I hope you have all had a relaxing holiday so far and are enjoying the sunshine!I promised you a mini-project for the half term so here it is and I am very excited about what I will see upon our return from half term!
Entrepreneurs when starting out have a lot of different things to decide. What sort of product/service will the provide? How will they fund their business start-up? Where is the gap in the market? How might they segment the market? What will be their USP?
But one of the fundamental questions all businesses need to ask is what kind of business ownership will they choose?
There are 5 main types I want you to be thinking about and these are below:
- Sole Trader
- Partnership
- Franchise
- Private Limited Company (Ltd or LLC in Dubai)
- Public Limited Company (PLC)
The fact is that when starting out most business will not be looking to become a PLC because this involves listing themselves on the stock exchange. Something that Facebook has only done recently to great success (To them if not their new shareholders so much losing 50% of the share value...).
This in mind I want you to Identify which business ownership the below Entrepreneur should go for and Explain the benefits and drawbacks of this approach. You then need to Justify why this is the right option considering her other options.
Dr. Sheena Raja is a first year doctor who is newly qualified and starting her journey towards being a GP. Having seen the price of various beauty therapies in the UK she has seen that there is a lot of money to be made, something she is not adverse to getting involved with! Having looked into what she can offer as a qualified GP she has settled on the idea of providing "Laser Skin Treatments." This is a very exclusive part of the marketplace which is offered by a fair number of providers and example of which is here.
The gap that she has spotted is that not many qualified GP's are providing this service and if she can offer it she has a clear competitive advantage to the high-street businesses in that most people prefer to have a qualified doctor administer their treatments compared to a beautician. Wouldn't you?
Anyway, she knows what qualifications she will need and where to purchase the equipment plus all the costings involved. Her only issue is she knows very little about business ownership and the potential pitfall of choosing the wrong option. She is also keen to minimize risk and still see a good amount of return on the money she has saved and plans to borrow to start up the business. Can you help her out and give her the advice she needs?
Write out your response in a word document making sure you are not lifting information from websites and attributing and sources you have used.
Mr Oates, where is the question and answer mock test?
ReplyDeleteHi Sher Khan, This is on Fronter and we will do this in class on Sunday. Make sure you have revised!
ReplyDeleteThanks for the help
ReplyDeleteI'm sorry but there is no way my business teacher is wearing a borderlands shirt. :o
ReplyDeleteI think Dr. Sheena Raja would benefit from a partnership, as she would be granted shared responsibilities to minimize her risk. This would help if, for example, too few customers existed to provide income for a job in laser skin treatments. Her partner could provide some funds for the job, and support her should she fall on her knees. A partner would also provide assistance in the means of advice: she would most likely find a business person to be a partner, It also has a double way advantage in that, as she is a qualified doctor, she would attract more customers compared to other high street businesses (as you said) by advertising the fact that she is a qualified GP. Another benefit of partnering would be an initial increase in fund from the two parties, on top of any thrd party suppliers (bank loans, product deals, etc.), which could help start the business up and ensure its wellbeing.
ReplyDeleteBy Matthew Appleton
Hi Matthew
DeleteWhat about the issue of Unlimited Liability? What are the drawbacks of your proposal?
This would give you a more balanced argument. I like your answer so far!
In my opinion, Dr. Sheena Raja should look to gain help from either other businesses or a heavy business figure to help the fact that she knows little about business ownership. Having business partners means that businesses can help each-other in many forms, such as giving advice, paying debts, sharing responsibilities and giving fair loans. A problem with this would be unlimited liability, in that if a company is unable to pay off a debt, personal assets may have to be used instead.
ReplyDeleteDr. Sheena Raja may however be better off as a sole trader. Although still effected by unlimited liability, there are some advantages of being a sole trader. For example, there is freedom in the business, Dr. Sheena Raja could run the business how she wanted to run it, without having to check if it's OK with the other companies. Also, she would get a lot more of the profit, not have to share it out and be able to choose the employee salaries more specifically.
In Conclusion, i believe that Dr. Sheena Raja would benefit more from having a business partnership in order to help push through struggles that she will probably have and to gain support for her company when it comes to debt, and knowledge on business ownership.
-Josh Knight
I think dr should be in a partnership because GP rates and business can be quite expensive, in partnetship they can all chip in nd give a bit of money each. Another advantage of a partner ship would be the work being spread out accross the people. Opening a business can be a very stressfull and time demanding option of a job, Which means a partner ship would help you and guide you as everyone would implement a different aspect of a business, It would being fresh ideas to the table and may cause the business to be more succesfull. The disadvantages of having a partnership would be the spread out profits, You would only get a percentage.A partner would also help in the means of assistance;she would most likely find a person whos' good at business to be a partner,she is a qualified doctor, she would attract more customers compared to other Local busness's by advertising that she is a qualified GP.
ReplyDelete