Assignment my business Essay
When I open my business, I will establish it as a partnership. For this reason, I know that I have to completely trust my partner. Before I set up the business, I will insist that we run mutual credit checks and background checks on each other so that there are no surprises. There are advantages to establishing a corporation, such as limited liability, but the two main disadvantages are the increased tax liability and difficulty in setting up the business (Choosing the limited liability company as your corporate form, 1999). Therefore, it would be more advantageous to set up a partnership, even though I know that my partner and I will be legally and financially liable.
Once my partner and I have established our business and our product, we will need to decide what forms of payment we will accept. Not only do we need to provide convenience for the customer, but we need to keep in mind which forms of payment are less expensive to accept. These forms will differ between our storefront and our website. On the website, we will accept credit cards, checks, and Pay Pal. Accepting credit cards is a must; 76% of Americans have
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At the storefront, we will accept credit/debit cards, checks and cash. The disadvantage to accepting checks is that there is a chance the check can bounce before it is deposited. We can try this payment method to start, and if we find that dishonored checks are a problem, we can reconsider whether or not to continue accepting it as a form of payment. The benefit to accepting cash is that there is no need to worry if the money is good. There are two distinct disadvantages. The first is the danger of being robbed; if we are selling high-end items, we will necessarily be accepting large amounts of cash. We will need to train our employees in what to do if they are robbed. Second, we will need to establish a routine of depositing the money, whether we have it picked up by a service such as Brinks, or if we transport it to the bank ourselves. Transporting the cash to the bank also leaves open the danger of being robbed.
The advantage of having a storefront is that customers will be able to see and evaluate the product in person. However, we will need to weigh the importance of having the store in a safe, visible area with having an affordable and reasonable rent, and our customer base will be limited to the areas in which we can afford to set up shop. Doing business online will allow us to attract customers worldwide, though the main concern is making sure that the payments come through. We should offer slightly different products online and in the store, so that customers will have a reason to shop in both places.
In order to succeed in business, my partner and I will need to create a solid financial plan (Liraz, 2001). We will need to do this in order to stay within a budget. Because we will have a partnership, it is important to ensure that we have enough money to live on, in addition to working capital for the business. The Small Business Association recommends finding a mentor, someone who can anticipate the problems and opportunities that we might not be aware of. The site gives links to websites where experienced mentors can be found (Small business planner, 2006). The most important thing for us to do is to go into a business that we love. We need to sell a product that we care about, or run the business in such a way that my partner and I want to go to work every day, and we are constantly thinking up new ways to attract and serve customers.
(1999 Oct). Choosing the limited liability company as your corporate form. Retrieved December 13, 2006, from INC.com Web site: http://www.inc.com/articles/1999/10/14218.html
(2006). Credit Card Industry. Retrieved December 13, 2006, from Credit Cards.com Web site: http://creditcards.com/statistics/statistics.php
Liraz, M. (2001, July). How to Nine Tips for Small Business Success. T&D, 55, 19.
(2006). Small business planner. Retrieved December 13, 2006, from Small Business Association Web site: http://www.sba.gov/smallbusinessplanner/start/findamentor/index.html