Entrepreneurship doesn’t mean doing it all on your own. There are a number of business options available to you, ranging from a sole proprietorship to a joint venture.
In this session, you’ll learn all about different business ownership options as well as some terms unique to entrepreneurs. We’ll also take a look at purchasing a franchise or an existing business.
Types of Business Ownership
There are many different configurations that a business can take. The jurisdiction where you do business might use different terms than the ones we have below, but they will have similar terms and meanings.
An individual establishes and runs a business where they make all business decisions, and are responsible for providing a product or service(s).
Two or more people decide to work together and share the profits (as well as the risks) associated with running their company.
The owner of a business decides to create an entity that is separate from their own self. That business has the status of an entity. It can enter into contracts, pays tax, and files taxes separate from the people who own the business.
Two or more people contribute goods, services, or monetary resources to a shared business enterprise. This is usually founded with a contract that all parties will sign. That contract will describe things like profit distribution, the management structure, and who is responsible to contribute what.
An individual or a business may wish to establish and operate within parameters set by another company where the products, services, procedures, and more are all prescribed by the company.
A company in one country can establish a presence in another country, provided they are following all the laws and rules in the new country.
Speaking About the Entrepreneur
You may also hear some less formal terms that define different types of entrepreneurial ventures. Here are some popular terms that we’re hearing right now.
An entrepreneur who works completely on their own. They may hire temporary employees or contract out parts of their business, but they maintain control and autonomy.
A typical microbusiness makes less than $2 million a year, requires less than $50,000 in startup capital, has less than five employees, and has sustained this profile for five to ten years (or since the business’ inception). However, legal definitions vary by jurisdiction.
An entrepreneur who runs an online business.