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Reasons to Start an LLC Business

There are various resources that tell you how to start an LLC business. But, there is a big difference between knowing and actually doing the right thing. When you start an LLC business, it is important to have a good grasp of why you are doing it. More than knowing how to start the business, you have to find reason in why you are getting into business in the first place. Here are some of the reasons that could motivate you in starting your own LLC:

- To make money out of something that you enjoy doing

Locals enjoy doing several things, but not everyone could profit from what they do. If gardening in the backyard, for example, is a passion, you might want to think about selling your harvest. You can always turn your hobby into a small business and generate income from something you love doing. As they say, if you enjoy what you are doing, it would not feel like you are working. You can start an LLC business that you can operate from your own home with your relatives and perhaps a small group of friends as your members.

- To get a slice of the pie

Recent years saw a surge in products marketed based on health benefits. The green revolution has begun and this puts at an advantage being an agricultural state. If other companies can sell health-based products, so can you. Identifying a niche that has not been saturated yet will give you a bigger chance of getting a bigger share of the pie so to speak. This goal is enough to sustain your interest even after you start an LLC business.

- To help the community

Did not earn the nickname “The Volunteer State” for nothing. This sense of community can be a source of profits as well. You can hit two birds with one stone when you start an LLC business: you get to help your community and you earn profits in the process. You can think about employing people from your community too as a way of helping ease the unemployment rate in your locality. On a more personal note, you will be helping the people you employ put food on the table and send their kids to school.

- To be your own boss

This sounds cliché but it is true. Most folks would love a life of self-sufficiency and without having to be at the beck and call of someone else out of fear of losing a job. It’s also the best way to regain whatever self-confidence you may have lost at the expense of some power-trippers.

- To have a source of income because the day job is not enough

Those who are employed do not necessarily get enough money to support all their family’s needs. Some have even taken pay cuts just to stay employed. With a business, they can augment their incomes to bring home more earnings. Putting up a small business like an LLC will give these people another source of income stream that they can use to provide their family’s needs.

When you are clear about why you want to start an LLC business, it is easier for you to stay on track towards your business goals. All your action plans will have to revolve around your motivation for doing business.

Purchasing an Established Vs. Starting a New Business

Purchasing an Established vs. Starting a New Businesses, remains a common debate among upcoming business owners. Which route will provide the most profit return? Which business is more likely to succeed? Certainly there are advantages and disadvantages to each concept which also depends on buyer’s personal situation as well.

There are reasons to go for buying an existing business than starting a new one which are as under:

Entrepreneurs View

Experienced entrepreneurs have found that the risk to reward ratio is more in your favor should you decide to purchase an existing business over starting on of your own. Statistically, number failures are manifold in new businesses than established businesses.

Existing Customer Base

When purchasing an existing business, you are buying not only a brand name but a customer base that has taken years to establish. The seller provides the list of customers as part of the sale. This works in your favor simply because not as much money is spent advertising your new business. An existing business has a proven concept and the risk is relative low to the buyer.

Ease of Financing

Many banks have an easier time lending $1 million to a purchaser interested in a business with a steady cash flow of $200,000 – $300,000 dollars because the cash flow can easily support the payment as opposed to lending $200,000 dollars on an unproven concept and risky returns that may never be fully actualized. This results in increase of salability of the company.

Established Cash Flow

In existing business there is history of sale for many years so one can carefully rely on cash flow which decreases the amount of risk, while in start-up business all sales figures are estimated and not actual which increases the amount of risk.

Proven Concept

Existing business has history of successful operation which buyer can easily verify by doing due diligence with the help of selling business broker while in starting a new business there is a good amount of risk of successful and smooth operation.

Focus

Seller has already done what it takes in starting a new business and makes it successful operation. All trained employees and staff are in place for smooth operation of the company. Seller secured and added value to the business before presenting it for sale and now buyer can focus only for further improvement of sale without worrying about anything.

Price & Risk Factor

With all the advantages of buying an existing business, many entrepreneurs have opinion that an existing business is expensive and costs too high in comparison to starting a new business therefore more risky.