People start businesses for various reasons which may include, loss of a job, boredom on a job, an idea they believe may be a money-maker, etc.  Whatever the reason that businesses are started, people start businesses with the expectation of success.  Many of these business owners become frustrated after a few months and by the end of the first year, a large majority of the businesses are gone.  If entrepreneurs are not passionate about their businesses it will be difficult to stay persistent and motivated.  To be passionate means loving the creation of the product or the act of serving in a particular field so much that they willling to give the product or service away.  It is important to them that the customer is happy and the relationships they form are more important than the profits they make.  Passionate business owners will tell you that getting paid for what they do is the icing on the cake. 

Frustration sets in mainly when sales are not up to expectation and the owners feel powerless to make change happen.  It seems that whatever they do just does not work.  Why is this?  This happens because most entrepreneurs have a good understanding of the products or services they want to sell but they have no understanding of how business really works and all the details that must be attended to.  Since a business owner wears many hats or must be adept at all the functions that are necessary for a business to succeed, sometimes it is extremely difficult for the entrepreneur to excel at all functions that must be done.  It is then necessary for them to admit they can go no further on their own and get help. 

In New York City and other cities around the United States, entrepreneurs can get help for their businesses through complimentary workshops that are sponsored by Small Business Development Centers, government agencies, or get complimentary advice from various non-profit organizations.  This complimentary help may be all some entrepreneurs need to get them going down the road to success; but it may be limited and not be sufficient for many entrepreneurs and it may then be necessary for them to pay for professionals to guide them.  For example, entrepreneurs may be given complimentary advice on writing a business plan but may not be able to write a solid plan after all the advice and these centers or organizations do not write business plans.  Also, some law firms may give pro bono advice in many areas like leases or contracts but will not do specific work in those areas without pay.  The entrepreneur must be able and willing to admit that they need help that they may have to pay for. 

The business owner have to be persistent in their efforts to succeed and must be careful to make the right decisions.  Owners may decide not to budget for marketing and decide to use whatever money remains after all the other expenses are paid.  This may be a mistake since the marketing campaign done with the left-over funds may not be the right fit to reach the target customer of the business.  For example, if research proves it is best to reach the target with a 3-minute video on the internet, it will be a mistake to hand out flyers on the street. 

Setting reasonable and challenging goals are a must for every business.  Research on past behavior and to some extent “gut feeling” helps the owner set these goals.  Staying persistent and motivated rely on setting both short-term and long-term goals.  It helps motivation if short-term goals must be achieved within three months.  If goals are set, the business owner must constantly ask the question, what am I doing right now to ensure achievement of the goals?  At least one of the long-term goals may decide where the business should be by the end of the fifth year of operation and short-term goals will be the steps taken to get to that point.  Understanding that every journey begins with the first step and doesn’t end unless one keeps moving, will help the entrepreneur take all necessary steps to reach that prize. 

Businesses that do not have written goals with the systems that must be used to achieve them have a hard time surviving.  When situations occur that can adversely affect the business, they have a hard time deciding on how to react since they do not know where they should be heading and most times, this failure to react promptly leads to failure of the business.  For instance, if a restaurant has a goal to sell $2,000 every day, and there is a water main break that keeps customers away and that takes three days to fix; the owner has to decide quickly what must be done to catch up when the break is fixed.  Not making that decision quickly can have adverse effects on the cash flow of the business and may have a negative ripple effect for the business.  Imagine the business without such a goal; this business does not even know what sales should be achieved on a daily basis in order to grow the business and will not know what the right decision should be to catch up. 

Achieving the business goals translates into reaching the personal goals of the business owner.  How hungry the owner is to reach those goals will determine how persistent and motivated the owner will be in attaining them.  A goal may be compared to one taking a journey to a particular place; when one gets to the end of the journey and sees all there is to see at that place, one then starts thinking about getting to another place.  Goals are not written in stone and must be adjusted regularly to meet the needs of the business.  All business have needs but not all business owners have written their goals or understand how to achieve them.  Staying focused on the journey and where it may end will keep the entrepreneur doing everything necessary to attain success. 

Businesses that succeed are persistent in their efforts and the rewards of achievement keep them motivated.

You have a great idea, a wonderful vision, a fantastic dream – and you are trying to figure out how to bring it to fruition.  This could just be legacy you will leave for your children.  You have found the path you must travel to gain the ultimate freedom.  You must now avoid the mistake many others have made – deciding on how to operate without first understanding what the operation is going to be.

Many entrepreneurs are fully cognizant of the fact that they know what they want to do but don’t fully understand how to do it.  They go to professionals they trust for advice and, unless those professionals understand the dimensions of a successful business, they are often misled.  You will be misled if you do not know which questions to ask.  It is a good idea that you be fully acquainted with your needs before you seek advice.

Those professionals that give advice about the right entity for an entrepreneur to choose must know, at the very least, the average annual taxes that the business is projecting to pay over the next few years and how much growth is anticipated for the future.

The usual entities that entrepreneurs choose are (1) Entrepreneurship (2) General Partnership (3) Limited Liability Company (4) S Corporation and (5) C Corporation.  These entities differ in various ways including the deductions that are allowed and how taxes are paid.  For the first four entities, taxes are paid through their owners and are like payroll taxes.  The C Corporation pays its taxes separate from its owners.  For payroll taxes, the more income a person declares to the government is the higher the tax bracket that person is aligned to.

The owners of some of the first four entities end of paying close to 50% of the taxable profit while some C corporations with the same taxable profit pay 35% in taxes.  Get the information you need before you make a decision and get it from a professional who understands all the dimensions of a successful business.  It is sad, but true, that many of those professionals that give this type of advice to entrepreneurs do not know how to successfully develop their own companies – yet they are giving advice.

It follows then, that unless you know your numbers, you cannot decide which entity you will be choosing to operate under.  This means you should have a well-written business plan.  If you are under the impression that a business plan is only written when someone is looking for loan or equity financing, you should readjust your thinking.  You need a business plan for your own use as a roadmap to guide the development of your business.  You will be proactive rather than reactive when situations occur that ordinarily could be detrimental; and you will be more likely able to overcome them instead of giving up in frustration and desperation.

Of course, deciding on the entity will take several factors into consideration including

·         How much profit the business will declare for tax purposes

·         How many partners, shareholders or members will be liable for the taxes

·         How many expenses the entity will have to deduct

These are examples of some of what the business owner has to be aware of.  As a responsible business owner, you will seek advice from the best sources.  You will be willing to give up time and money to get whatever you need to make the best decisions to grow your business.  A business that is not growing is dying.  After first determining if there is a need for your product or service; after developing and writing your business plan, you will then determine the best entity to operate under.  There are no shortcuts to this determination.  Doing it backwards can cost you thousands of dollars in taxes.  If you decide on the entity before you understand your numbers can put you in a hole that may take precious time and money from you as you struggle to get out.