Saturday, 10 November 2012
Half term project
Dr Sheena Raja will benefit the most from a partnership. Due to her minimal knowledge of the world of enterprise, it would be appropriate if she got consultancy from another individual, involved directly in the business, that would lead her in the right direction because he/she owns a certain percentage of the company and wants to thrive. Together, they can share their expertise and help their business excel. Another pro of choosing a partnership would be that the risk would be reduced, as it will be shared out between the two owners. However, she should be very vigilant towards choosing a partner and making sure he/she has the right marketing, entrepreneurial attributes required for the role. It would also be a plus point if the partner is good with financial management. Her partner should also be cautioned not to involve himself/herself in the technical side, which Dr Raja should manage, and stick to maintaining and expanding the business. She should promote keeping a transparent business model to her partner so they are aware of all aspects of their business and none of them are kept in the dark. Communicating is also a key factor in this business ownership. Being involved in a partnership means you don’t have to invest as much as she planned, as her partner would also invest a reasonable amount in the business. Therefore, she is less financially burdened and can also hope to see a good return on her money.
Subscribe to:
Post Comments (Atom)
This comment has been removed by the author.
ReplyDeleteThis is a really good answer where you have thought through clearly the advantage of a partnership in this situation! However, you need to consider the idea of unlimited/limited liability. Which would this partnership have and how will this be an advantage/disadvantage. Also a drawback overlooked is partnership means equal share of profits so how do you make sure there is equal time invested, and if one is sick you have to do their work. You cover this but fail to give a final opinion. Justify why this is a good plan compared to the alternatives. Nowhere do you discuss other possible ownership models and write them off compared to your own idea. This is also an advantage compared to a sole trader because in that ownership if you are ill no-one works and you do not get paid!
ReplyDeleteThis partnership would have limited liability otherwise there would be danger of their personal assets being dissolved with the business. All partnerships have limited liability, which is obviously an advantage. The partners will surely have some days where they cannot attend work or meet deadlines, which will ultimately effect the revenue of the company...and so they receive a deficit in their share of profit based upon the impact caused by their absence/fault.
ReplyDeleteThis is a good plan compared to the alternatives as you have a wider range of skills present on the table, rather than Dr Raja managing the entire business by herself, only having knowledge about the technical side. A partnership is more rewarding than a franchise because in a franchise, she is unable to alter the theme and prices e.t.c, therefore she is very restricted and has no identity of her own. Owning her own business allows her to excel and have her own brand proposition. And yes, Mr Oates, your point comparing a partnership to a sole trader is very good!
Hi Moosa, check again about whether partnerships have limited or unlimited liability. If you find evidence either way bring it to me to prove your point of view.
ReplyDeleteA partnership can decide if they wish to open a limited or unlimited liability company, however I advise Dr. Raja to go along with limited liability so her personal assets don't sink with the business. It is best for her as it is her first time opening a business therefore she should play it safe.
ReplyDeleteVery good Moosa! You have considered the facts and adjusted your answer. For the exam they will expect you to know only about unlimited liability partnerships so next time you will need to make it clear you are talking about this. For the purpose of Unit 1 all partnerships have unlimited liability (even if this is factually incorrect e.g. John Lewis).
ReplyDelete