A partnership as a form of ownership is formed quite simply. When two or more people get together and come to an agreement on what type of business to take part in, then all parties share investment, profit, and of course loss. Let’s discuss the pros and cons ofa partnership. Pros, one of the many things all investors would like to see out weight the cons in anything they are engaged in mentally, physically, and of course financially. First of all, one pro would be how easy it is to create a partnership.
You simply get with at least one other person come to an agreement over all the business details, and “BAM” you have a partnership. Some people are comfortable in erbal agreements but I personally would suggest you get all your partnership details on a written legal document Just in case. Funding is another advantage toa partnership. When two or more people come together to form a business partnership money is invested from all parties involved in turn the business has a stronger financial backing to support it.
Not only will the business have a strong financial backing all partners invested may have access to outside money to support the business even further along. One of the best advantages in being in a business partnership is shared responsibility. Shared responsibility is crucial in a successful business and of course partnership. When the business starts to get a bit heavy you can hand it to your partner or partners to carry the work load for a while. You can also look to your partners for moral support when you may think things aren’t going as stated in your business plan.
So far we have heard the pros ofa business partnership but like every bandage that fixes that painful spot you eventually have to pull it off. Cons, the opposite of Pro, the many things that all business investors need to know before investing but never want to hear. You may be thinking since it was a breeze to create this business partnership the rest will come as a breeze. You could your mind; everyone who is a partner is liable for all debts. You and your partners are all Jointly or individually liable for all debts accumulated by the business.
For example, let’s say your partner or partners are taking the profits the business is making and gambling with it. Your partners blow away all the profits on poker games and skip town what then, that’s right you are still liable for any debt accumulated by the business. Another obvious con is your business partners will want to share the rofits made by the business. You can’t assume when the business makes profit everyone will agree on saving it. Your partner or partners may want to buy cars, houses, or maybe boats. You don’t have total control of the business.
Business decisions are made Jointly not on your own. You may run into disagreements that in turn create the other partner to leave the business, or even lead to buying out the other partner. Pros and cons are a great way to see if you’re the, “partner type”, if so make sure you pick the right partner or partners for your business. There are many ther factors in owning and running a business. For example, in order to get your business off the ground you have to find the money to do so. Debt financing is one way you can start up your business.
Debt financing is simply going to a bank that knows you have good credit, a good standing history with them, and apply for a small business loan. In the current economy most banks can be very hesitant to offer you the loan so another way is equity. Selling a share of your business meaning you aren’t solely in charge or will now be sharing the profits may be scary, but it can help you start up your business. After starting up your business you now have to manage the business or appoint someone for the Job. Managing the accounting is a great way to stay on top of product cost, and budgeting.
Managerial accounting is detailed data used for inside members of a company. Managerial accounting includes things like cost of the product, cost of shipping, cost of employee benefits, cost of turnover, basically every number available to you and your partners. You can determine if you have the budget to raise wages for your employees to boost employee morale. Each business owner can use the data to do their Job better. You can go to your losses data and determine if your employees are stealing from you. Then determine how much more security you will need in order to prevent product loss.
If you or your manager for your business needs to determine if their product was set at the right price they could view the sales data to see if the supply met the demand. If you see that one of your items hasn’t been selling very well you can set it at a lower price or you can Just order less of such product. If you see you sold a lot of a particular product you can raise the price as you see fit. You now know if you are the partner ype, you know a couple ways to possibly fund your business, and you know how to manage your data and budget. How are you going to get costumers through your door or buying your product?
How will you market yourself? Let’s use my dream business as an example. I would like to open up a cafe lounge that serves fair trade coffee, craft beer, and fine wines. In order for me to make any kind of better profit for my business I have to market my business. You have to give the people what they want in my case I would produce amazing cups of coffee. My business would offer a coffee with better taste, and appeal. My coffee would be made with love and not thrown at you in the pickup line simultaneously saying, “NEXT”. My cafe lounge would major downtown street.
Location is important for my cafe lounge so doing a little research of the area by visiting throughout all times of the day to see the amount of traffic the area receives is crucial. Then maybe you can ask around the nearby stores to see if customers purchase a lot of coffee. You can even go to the nearest coffee shop and see what coffee and vibe they offer and simply ask the locals what kind of coffee they like or would like to drink in what kind of atmosphere. After finding your target market, a great location, building your business, affordable product pricing, and setting your hours of operation it is time to promote your business.
You can put ads in the local newspaper, ads in local magazines, and maybe even do a commercial broadcast in the tri county area. You will have to set your product apart from all the other competitors. For me coffee is all about personality, process, and taste. In order to retain customers your employees have to be personable, professional, and building customer relationships. Then there’s process, customers will see you make heir drink every step of the way making it an enjoyable experience.
Lastly is taste, my employees being highly trained baristas will make you a drink to your satisfaction in a timely fashion all the while maintaining a welcoming atmosphere for my cafe lounge. Having the best tasting coffee and vibe may do Justice but for long term business it may not be enough this is when you bring in the events. Doing special events with your business such as charities, open mic nights, acoustic Jam sessions, and book clubs is a great way to attract more customers and maintain current ones. Internet is your best friend. Creating a website for your business is an amazing marketing play.
It allows your customers to have 2417 access to information, and product choices. You can post updates on new product arrivals, special events, and specific information for each product you offer. The best part about having a website is they can look you up anywhere in the world that offers internet. Another great marketing strategy is purchasing ad space on other websites like a grocery franchise or sports sites. Green marketing is another great way to market your business. Customers love knowing your business is eco friendly by recycling, or using recycled aterial.
By simply pushing customers to buy coffee to drink in house rather than take away conserves paper cups in turn less garbage. If customers choose to take to go anyways inform the customers all your paper products are recycled and recyclable. Offering organic treats to eat along with their coffee can promote a green business as well. In the end knowing everything there is to build, manage, and market your business your goal is to have long term profitability. You want to exceed customer satisfaction, you want to blow away the competition, and be prepared for even harder competition in the future.
Cite this essay
Assignment on Buisness Plan. (2018, Oct 29). Retrieved from https://studymoose.com/assignment-on-buisness-plan-essay