When you start your own aesthetic business, there are several things to take into consideration which fits into your budget. One of the most important decisions to make is which business structure to choose for your business. This will also help you to determine the tax which you will be paying for your business in future.
In order to decide which structure will work best for your business, here is an overview of some of the well-known business structures.
As the name indicates, sole trader is a business that is operated by a single person. He solely operates the business with complete authority, take all decisions and responsibility. Due to its small size it can also be referred to as the ‘micro business structure’. Numerous skilled tradesmen like plumbers, electricians, carpenters etc use this structure to operate their businesses.
In this structure, yearly account of sales, profits and expenses is conducted for the income tax and insurance. If the annual turnover of business exceeds the limit set by HMRC, you need to pay the VAT as well.
Pros and cons
Some of the pros and cons of this structure are following:
This business is based on the partnership between two or more than two persons. Each partner in the business shares the same level of authority to operate the business and equally involves in the day to day activities of the business. Every partner in the business is held equally responsible for any decision regarding the business as well as for profits and loss.
Partnership business can be developed with anyone, but it is highly recommended that you have a proper partnership contract created by a lawyer which should be signed by each partner and a business agreement can also be developed in case someone intend to leave the business partnership in future.
Pros and Cons
Some of the pros and cons of partnership structure are following:
In this type of business model, you can keep your personal assets and finances separate from your business while having a separate bank account for that. This implies that at any stage if business is in the situation that requires termination, then you do not need to use your personal finances to pay the outstanding debts.
You can choose from two kinds of limited companies:
The Private as well as Public Limited companies need registration with the Companies House in order to legally start the business. The company will need to pay the taxes for its trading profits on products and services its offering and the profit dividend will be paid to the public share holders.
Pros and Cons
How to make the right decision for your aesthetic business?
There can be no right or wrong decision when it comes to deciding about the business structure as it depends on the individual circumstances, how you wish to grow your business and how much effort you are ready to make for it. Every business model has its own pros and cons so in order to make the right decision, you should;