Advice on Opening a Brick and Mortar Business: Limited Capital & Time - Essay Sample

Introduction

There is an expressed interest in opening a brick and motor business. The factors to be put into consideration is that two parties are interested in the business idea with one not wishing to be its owner and the other not feeling like spending a lot of time in the business. Further, the source of available capital is limited with only one party being the likely contributor. This memo seeks to give advice on the best way to proceed given the current dynamics in order to ensure that the business is a success. The memo specifically addresses the issues of the preferable form of business, capital, marketing strategies and motivation amongst others.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

Analysis and Recommendations

Ten main factors that are likely to have a bearing on the success of the business are elaborated as below:

Whether an Entrepreneur or a Small Business Owner

Entrepreneurs are attracted to risk taking, they go for loans and other outside funding's are more visionary in that they look at the potential of the business in the next many years and are more innovative. On the other hand, business owners often use their own money in the business; often think of the now and not the future of the business and often shy away from innovation as they stick with what they already know will work

From the forgoing parameters, Carlos best fit as a business owner given that he is likely to invest his severance package of $ 50,000 in the business and not takes out a loan; he has no long term plans for the business and is not keen on using any innovative technology to advance his business.

How to Decide How Much Capital Is Needed to Start a Business

To determine how much capital is needed especially given that it would be a brick and mortar business, a budget needs to be drawn(Faust &Junginger, 2016), the budget will factor in recurring expenses such as premise lease, electricity, taxes and salaries in case the business plans on employing people to run it. Also, given that the business intends to sell physical goods, then estimates of acquiring the goods must be considered and an amount set aside for unforeseen happenings

From the above, the business will then be able to estimate the amount of money that would be needed to operationalize it

If in Need of Financing, What Financial Statements Will Be Needed

In the event that the business would be looking for financing, it would be required to have three important financial statements even if it is a startup. These three financial statements are; a balance sheet, a cash flow statement and an income statement that is mainly made of profit and loss account

The Best Form of Business to Set Up and the Reasons

The best form of business to set up in this case scenario is a Sole proprietorship, this is because amongst others reasons, a sole proprietorship is the easiest and relatively inexpensive form of business that one can start, the proprietor get all the profit plus make all the decisions concerning the business all alone.

Given that the available capital is limited, it would be prudent not to use a lot of it in formation process of the business and given the passion that Carlos has triathlons is one of the main reason for the stating of the business, then him as the proprietor is the only one likely to make prudent decisions regarding the business and as a result solely be the one to enjoy the profits making sole proprietorship the best form of business

Reasons Why Other Business Forms Will Not Work Well

The other forms of business are partnership and corporation. The reason why partnership will not work is because partnership is made up of two or more owners of the business(Sale & Jones, 2018). However Carlo's brother, Julio despite being interested in the business does not desire to be an owner. Therefore lack of a partner will make the partnership form of business not work

While Corporation is not ideal due to the costs and legal formalities associated with forming it as well as the running cost. These include among others, the need for Annual General Meetings, tax returns and duties to shareholders.

Role of Julio and Whether It Effects the Form of Business to Be Set

The role of Julio may be limited to that of an employee and will therefore have no effect on the form of business to be set given that the business would take the form of a sole proprietorship

Specific Form of Marketing the Business Should Pursue

The business should pursue three main forms of marking as those are the ones likely to work. These three forms of marketing are advertisement, word of mouth and relationship marketing.

While advertising, the business can use both paid traditional form of marketing or online marketing to reach potential customers(Jovicevic&Ivanovic, 2014) that are not with their (Carlos and Julio) reach. Relationship marketing which involves leveraging on existing relationship and building customer loyalty and word of mouth comes in handy given that the potential customers of the sport equipment are made up of the people they train with.

Whether to Hire Help and in Which Position

With Julio not interested in business ownership, there is no need for hiring help as the two can effectively run the store with Julio being treated as an employee

If Help Is Hired, Who Is to Manage Them

Carlos as the sole proprietor is the one to manage everything to do with the business including the hired workers as the buck stops with him. He is the sole decision maker and the one to bear the brunt in terms of losses or the success in terms of profit as a result of the decisions made

Best Way to Motivate Employees if Hired

The two best ways to motivate employees if hired would be to reward them whenever they perform their duties well (Jovicevic&Ivanovic, 2014)and also to offer them opportunity for advancement within the business(Sale & Jones, 2018). Opportunity for advancement could be in form of promotion to a more senior role and more responsibility on the business

References

Faust, J., &Junginger, S. (2016). An introduction to designing business. Designing: Business and Management. https://doi.org/10.5040/9781474243551.0006

https://courses.lumenlearning.com/wm-introductiontobusiness/chapter/sole proprietorships/Sole Proprietorship

https://courses.lumenlearning.com/wm-introductiontobusiness/chapter/common-marketing-communication-methods/Common Marketing Communication Methods

https://courses.lumenlearning.com/wm-introductiontobusiness/chapter/introduction-to-strategies-for-motivating-employees/Motivation in Today's Workplace

https://courses.lumenlearning.com/wm-introductiontobusiness/chapter/why-it-matters-managing-processes/Why It Matters: Managing Processes

Jovicevic, R., &Ivanovic, V. (2014). Relationship marketing as an effective strategy guidelines and a guarantee of success in the business of a modern company. MEST Journal, 2(1), 125-132. https://doi.org/10.12709/mest.02.02.01.13

Sale, J., & Jones, S. (2018). Motivation and finding the employee voice. Mapping Motivation for Engagement, 65-81. https://doi.org/10.4324/9781351257084-6

Supplemental material for reward strengthens action-effect binding. (2019). Motivation Science. https://doi.org/10.1037/mot0000153.supp(2019). Journal of Small Business Management, 57(1). https://doi.org/10.1111/jsbm.v57.1