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9 The small business

Many of the larger businesses (for eg. in the UK) are public limited companies, which means that the public is able to buy and sell their shares on the Stock Exchange. Such companies have the letters PLC after their name and example include Mark and Spencer, Guinness and the national Westminster Bank. However since the minimum share capital for a public limited company is £ 50. 000, this makes it an unsuitable choice for small businesses, which are more likely to take one of the following forms:

Partnership

This is the best way of starting a business together. They can set up a partnership and agree on how the business will be operated. All partners are responsible for the debts of the partnership and profits and losses are shared between them.

Private Limited Company

A company can be formed with minimum of two people becoming its share holders. In order to establish such a company specific administration procedures must be followed. For example the share holders must appoint a director and a company secretary. If the company goes out of business, the responsibility of each share holder is limited to the amount of money that they have contributed. A private limited company has the letters Ltd (Limited, after its name).

Sole Trader or Sole Proprietor

This is the simplest way of starting a business. You are self- employed and entirely responsible for all aspects of running your own business. This is especially suitable for small retail businesses. There are some advantages and disadvantages in these types of small business. For example partnership is a good way of sharing the pressure and work involved in starting a business. And in Private limited company the financial risks that you taking are restricted. As for sole Trader - you have total control of you business.

But for Private limited company it may be difficult to expand, and you may have to sell your possessions if the company goes into debt. And for a sole trader it is complicated and expensive to set up.

Starting a business always involves a certain amount of planning that's why you should prepare a short list of questions that you would need to ask yourself before opening a business:

1. How much money will I need?

2. What kind of business will it be? (nature)

3. What are the reasons for opening a business?

But according to the experience of the representatives of small business - setting up a business, if you are not careful, can suck up money faster than it can be counted. And also you should be able to sacrifice, when starting your own business. For example you will have to sell your house in order to get enough money so start the business or you will have to work seven days a week. It's very hard not only for you but for the whole family.

There are some advices to young people thinking of setting up their own business:

to research whatever they what to do very carefully, to talk to friends and relatives and people they know about what they want to do and to really not give up. You need to believe in what you are doing but you can get a lot of support from people around you. To listen to people and to leam from others. And also to get the right sort of background in what you are doing whether it be in terms of working for someone who is doing a similar operation to what you want to do.

When you decide to start your own business you should be able to realize whether you are a self starter how you can get on with other people, can you lead and motivate others, can you take responsibility, can you organize everything, can you make decisions, do you enjoy taking risks, how do you react to criticism, can you cope with stress, how do you view your chances of success and etc.

Many banks offer a specialised service to people wishing to set up - their own business. This may include advice on various aspects of starting and running a business as well as financial assistance in the form of a loan. They will ask you to prepare business plan giving information about your proposed business. Business plan form may include:

1. Details of the business Name of business Format (limited company, partnership etc) 2. Personal Details, Relevant work experience 3. Personnel, Number of people/job function 4. Product/Service Description 5. Market: Describe you market, Who are your customers, Is your market growing static or is decline?, Who are the main competitors, What are the advantages of your product or service over the competition, 6. Marketing what sort of marketing or advertising do you intend to do. 7. Premises/ Machinery/ Vehicles/, Where do you intend to locate the business and why?, What size and sort of premises will you need what machinery/ vehicles do you require 8. Objectives

What objectives do you have for the business:

Short-term, Medium term, Long-term.