New Business Venture: Forms of Business
A New Business Venture Going into business is not as easy as a snap of a finger. If it were, more people would have one and be successful at it. However that is not the case. There are many steps you must take and the best way to do that is in creating a business plan.
Ebert and Griffin state “Before investing time and money, the starting point for virtually every new entrepreneur is a business plan in which the entrepreneur thoroughly develops and describes her or his business strategy and demonstrates how it will be implemented” (p. 7). In the scenario, I am an inventor who has created an idea that will be suitable for the daily needs of consumers. There are many issues that can hinder my progress as an entrepreneur. The scenario states that I lack the financial and management skills it takes to begin and even own my own business. For example, I am financially unable to “fund” the costs that will be necessary to begin any investments needed to begin this project. I’m oblivious to how I’m going to begin production of my idea.
I’m also aware of similar inventions that could possibly heed the sale of my own, however, “Innovations are not always new products” as stated by Ebert and Griffin (p34). There are three forms of business: sole proprietorship, partnership, and corporation. There are many advantages and disadvantages in the different forms of business in relation to my business venture. To begin with, as sole proprietor, I wouldn’t work under anyone and could be my own boss.I could make up the rules and could develop what I wanted based on my own ideas. However, considering I do not have the funds, it would be extremely difficult knowing that I would be “personally liable (or responsible) for all debts of the business” (AIU Online, 2010). Subsequently, there are partnerships.
Ebert and Griffin state that a “partnership is a sole proprietorship multiplied by the number of partner-owners” (p41). That’s great if I am feeling uneasy about my skills and do not want to go into something alone.I can use the skills of my partners and I also am backed up financially because the money will not be coming only out my pocket. As well as my chances of getting financing will increase. Yet, my and any ideas have to be agreed upon which can cause problems amongst all partners. Last of all, there are corporations. “Corporations are businesses that have property rights and separate status from the owners and they are financially liable (or responsible) (AIU Online, 2010).
This form of business is great in reference to the amount of liability you are responsible for. As an owner, I am accountable for only the amount of funds I invested. However the disadvantage of this type of business is how extremely pricey it would be to start up. Between the three different forms of business, I would choose to go with partnership. With a partnership, all partners can pitch in ideas for the invention and we could come to a well developed conclusion. Also someone may have talents that I do not possess.Someone may “contribute a well known name or special expertise” as Ebert and Griffin state (p41).
Responsibilities will be many, and with co owners not only will they be delegated out but, it will give all the owners more time to do other tasks that may not be business related. Since you are in a partnership your chances of getting financing may become easier. Loan opportunities are important for your business start up to be successful (Ebert & Griffin, 2009). There are several investors, programs, and banking facilities that are available to you.In conclusion, with business opportunities being countless, and the funds to start those, few, partnership is the best approach for this scenario. In order to be successful in business today funds are not the only thing one needs to possess. Having ideas, a business sense, and time management are needed as well.
Take the time to make a business plan is the first step anyone needs to make when deciding to go on a business venture. Then you will know what your total investment is, who you want to involve, where you will begin and how you will finance it all. It can mean the rise or fall of your business.