Understand How To Structure Your Business For Success

Understand How To Structure Your Business For Success

Ask business leaders how their business is structured and you’ll see a lot of them being confused or unclear about it. Why is that? Well, simply because structuring a business requires more than just investing a heavy chunk of money. It is the reason why a business succeeds or struggles to even survive. 

 And this comes down to the question: What’s the purpose of your business? Is it just a medium to make money or does it follow a set of ethics ? Does it provide value in any sense? 

Well, if you are a newbie or an existing business that has never thought about structuring a business like this, read the points that we have mentioned below. 

Define Your Purpose 

No doubt that money making is the major motivation behind your business but one should never compromise on the major factors : purpose and your own story. 

A business should always follow a structure that defines its ‘why’ for existence and the story it tells to its customers and employees.  Following an ethical structure would always push you higher as a brand. 

Do Your Research Properly 

Do Your Research Properly 

Now, the most important thing to do before even walking on your entrepreneur journey, make sure you do all your research about the options you have. Study the various organizational structures, and see whether your business plan suits your required needs. 

Each structure serves a different purpose. What works for your competitor might not work for you. Be aware and picky when it’s about choosing a business structure. 

Keep it Simple and Original 

Now here’s another important thing. Keep your process simple and original. The simpler your organizational process is, the more your company is likely to flourish. A complex process may invite unnecessary problems for you, increasing the chance of your values being lost in the rut. Always aim to keep the things within the organization simple in a way that it maintains clarity, your vision and values. 

Types of Business Structures 

Types of Business Structures 


A partnership business is popular as the best option for individuals and small businesses with low budgets. A partnership is a type of business structure where there are two or more persons as owners who share the profits and losses. Talking about the tax treatment in partnerships, the partners are taxed only once and not the business itself. 

Sole Proprietorship 

A sole proprietorship, also known as individual entrepreneurship, sole trader, proprietorship, is a type of business structure with a single owner who is liable for all the liabilities incurred by the company. A proprietorship follows pass-through taxation where the business is taxed only once and is passed through the owner. Unlike a corporation, a sole proprietorship is not considered as a separate entity. 

S Corporations 

An S Corp is a legal business entity which is subjected to certain requirements of the Internal Revenue Code to officially establish its existence. An S corp enjoys the regular benefits of a corporation and is exempted from paying federal corporate taxes unlike a C corporation. 

C Corporations 

As per the United States federal income tax law, a C corporation is any business that is taxed separately from its owners. C corps are different from S corps and both enjoy limited liability protection but only C Corps are subject to corporate income taxation. 

What’s the Best Business Structure For You?

Now, that you are aware of all the popular business structures, the question is what’s the best business structure for you? Well, it depends on a bunch of factors including your specific business requirements. So, make sure you perform a rigorous research before choosing any one of the above. Whatever business entity you choose, ensure you that get all the business licenses including a seller’s permit. For instance, if you launch your business in California, you will have to get a California seller’s permit to get started with your market operations.