Essay On Opportunity Cost

888 Words4 Pages
Starting A Business: Opportunity Cost
The business-failure rate at 90 percent, which fluctuates when factoring in industry type, deters most entrepreneurs. For this, it is imperative to evaluate the overall opportunity cost when deciding to become a business owner. To produce a strong business plan, one must consider the following— the studying and surveying of the desired business’s market, legal requirements, start-up costs, and the business’s operations.
Study the Market
Deciding what business field to pursue is vital to the business’s longevity. Studying and surveying the market is a strategic analysis that provides essential feedback of profitability for a business. Starting a business in a market with a gradual accumulated
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Corporation
A corporation is an independent legal entity, separated from ownership and management. In the eyes of the law, corporations are recognized as its own “person” that is able to enter into contracts, incur and pay debts, and pay taxes. Advantages are tax-deductible expenses, unlimited life (not affected by the death of an owner), unlimited capacity for shareholders, easy transfers of stock, and protection of personal assets. Owners are not responsible for the corporation's liability.
Limited Liability Company
A Limited Liability Company (LLC) exists as a structure in which the members of such an organization are not liable for any incurred debt by owner. Personal assets are protected and cannot be garnished if the LLC files for bankruptcy. A Limited Liability Company does not pay taxes to the state in which it operates from. A major benefit in a Limited Liability Company is the combination of the best features in a corporate firm and a sole proprietorship.

Financing
Raising capital in the start-up cost phase can be simultaneously alluring and alarming. One must produce a viable and exceptional business plan for financing through a bank, venture capitalists, and or any other external funding entities. A business plan is a written description of your business's future, a document that tells what you plan to do and how you plan to do it (“Business Plans: A Step-by-Step Guide”). Banks are reluctant to finance a start-up business and if approved the
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