Quarter 3 Reading Reflection Week 4

In this section of Start Your Own Business, the authors discussed two important preparatory steps for creating your own business. The first step they discussed was the name of the business.  In my previous projects, I never really gave the name of the thing much thought at all, but after reading this, I see the name of the business in a much different light.  The name is such a large portion of the brand, thus it's essential that your name both fits the business and provides positive branding.  The staff of Entrepreneur Media even recommend spending several thousands of dollars on a company to name your company for you.  They claim, depending on the budget of the business, a new business should spend anywhere from $5,000 to $80,000 dollars on a company who will spend weeks developing the perfect name for your business.  Interestingly, the authors recommend a name that is not a real word.  They instead suggest using real prefixes that create mental association.  For example, Acura has the prefix acu, which indicates precision.  I actually like the idea of spending money to develop the perfect name.  I wouldn't spend $80,000 on a name, but I definitely see the value in it.

The other topic they discussed was the legal structure of the business.  The two major structures they compared were proprietorships and corporations.  Like a lot of things in start ups, it was a comparison between cost and security.  Although proprietorships offer a way out from many taxes, they put a tremendous amount of liability and risk on the owners.  Corporations on the other hand are taxed both on the federal and state level but have very limited liability on the owner.  Personally, I think the risk of a proprietorship may be too much for me, so a small corporation may be my best choice.