Chapter 8, Problem 1AA

To determine

To ascertain the planning for starting a new business, such as pet grooming or a clothing store that will help in well structured and running of business by using all the following terms like entrepreneur, corporation, partnership , startup, unlimited liability, limited partnership, joint venture, stock, articles of corporation, franchise.

Explanation of Solution

Let assume decision taken for pet grooming business. Some of the strategies that can be taken with the help of the following terms are as follows.

As an entrepreneur who knows better to handle risk. Will definitely will make plan for the cost that can occur, arrange for the location to be made for running business , electricity, and other equipments that may be needed will be needed to arrange.

Corporations provide their owners also known as shareholders with limited liability insurance. Incorporating a new company will help to build credibility with potential clients, staff, vendors and partners.

Partnership having a business partner would allow the financial burden to be shared for the costs and capital expenditures necessary to operate the company. That could lead to more significant savings than going it alone.

A startup is a company which is in its initial stage of operation. A startup is mostly funded by its investors before the company gets off the ground. And the startup is drawing funding from outside. There are several different avenues in which companies can be financed through government and various organizations.

Unlimited liability is one of the important factor that need to noted very carefully. Owners are personally have to bear all business' debts in a partnership or sole proprietorship. Owners are also liable for any unlawful acts that the owners or even the employees commit.

A start-up strategy or planning is important, sole ownership gives pleasure to do as desired, but limited partnership would work best for pet domestication because of its various benefit. As the limited partnership only contributes funds to the company they, the limited partnership has no say in management.

The advantages of a joint venture is that it encourage the business growing speedy, rises in productivity and generate more profit. Joint venture benefits include access to new markets, and networks for distribution and raising capacity.

Stocks are valuable to a company because they can help the business earn a lot of capital quickly; increase the company's credibility with the public.

Articles of corporation is vital because the company is based within state of own. The incorporation papers notify the state of key aspects of the company.

Basically many entrepreneurs turn to franchising because it helps them to grow without the risk of debt or equity costs. Firstly, because the franchisee provides all the capital needed to open and run a company, it also enables businesses to expand using other people's resources.

Economics Concept Introduction

Introduction: Starting any kind of company is difficult as several factors need to be considered as risk factors, specific production factors, learning techniques that are available in various outlets such as the online searching, sources of funding, etc.