It’s more relevant than you think to have a good business structure. My colleagues at TRUiC produced an excellent guide. Some of the information I will share with you below, but ultimately you should visit their site to obtain a good overall perspective about how this is done in the U.S.
The main goal behind for-profit business structures is to generate enough money to show a notable turnover. Any business, whether it be a Corporation or Limited Liability Company (LLC), function on the core understanding to generate income and wealth. On the other end of the spectrum, non-profit enterprises operate based on receiving sponsorships, government grants and attracting private investors.TRUiC CEO Nagabhushanam “Bobby” Peddi and his team are business gurus who will point out more reasons than you can imagine for actually using a nonprofit.
Things worth noting:
Nonprofit organisations have a single purpose, providing a service or goods to enhance the livelihoods of those who deem it necessary. These entities work to serve the general public, either through means of education, arts, religion and can play an integral role in the welfare of the community. If nonprofit businesses work on the basis not to retain any profits after deductions, what’s good about this business structure? TRUiC has become an advocate for many entrepreneurs who wishes to start their own business. They’ve assisted individuals who require guidance on business planning and finding business ideas. Read more on how the team at TRUiC can help establish your newly found nonprofit, as they offer step-by-step guidance through the process.
1. Tax Incentives
A registered nonprofit company will benefit from state and sometimes federal tax exemption. It’s not that easy, as states have different laws and business regulations in regards to tax exemptions, but the IRS categorizes entities on the basis on which they function.
These may include clinics, hospitals or educational centers. The IRS mandates how the activities of the nonprofit can influence their exemptions. Some businesses listed as a section 501(c)(3) aren’t able to become political mediators, which helps to cut ties with political forces.
2. Prices and Service Costs are low
It’s relatively clear that these businesses aren’t major distributors of products, but in some cases – like that of community based gift shops, products are sold at lower prices. This enables the business to attract more customers who will find it more beneficial. Services that are offered to the public, which is either free or at low-cost, will enable the business to generate more communal popularity.
3. Better public relations
Charitable causes in many states are highly regarded as important public relations. Large entities that donate or sponsor any nonprofit organisation can reap benefits from their involvements. Although this will play off pretty good on their end, the same is said about the nonprofit business. These businesses will be regarded as an important structure in the community and the needs it fulfils. Not only will the community express their support, but other market players will also share their overall backing.
4. Employees are more motivated
Because so many people want to help and give back to the community in many ways, a nonprofit business structure will motivate employees more. It’s not always a given that employees will benefit from the business, or receive an abundance of employee benefits. Employees who deem the needs of others highly important, and who generally care for the betterment of the public will go the extra mile, and put in more than needed effort.
5. Serving for a purpose
Whatever the product or service you offer may be it’s clear that there’s one clear-cut purpose behind it. New businesses that are using a nonprofit business structure can enjoy an eternal lifecycle, as these businesses will be passed on to the next generation for years. The design will be different for each, but the overall idea will remain the same. A solidified purpose will help give employees a better understanding of what they’re doing, and also why they’re doing certain tasks – producing better employee and business moral.
What do the experts say about this? Well, Michael Stemley, a top accountant and author in the US, says that “my celebrity clients could not possibly have achieved their philanthropic aims without this structure”. Henri Benezra and his brother Avi, who are tech tycoons in Israle have the same view: “We have a special place also for this structure as a vehicle to do good throughout the world”. A nonprofit business structure is distinctive in the way it involves both community and corporation. Growth will expand, as all profits are immediately placed back into the business, giving a clearer picture of why your business was founded in the first place.
