I was on my Morocco holidays and one day there was the call. “Let’s get started on the idea”. I was surprised because it was back in 2 years whenI suggested to my friends about starting our own business. Anyways, to my shock and delight at the same time, my determination to be the part of changing the world was at its peak. One thing that I always had in my mind was that, once its’s all get started, there are more challenges on my way. As per my observation, many of the start-ups just fail because the structure of the business was not defined. When you own a business or getting started with and entrepreneurship, keep in mind the one thing which is business ownership. As an owner, it is your responsibility to decide about the company’s structure.
Before deciding the structure of your company, one needs to get the idea on the choices he/she have. Business doesn’t get the revenue overnight, it has to go through many stages and then it starts generating the substantial profit. For the young entrepreneurs, here we have an explanation of seven stages of ownership in a simple and easy way. I hope these stages will help to get through the root level challenges of your newly born venture.
7 Stages of Business Ownership in Travelling Industry
These stages are essential to learning a decision about the travel & tourism industry growth and it gives you some insights on your travel business idea. From initiating the first step to exit point, everything thing is important to discuss at the very initial stage.
- Sole Proprietorship
Sole Proprietorship in tourism & travel industry is one of the companies that is not registered by the state. Yes, you are the owner of the travel company works solely to manage it overall. You are an attorney and you don’t need foreign advises as it’s all about your decisions. The disadvantage of it is limitations, yes it can limit your financial resources and as an only owner of the company, you will be all alone responsible for any obligations and accountability of losses. It is considered for the small business ideas where resources are limited and an owner also have very few debts to pay.
The partnership of hotel, tour operator, flight & transport companies includes all of the basic liabilities regarding the travel business ownership. It involves more than one person who decided the future of the organization. In partnership, you need legal formalities as how to make the decision? what are the financial liabilities? who will be held accountable for the losses? equity between all the partners and how they will resolve disputes in the future?At last, the shares and profits are also important to decide at this moment. This stage requires the legal formalities and it is always good to do in the initial stage. This kind of partnership can be called as a general partnership where each and every partner is equally responsible for the debts, investments and also liable for management decisions.
- Limited Partnership
As it in the name, a limited partnership is where at least one of the partners has limited authority and liability. It limits his decision power as well as non-liability towards the debts etc. According to this term, a limited partner has a limited control over the daily operations of the organization and leading to that, he will not have any liability on losses and debts of the country. There are experts ina limited partnership and the one who is interested to create such structure should consult them.
- Limited Liability Company (LLC)
It is the approach implied by the people who withdraw to take any liability for the company’s losses. One of the main benefits of this structure is that your personal assets are always protected and had no links with the losses that your company may sustain. Furthermore, it also helps you gain the public attention on selling a service or products and let you have financial loans too.
- Corporation (For-Profit)
Corporations usually need more capital and resources to build an organization and fulfil all the legal formalities. In this structure, the owner has limited liability for losses but taxation is double on the profits. These originations play a vital role in building up a strong country.
- Non-profit Corporation (Not-For-Profit)
These corporations have no liabilities as they have only aim that is reforms of the society. It is build up to help the needy people of the country. It can be for the orphans, handicapped or any other community that needs special help in order to be the better part of the society. These institutes are run by the donations mostly and get no profit other than serving the society in a better way. So, if there are no profits, there are no taxes to be paid by the organisation.
Some people believe in true equality among the management and the team. These are usually retail business organisations. People cater to some products and sell them in the market. So, these cooperative institutes have very less no liabilities on legal papers. A simple paperworkis done just to ensure the state’s approval for moving on the operations.
However, it was just a brief summary of each and every structure that can be applied while building up your organisations. I personally believe that people need more intellects that should think beyond the defined boundaries. We need to look up to maximum possibilities of growth in the field of entrepreneurship. You may be good enough for taking the decision of your own company but never ever rush to the final decision without consulting the experts. The world needs some alterations in this field now. The concepts that are still unclear should get more attention now. So, the world should have a better understanding of the legalities of the business. The strategies from the idea to the exit are decided at the beginning so plan all your steps including idea, launch, survival, floating steady, growth, evolution and exit. Now it’s up to your vision. Well, I am glad that my morocco holidays were a fortune for beginning my own blogging venture.