The final lecture of the day was about the actual process of setting up a business with the bank. It was good to end the day on a positive note by giving everyone confidence on how to begin the process.
I learnt that there are 3 relevant types of business I can set up; Sole Traders, Partnerships and Limited Companies, all with big differences.
Soletrader: All aspects of the business are owned by you, including debts incurred. This sounds like a bad idea for a first business because it is one that has a high chance of failure and can leave you with a huge amount of debt. It doesn't appeal to me.
Limited Companies: These are similar to soletraders but are easy to set up, end, manage but are difficult to share and pass on. The main advantage of this type of the limited liability. I feel this might be a good idea if I chose to set up a small business but I would want a lot of experience in the workplace first.
Partnerships: This is probably the option that appeals to me the most. It allows other people into the business and gives joint responsibility over profits and debts incurred. A big benefit of this type of business is the ability for everyone to fundraise together to start the business off and you can also have a bigger business as you'll be drawing on different peoples skillsets and abilities. The main problem with this type of company is that a lot of personal problems can arise between staff such as different attitudes towards decisions and people wanting to leave the partnership. I think for this reason it is important to be sure of you form a partnership with and ensure that they have the same long term goals.
We also talked about the different types of funding a business and how to impress a bank. I think that its more important to consider this at the time of forming a business as it is difficult to know an accurate financial fore cast of where I will be in a few years time.
