a small business as it usually begins with a low investment. An entrepreneur identifies a gap in the market and launches a company that aims to fulfill that gap. That’s how a business venture starts. In many cases, the business owner himself funds the venture, but it’s not uncommon to have more than one investor based on how you set up the entity.
A business venture is different from a startup in the way it experiences growth. Startups are designed to grow fast, with some companies achieving as much as 200%-300% growth in a single year. A business venture, in contrast, sees gradual growth while providing a steady income to the investors. Both entities can choose to go public or remain private after achieving a certain level of growth.
Another critical difference between traditional ventures and startups is the source of investment. Traditional small businesses commonly rely on capital injections from their founders, whereas startups rely on funding from angel investors or venture capitalists. As such, traditional businesses enable founders to play a more active role within the company (after all, they are taking a big risk by funding the venture with their own money, and therefore, they are more likely to be involved in key company matters).
Types of Business Venture
One of the first steps to starting a new venture is picking a business structure. The type of structure you choose determines many components of your entity, including its ability to raise capital, the amount of tax it pays, and the paperwork you must file. Whether you’re planning to start a retail business, an online company, or a marketing agency, choose a structure that gives you the right balance of protection and benefits.
Here’s a breakdown of the most common business structures:
A sole proprietorship is generally how most new businesses start. It involves one single owner of a business and doesn’t require lengthy paperwork. In terms of legality, there’s no difference between your personal and business assets. You file a personal return on any income generated by your business, and you are personally liable for any debt it incurs. Most entrepreneurs choose sole proprietorship because there’s no need to register your business formally. Also, the owner is entitled to all profits earned from the sale of goods and services.
You can also choose to start a business venture in a partnership. This is where two or more individuals own and run a business together. Each partner manages the day-to-day operations and contributes property, money, labor, or skill. In return, each partner shares the profits and losses generated by the business. Partnerships can be further categorized into:
- General partnership: In this structure, two or more people manage the business and assume equal responsibility for the company’s debts. Partners also have an equal share in profits and losses, and only pay taxes at the personal income level. Consider drafting a partnership agreement that mentions the specific shares of each partner if you plan to use this business structure.
- Limited partnership: This partnership consists of both general and limited partners. The general partners have unlimited liability and are responsible for managing the day-to-day operations of the business. The remaining partners have limited liability and minimum control over business operations. Companies that decide to form a limited partnership may be able to raise funds from investors.
A corporation or C-corp is a company that exists separately from its owners. This means the company itself, not the people who own it, is held liable for the debts and actions it incurs. However, starting a corporation is more complicated than other businesses. You are required to comply with extensive tax and reporting requirements. The main benefit of owning a corporation is that you can add an unlimited number of shareholders. Many renowned companies, including Amazon and Bank of America, use this business structure to help support their expansion plans.
A business venture can also be launched as an S corporation. This is also a shareholder-based structure that provides every investor with limited liability. The profits and losses generated by an S corporation are passed through to the shareholder’s personal income without being subject to corporate taxes. The downside of using this business structure is that you can’t add more than 100 shareholders. This could be an issue if your company is looking to raise a large sum of capital for business expansion.
A cooperative is an entity or organization owned by individuals who personally use its products or services. Earnings and profits generated by the company are equally distributed among members. You’ll find cooperatives in food, healthcare, and retail industries where group buying is a common tactic. Some cooperatives also receive financial assistance in the shape of grants and low-interest loans from the government.
Limited Liability Company (LLC)
An LLC is a hybrid business structure that combines the tax efficiencies of a partnership with the limited liability features of a corporation. Members of an LLC are not taxed as a separate business entity, which means all profits and losses are passed through to their income. Members report taxable income on their personal returns, just like the owners in a partnership would. All of that makes LLC an ideal choice for entrepreneurs who want to enjoy the benefits of a corporation without being subject to corporate taxes.
Note: If you’re planning to form an LLC company in the US, check with your state’s registrar for specific regulations. Some states may require you to reform or dissolve your business when someone joins or leaves.
