BUSINESS PLAN

PARTS OF BUSINESS PLAN

• Title page and contents
• Executive summary
• Description of the business
• Description of the product and service
• Market strategies
• Analysis of competition
• Operation and management
• Financial data
• Supporting documents

FORMS OF SMALL BUSINESS OWNERSHIP

WHAT IS SOLE PROPRIETORSHIP?

Sole proprietorship is a business owned and operated by a single

person. Majority of business are owned by sole proprietors and this is an
indication of the popularity of this particular form. Most business owners
choose this form because of certain advantages unique to sole
proprietorships.
ADVANTAGES
Sole proprietors are afforded with advantages pertaining the following:
• Ease and cost of formation
• Secrecy
• Distribution and use of profits
• Control of the business
• Government regulation
• Taxation
• Closing the business
DISADVANTAGES
The following disadvantages are inherent to sole proprietorships:
• Possibility that the owner lacks ability and experience
• Difficulty in attracting and keeping quality employees
• Difficulty in raising additional capital
• Limited life of the firm
• Unlimited liability of the proprietor

WHAT IS PARTNERSHIP?

• Partnership is a legal association of two or more persons as co-owners

of an unincorporated business.

• A partnership is formed with the purpose of eliminating some of the

disadvantages of sole proprietorship while retaining some of their
advantages.
ADVANTAGES OF PARTNERSHIP

• Ease of information

• Pooling of knowledge and skills

• More sources of capital

• Ability to attract and return employees

• Tax advantage
DISADVANTAGES OF PARTNERSHIP

• Unlimited liability

• Limited life

• Potential conflict between partners

• Difficulty in dissolving the business

TYPES OF PARTNERSHIP

• General Partnership
is an associated of two or more persons each with unlimited liability
and who are actively involved in the business.

• Limited Partnership
is an arrangement in which the liability of one or more owners is limited
to the amount of assets they invested in the business.
Partnership Agreements
is a document designed to prevent or at least minimize disagreements
between partners.
it is usually covers the following:
1. Purpose of the business
2. Terms of the partnership
3. Goals of the partners and the partnership
4. Financial contribution made by each partners at the beginning and during the
lifetime of the business.
5. Distribution of profits and losses
6. Withdrawal of contributed assets or capital by a partner
7. Management powers and work responsibilities of each partner

8. Provisions for admitting new partners

9. Provisions for expelling a partner

10. Provisions for contributing the business in the events of a partner’s death ,
illness, disability, or withdrawal

11. Provisions for determining the value of a departing partner’s interest and
method of payment of the interest.

12. Methods of settling disputes through mediation or arbitration

13. Duration of the agreement and the terms of dissolution of the business.

CORPORATION

What is Corporation?
Corporation is a legally chartered enterprise with most of the legal rights of a
person, including the rights to conduct a business to own and sell property to
borrow money and to sue and be sued.

Corporation are owned by stockholders. They are issued certified of

ownership called stocks. When large amounts of capital is needed by the firm, the
corporate form is the most appropriate.
ADVANTAGES OF CORPORATION
• Limited liability
• Ease of expansion
• Ease of transferring ownership
• Relatively long life
• Greater ability to hire specialized management

DISADVANTAGE OF CORPORATION

• More expensive and complicated to organize

• Double taxation
• More expensive government restriction and reporting requirements
• Employees lack personal identification and commitment