Business Course Paper Assignment
Abstract
Recommendations for the business, based on innovations, have been provided in this paper. The recommendations have been related to the whole cycle of business existence – from its establishment to closure. It has been proven that partnership is the most optimal business model to balance contributions and expectations of several owners of the business. Also, it has been considered that pricing strategy for business, based on innovations, must be stable. Finally, the author has proven that bankruptcy is not the best way to finish unsuccessful business.
Course Paper Assignment
Introduction
The client under consideration is called Paul Peters. He is an inventor and has a range of inventions that might bring him significant profits in the future. However, these inventions require significant initial investments. That is why he is going to use money of his cousin Sara Sanders and business skills of his friend Ronald Robinson. These three persons have decided to create a business and invest in Paul’s inventions. The task of the report is to propose Paul the most optimal business model for him.
After creation of the business, according to the proposed business model, Paul faced challenges in a pricing strategy. He decides to lower the prices for the products as much as possible for the purpose of getting rid off all the other competitors. The following step would be to increase prices significantly in order to get tremendous profits.
After ten years of performance Paul decides to leave the business, which has significant debts. The final task is to advise Paul what step to take to dissolve the business and whether bankruptcy is a good way to avoid paying off all the debts.
The Optimal Business Model
First of all, a legal form of a business must be proposed to Paul. Three persons are going to invest their own resources in the business. Paul will invest ideas, Ronald will invest business skills and Sara will invest money. That is why the most optimal legal form of business will be partnership. Partnership is going to balance effectively each partner’s contribution into the business and expectations from it. Contribution of each partner in a common business will be evaluated. They will have a right to vote and influence on the business, according to the values of contributions. They also must sign a partnership agreement in order to rule all the business questions and avoid potential misunderstanding in the future.
Partnership as a form of business has a lot of significant advantages. Among them the following ones may be pointed out: flexibility in management and making decisions, shared responsibility of the owners and higher possibilities to raise a capital (Advantages and Disadvantages of Partnership).
However, Paul will be forced to share power and influence in his company. If he is not ready to do it, he should look for some other business forms, for example, Joint Stock Company. Paul’s company may issue stocks, which will be bought by Sara, but not the control amount. It will allow Paul rising required …
