There exist three basic types of business structures. One should know the basic forms before getting into a business situation to avoid potential problems. The three basic types of business structures are as follows:
i) Sole Proprietorship:
This type of business is owned by one person who is called a proprietor. The proprietor manages the business. Some disadvantages are as follows: the proprietor assumes all risks of the business and personal assets can be taken by creditors. One major advantage of the sole proprietorship is the owner makes all the decisions.
a) The general partnership business structure is owned by more than one person.
One or more partners may manage the business. As to disadvantages, like the sole proprietorship, partners assume the risks for the business and their assets may be taken by creditors. Additionally, partners may disagree about the best way to run the business, which could result in a conflict. An advantage of a partnership is the owners share risks and decision making.
b) There is another form of business structure in the partnership arena, which is
called the Limited Liability Partnership (LLP). This form is different from the general partnership structure. Liability is limited to the assets of the partnership in this business form.
a) The general corporation is owned by stockholders (or shareholders).
Usually a corporation may have many owners and they usually employ professional managers. The owner’s risk is usually limited to their personal investments and they often have very little influence on the business decisions. However, the corporation veil may be pierce if the corporation is negligent in its operation.
b) The next corporate form is the Limited Liability Corporation (LLC). This
structure is different for the general corporate form. As the name implies, liability is limited in this form as in relation to the general corporate structure.
With the hard financial times looming over like a storm cloud, many are looking for ways to earn a living. With so many losing their jobs, some are looking at opening up their own businesses as product wholesalers. Starting up any business requires a little bit of homework. Try to learn as much as you can about the works of the business. Here are some facts about the world of wholesale.
The role of a wholesaler is to get products from manufacturers to dealers. They purchase products from the manufacturers or other sources and sell the products to dealers. The profit earned is the difference between the manufacturer’s price and your dealer’s price. As a wholesaler, you will run a private company in which you will own warehouses to stock the products obtained from the manufacturers. These products are then transported to your dealers at a higher price from the manufacturers’ product price.
In other words, as a wholesaler, you buy goods and sell products to clients. The difference with the retailers is that you sell items in bulk and you will not deal directly with the buying public. You will deal more with manufacturers, other wholesalers and retailers.
Decide on your product line. Get items that you know will sell fast. Location also plays a part in the flow of products from manufacturers to your clients. Set up near your clients so as to save one transport expenses and time for products to arrive to clients.
Good communication and negotiating skills are good values to possess in this business. Negotiating with manufacturers for the least possible price and handling dealers is part of your job as a wholesaler. The power to persuade and convince clients to regularly purchase your products will guarantee your way to succeed in this business. Moreover, being able to recognize trends in product demand and quickly acting on getting your hands on those goods will make your business even more profitable.
Basically, in the wholesale business, one must be determined and have the drive to manage such an endeavor. One must maintain a good relationship with suppliers and dealers to have a more pleasant and profitable business venture.