Take the time to research these structures to identify one that’s right for both you and your business. Can you find a business partner? How much control do you want over day-to-day operations? Asking questions will help you in making this important decision for the launch of your business venture.
7 Business Ventures You Can Start Today
If you’ve always wanted to own a business, you’re in luck. There are so many business venture opportunities available for any person with initiative can get started in no time. Below are some of our best picks for businesses that you can immediately– no fancy skills or experience required.
1. Website Flipping Business
Not everyone has the means to flip a house for a profit, but just about anyone can buy websites and sell them for a profit with minimal expertise required. Website flipping is a thriving new business model that has everyone from work-at-home moms to college students excited. You can buy a recently created website, improve its content and design, and then sell it for a profit. With Exchange, you can also buy a profitable online store and increase its revenue further to make a hefty profit from its sale. Sites can be acquired for as low as $100, making website flipping one of the best low-cost business ideas available.
2. Bookkeeping Business
It’s not the sort of business venture that’s covered in glory, but companies need someone to ensure the records add up at the end of the year. By offering bookkeeping services to these firms, you can earn a sizable profit. Get started by networking at local business events, or sponsor a press release to give exposure to your business. Once customers start coming in, it’s advisable to have a team of seasoned bookkeepers. Hire a few from your local city or recruit freelancers with positive reviews (cross-check reviews to ensure they’re from genuine employers) to support your company’s growth.
3. Computer Training Business
Know people who lack proficiency in computer programs and new technology? Perhaps they could use a hand in polishing their skillset. If so, you can set up your own development training company and earn a decent profit each month. Clients might include individuals who want to get more use out of their personal computers, or other small businesses looking to master programs such as PowerPoint and Google Apps. While you can rent out space for classroom training, consider using video conferencing tools to keep costs low and expand to international markets.
4. Dropshipping Business
Another great way to kickstart a new venture is to launch a dropshipping business. This is an ecommerce business model where you sell products to consumers, but a third-party supplier manages the inventory and shipping on your behalf. Using Shopify, you can set up an online store and then use a dropshipping app like Oberlo to import products from one or more suppliers. You can also go for a niche-based store and add products from a specific category, like biting toys for pet owners or charm bracelets for jewelry enthusiasts.
5. Instagram Consulting Business
If you have a love of Instagram, knowledge of filters and hashtags, and simply, the drive, Instagram consulting can be the perfect business venture for you. You’ll be able to market your business online and on other social media websites. Plus, you can manage the whole business from your smartphone as long as you have editing and communication apps installed. Clients won’t hesitate to give you repeat business if you can grow their following or improve their engagement. Some clients would even pay you to improve their Instagram bios. You can monetize all of this by charging a flat rate by the hour or per project.
6. Customer Support Business
A lot of businesses out there outsource customer support to specialized firms that can address queries via email, chat, and phone. So why not take a slice of the market by launching your own customer service company? Help desk software will help you manage interactions with customers as well as evaluate your performance. Freelancing websites will help you find chat specialists that can help you meet additional demands. As your business grows, it’s even possible to create a distributed support center with agents working remotely from their homes.
7. Photography Business
If you love taking pictures, maybe you should launch a photography business. Start by doing free shoots for friends and acquaintances, get familiar with people’s demands, and then monetize your talent by creating a range of professional packages. Also, make sure to target a specific industry rather than promoting your services to everyone. Portrait photography is popular because everyone from recent grads to aspiring entrepreneurs demands professional close-ups. You can also create an additional revenue stream by promoting your images on stock photography websites like Burst. Study the theme of the site to ensure you’re submitting relevant photos for consideration.
Launching a business venture is a great way to get into entrepreneurship and work for yourself. Before you get started, however, you’ll want to make sure you’ve taken all of the appropriate steps – like choosing a business structure and researching the idea you wish to pursue. Our top tip is to launch something that fits your schedule, passion and has significant earning potential. The above businesses are a great entry point and often just take a little bit of creativity and the ability to stay focused long enough to get off the ground.