Business Structure

What Type of Business Structure

Should You Set Up?

There are 5 different business structures in which you can set up your business as.

These are:

1. Sole Proprietor (most common)
2. Partnership
3. Corporation (Inc. or Ltd.)
4. S Corporation
5. Limited Liability Company (LLC)

Let's talk about the Sole Proprietor first: The sole proprietorship is the most common structure to form amongst dog walkers. It is inexpensive to form. It is usually owned by a single person or a married couple. The owner is personally liable for all business debts and may file on their personal income tax.

Next is the Partnership: Partnerships are also inexpensive to form. They usually require an agreement between two or more individuals to jointly own and operate the business. The partners share all aspects of the business (good and bad) in accordance to the agreement. It could be a 50/50 partnership or anything else agreed to in writing. Partnerships do not pay taxes, but must file an informational return. Individual partners would then report their share of profits and losses on their personal return.

Next is a Limited Liability Corporation or LLC: This is very common amongst dog walkers. It is advantageous for small businesses because it reduces the risk of losing all your personal assets should you be faced with a law suit. It separates your business and personal assets. You can also elect to be taxed like a corporation which saves you at tax time.

Next is a C Corporation: This is a complex business structure with more start up costs than many other forms. This is not a very common structure amongst dog walkers since there are shares of stocks involved. Profits are taxed both at the corporate level and again when distributed to shareholders. Lawyers are usually involved at this level.

And Finally is a S Corporation: This is more common than the C Corporation since it avoids double taxation. It is taxed like a Partnership. A business must be approved to be classified as such, so it is not a very common entity amongst dog walkers.

There are also other structures which are specific to certain states. Some of these include Limited Partnership and Limited Liability Partnership. It is a good idea to get advice from your accountant as to which would be more advantageous to your business.

Next we will talk about where to purchase insurance and bonding.

Business Name

How to pick a business name?

Your business name will be the first thing your potential clients will see. They will determine alot from just your name. You want your name to stand out and spell out exactly what you do. You also want your name to sound like a professional business. Think about what steps you take when you are looking through the phone book or the Internet to pick out a plumber or carpenter. What is the first thing you look at: Their Business Name.

So, what should your name entail? One thing you have to consider is will you be offering more than dog walking at some point? If you are do not add "dog walking" to the end of your business name.

Many people will just use their personal names such as "Stacy's Dog Walking". That is a good, personal choice. Even better would be using where you live in your name. Make your name hit close to home. For example, if you live in Florida, you can name your business "Florida's Best Dog Walking Service". This name will stand out above the rest.

If you are going to offer more services in addition to dog walking, try naming your business "Florida's Best Pet Care Services". This will leave you open to adding on any kind of pet care service and will not limit your business to just dog walking or just dogs.

After you have picked out your name, you want to be sure no one else is using it. Some businesses will federally trademark their name. This is to ensure no one else can legally use their name nationwide. To check the trademark database click here and then click on search in the right hand column. Now that you have checked the federal database, you need to check your state database. There is a separate database available for each state. To find your state database, go to the Secretary of State site and click on your state. Find the area where you can do a business search. Then just type in the name you are thinking of using. If nothing comes up, that means no one is registered in your state with that name. You may also want to check the newspapers, Internet and the phone book, just in case someone is using it but is not registered with the state. You can not use a name which is in use in your state or nationally. You can't even use a variation of it. So, be sure to check all your resources before putting your business name on paper.

Until next time...