1. The factors in deciding what form of ownership is best suited to the business are
   1. potential size of business
   2. control needed by decision makers
   3. capital needed to start business
   4. tax considerations
   5. liability concerns
   6. business continuation planning
   7. beneficiary designation
   8. time available to deal with setting up a corporation
2. Advantages of sole proprietorship:
   1. Ease of setting up
   2. low cost
   3. all decisions under your control
   4. all profit is yours
      1. Disadvantages of a sole propretership:
         1. Personal liability is unlimited
         2. business limited to skills of single owner
         3. limited access to capital through banks
         4. lack of business continuation planning in case you kick the bucket
   5. Advantages of a partnership
      1. easy and cheap to establish
      2. skills of partners complement one another
      3. profits can be divided how partners best see fit
      4. more access to and larger pool of capital
      5. flexibility
      6. tax advantages
         1. Disadvantages of partnership
            1. Unlimited liability of at least one partner
            2. less effective at accumulating capital than corporation
            3. difficulty in dissolving partnership
            4. potential for conflict
3. A corporate form of ownership creates a corporation that is a separate legal entity, a “person” in the eyes of the law. This does two main things. First, it allows ownership of the corporation to be divided into shares. Thus someone who invests more capital into the business by buying shares, has more ownership of the company and can be more involved in making decisions. Second, the corporation acts as a liability shield. The corporate veil protects the owners of the corporation from personal liability. The corporation may be sued out of existence, but most likely its owners personal assets will be untouched.
4. Differences between S-corp and LLC
   1. S-corp can have a max of 100 owners, LLCs do not have this restriction
   2. S-corps cannot have non US residents/citizens as owners
   3. S-corps may not be owned by many other types of corporations, LLCs, or trusts
   4. S-corps require issuing stock, holding meetings, passing bylaws, keeping minutes, etc, LLCs are not
   5. S-corps are easier to transfer ownership in than LLC
   6. S-corps have preferable tax treatment to LLCs
   7. S-corps takes longer to type than LLC.

I think that there are two different ways of answering this question.

First, I believe that if we’re talking about failure, it is not necessarily because of the plan. If a business was fundamentally not going to work, even the most thought out and detailed plan in the world would not save it.  Think of all the new startups and apps, backed by investors, that do not work out. I would think that in order for them to get funding from investors they would have needed very thorough business plans, but a good business plan does not guarantee that a venture will be successful.

An example of this would be the app Circa that failed in 2015. Circa was basically an app that aggregated news stories from around the world, but employed a team to read important news stories and then rewrite the important points in a concise format, rather than just posting links to different news websites like google news does. According to an article by the Verge (linked below) Circa was founded in 2011 and raised more than 5 million investor funding. Although I didn’t look through its business plan, I would imagine a company that receives this much funding has a pretty thorough plan. Despite this, the company failed because fundamentally, its concept proved to not work out in the real world. Reasons for its failure can be read in the article below.

http://www.theverge.com/2015/6/24/8842009/why-circa-failed

Secondly, I think that a business plan can fail even for a company that has a fundamentally workable and profitable idea. Reasons are numerous, a lack of preparing for contingencies, lack of research, poor execution, poor management, lack of funding, poor advertising or market exposure, ineffective sales tactics, the list can go on. I believe in this stage it would be important to be flexible and revisit or entirely rework a business plan. I can speak from personal experience on this matter. I am currently working to build a financial planning practice, and am actively growing my client base. Over the summer my natural market ran dry and I was running into difficulties acquiring new clients. A solution that worked for me was to find a new company to work with, and more importantly, find a new mentor. With his coaching I have been able to expand into new markets by changing my marketing and prospecting tactics. In this example, my original business plan was not working and I did not know how to fix it, so I sought out an expert for advice and changed the way I was working. I think the same line of thinking applies to many companies. Perhaps many business owners have a specific vision for how they see things going, and it possibly that their ego or pride can blind them from seeking help.

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