Starting a successful business is a goal of several people around the world. There are various elements that a person should consider when starting any business. A sole proprietor has various advantages, for instance, a person gets full control of the business including the decision-making process, one enjoys all the profits realized from the business, and there is ease in formation of the business. A computer business requires the owner to be passionate and knowledgeable due to the several challenges involved. The disadvantages of sole proprietorship include unlimited liability, the limited experience, difficulty in accessing long-term financing, and limited startup capital. Some of the procedures involved in starting a computer business include a legal process to enable an individual run a business as per the local and federal government’s requirements.
The first step in starting up a business is deciding on the relevant name of the firm. It is essential to formulate a name that is simple to understand and defines the organization. Customers may get attracted to the business due to the brand name. A computer business requires a technological brand name to match with the type of services the owner intends to offer to the customers. The name should be short and precise to deliver the intended impression. A brand name such as ‘Smart Computer Solutions’ will attract clients to the organization.
The legal structure of a business depends on various factors such as the size of the organization, the products of the firm, availability of capital, and the tax laws involved. The computer business will be a sole proprietorship, hence no complex legal formalities. The owner will enjoy relative freedom from government control and special taxation. A taxpayer identification number will be a requirement, as it will be used for payroll and income tax reporting. The business may use the social security number, but in case there will be more than one employee, the owner will require an employer identification number ( Keenan, & Riches, 2007, pp.42). A local business license is essential in conducting any form of business in the country. The license allows an individual to conduct business in any art of the country as per the laws. There are different fee structures for different business licenses and the location of the organization. The initial fee charged for the business license is usually $100, and an annual renewal fee of $100.
The law requires an individual to apply for a fictitious name certificate if the business bears a different name from the owner. The certificate, also called ‘Doing Business As’ is offered in the office of the secretary of State. The fee depends on the state the business is located, but in most cases, it is usually $20 after every five years. The certificate allows an individual to open an account, sign a lease, and borrow a loan with the business name ( Keenan, & Riches, 2007, pp.53). Insurance is crucial in any business to protect against unplanned incidences such as theft or fire. A sole proprietor should ensure a legally registered insurance firm covers the business; owner, who has unlimited liability of the business, passes the liability to the insurance company in case of an accident. Charges of the insurance cover differ, depending on the number of risks of the business.
Legislation of a business is crucial as it allows a person to operate within various areas of jurisdiction. Operating a business according to the law prevents an individual from unnecessary fines and jail terms. Customers become loyal to the company as they are assured of the products and services offered by the business. Legislation prevents people from conducting illegal businesses, which bring unfair competition to other legal firms in the industry.
There are various legal issues involved when a sole proprietor lets an agent act on behalf. The relationship involves two parties, the principal, who is the sole proprietor and the agent. Legal principles may allow an agent to conduct a few numbers of activities in a firm, or be in charge of all transactions in the business. Agents may have limited authority of the firm’s activities; there are three forms of authority in the law of agency: actual authority, apparent authority, and ratified authority. Actual authority entails the creation of contracts, either written or oral. Apparent authority deals with the principal allowing the agent to act on behalf, and being made to believe that agency exists between the two parties. The ratified authority involves assigning leadership duties to a person, who previously did not have the assent to conduct business on behalf of the owner.
Agents have various duties to perform, for instance, the duty to obey the principal, to be loyal to the business’s activities, to perform the assigned duties with skill, and to account and give accurate information on the funds spent. The agent should protect confidential information of the business, and should equip the principal with relevant information of the business. A breach of the contract by the agent can lead to liability on the principal.
It is essential to enhance proper communication skills to recover money from the customers. The license from the office of fair trade gives a sole proprietor the right to claim lost money from the clients. A business person should prepare accurate data listing all the debts a customer owes the business; this encourages a healthy relationship between the debtor and the creditor as both have a mutual understanding of the funds involved. Contacting the client at the appropriate time helps in proper communication methods, and avoids disputes that result when a debtor is contacted at unreasonable times, for instance, at night. The owner can allow the debtors to pay the money owed in installments to enhance settlement of the debt. Another option includes hiring a debt collector, who is legally authorized to collect the money on behalf of the owner. The costs depend on the agreement made, but they may add up to $100. The money owed can be recovered within two or three weeks as debtors do not will to pay fines on failure to settle the debts.
Complaints of the computers purchased by the customers should be handled in a professional manner to avoid disputes that may lead to a downfall of the business. Some customers may not be trustworthy; hence it is essential to conduct a market research to get relevant information from other customers. The sole proprietor can act on the response obtained from clients to promote the quality of the computers sold. Changing the supply chain can reduce the chances of purchasing faulty computers. A person can offer warrants for the computers purchased to promote the customers loyalty in the business’s products.
Owning a business is a fulfilling experience as it exposes people to different situations, for example, creating relationships with clients, government, and agents. It is crucial to ensure that a business meets the legal requirements and seeks to enhance customer satisfaction. A business owner gets the chance to learn different legal aspects required in running different types of businesses. Proper accounting records should be maintained as they dictate the progress of the business.
Keenan, D. J., & Riches, S. (2007). Business law. Harlow: Pearson Longman.