...successful business, we will discuss ownership, and funding of a business. We will look at the pros and cons of partnership as a form of ownership. We will look at accounting practices, and marketing of the business to the consumer. We will look at how technology has changed the business and marketing environment and a company’s social and environmental responsibility. Starting, Financing, and Marketing a Business A business is any activity that provides goods and services in an effort to earn a profit (Mcgowan, Kelly and; 2012) There are many aspects to a successful business, an idea for a product or service that is needed or wanted by the consumer. After the idea, comes finding a way to fund the business, develop the idea, and a good marketing and distribution plan. Good accounting practices are a must to keep track of how the business is doing. There are four major forms of business ownership. * If just one person owns the business, it is a sole proprietorship. In this form of business the owner has all the say in how the business is run, and keeps all the profit. The owner is also responsible for all debts the business incurs. * A partnership is an agreement between two or more people that act as co-owners there are several types of partnership, but in a basic partnership, owners share profits, and liabilities * A Cooperation is a business that is created to be separate from its owners. This protects owners from debts and obligations that the business incurs...
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...Financing different business Every business needs capital. 1. Sole trade. Internal – own servings, help from family, business profit. External – bank overdraft, loans, leasing, grants. Sole trade may get a mortgage over the home or any other marketable investment. 2. Partnership. Internal – other partner servings, own serving, business profit. External - overdraft, loans, leasing, grants. Partnership may get a mortgage over investment or any other marketable investment bellowing the partners. 3. Private shareholders. Internal – private shareholders funds, business profit. External – overdraft, loans, leasing. Grants, venture capital forms, factoring. 4. Public limited company. Internal – share capital, business profit. External – overdraft, leasing, public share issues, factoring. 5. Non-profit making organization. Internal – fond raising. External – donations, sponsorship, grants, national lottery. Company finance. Working capital is short term resources – stock of raw material, financing same-finished products; paying wages, paying running expenses: electricity, gas, water, advertising, business rates, insurance. Fixed assets are long-term items, owned by the business such as: land and building including the factory, the storage facilities, car park, assets routs, machinery, vehicle, office equipment. Bank organization. Banks are among the most important financial institutions. 2 main types of banks – central and commercial. Central bank...
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...Being a financial advisor to a business takes some preparation. I will need to outline the goals of my client, long term and short term and come up with the best advice I could give with regards to raising capital for the business. The main sources for raising capital are through debt and equity. “Debt financing means borrowing money from an outside source with the promise of paying back the borrowed amount, plus the agreed-upon interest, at a later date.” (Palermo, 2014) One of the advantages of debt financing is that the lender does not receive on ownership share to the business because after the debt is paid, there are no more obligations to the lender. Therefore it preserves ownership. Debt financing can be done for small or large businesses and it comes through loans from commercial banks or through organizations like the SBA (Small Business Administration) loan programs. There are disadvantages to this type of financing especially for the businesses that don’t do well and still has the obligation to pay the loan. Instead of all the profits going back into the business, part of it will have to be used to repay the loan. It does not matter if the company is doing well or not, the debt will still have to be repaid monthly or whenever it is due. “Carrying too much debt is a problem because it increases the perceived risk associated with businesses, making them unattractive to investors and thus reducing their ability to raise additional capital in the future.” (Hillstrom, n...
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...CREATING, FINANCING, AND MARKETING A BUSINESS LEONA PARKS PROFESSOR MARILYN FITZPATRICK BUSINESS 100 FEBRUARY 24, 2012 Leona Parks Professor Marilyn Fitzpatrick Business 100 February 24, 2012 Creating, Financing, and Marketing a Business Identify the pros and cons of the partnership as a form of ownership. The simplicity and flexibility in creating a partnership may be one of the main advantages of the partnership as a form of business. The other main attraction to the partnership as a form of business is partnership tax treatment. From a tax standpoint the partnership is as straightforward as the sole proprietorship. There is no tax at the partnership level. All tax consequences are passed through to the individual partners. The benefit of this pass trough tax treatment is that there is only one tax level. The negative side is that if a business is reinvesting profits into non-tax deductible expenses, the partnership may show taxable income, but have no cash. Each individual will have to pay taxes on the taxable income from the partnership reported on the individual’s tax return; even though no income is distributed to the partner from the partnership. PROS * In a general partnership, where two or more parties are co-owners, having multiple owners can make it easier to borrow additional funds because the combined credit rating is higher and the perceived risk (on the part of the lender) is lower. * Partners share duties, tasks, and responsibilities...
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...Creating, Financing, and Marketing a Business Kimberly M. Albuquerque Business 100 Strayer University 26 February 2013 Creating, Financing, and Marketing a Business When creating a business, entrepreneurs start with goals that help them create, finance and market their business. To stand up their business, they must decide what form of ownership they will use. This decision will affect the establishment and operation of their business, including financing and regulation, as well as marketing. One form of ownership commonly used in the United States is a partnership. This is where two or more people enter an agreement and become co-owners of a firm. There are limited partnerships, limited liability partnerships (LLP), and the most basic type, which is a general partnership. There are four key advantages of forming a general partnership. (1) The ability to pool financial resources likely gives a partnership a stronger financial foundation than a proprietorship because more people invest in the company. (2) The ability to share responsibility and capitalize on complementary skills. With partners sharing responsibility and tasks of running the company, the workload is lightened and they can benefit and feed off of each other’s skills and interests. (3) Ease of formation. Partnerships are relatively easy to stand up compared to corporations. The only thing required to get started is an agreement among two or more people. (4) Possible tax advantages. Partnership...
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...Creating, Financing, and Marketing a Business Creating, Financing, and Marketing a Business Heather Stalder Strayer University Justin Ndwiga Business 100(Mini) Creating, Financing, and Marketing a Business One of the easiest ways to start a business is to create a partnership; creating a partnership when forming a business has several advantages and disadvantages. A partnership starts with two or more parties having the same vision developing a business and contributing to the financial and operations of the business.“The simplicity and flexibility in creating a partnership may be one the main advantages of the partnership as a form of business. However, the disadvantages of the simplicity and flexibility must be carefully considered.” (Hanson, 1998) A risk you take in the partnership is that there is no requirement to have written agreement. Without a legal agreement it may be difficult for those in partnership to outline the parameters of the business relationship. If a thorough partnership agreement is agreed upon it can be executed to make the partnership flexible and workable for all involved and help alleviate the tensions that may arise in a business partnership situation. (Hanson, 1998) An upstart business has quite a few options when it comes to financing their vision. Depending on your financial needs the type of financing you choose will differ. Will the financing be long...
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...CREATING, FINANCING, AND MARKETING A BUSINESS Creating, Financing, and Marketing a Business William B. Smith Dr. Robert Culver Lithonia Campus BUS 100 August 19, 2012 Strayer University CREATING, FINANCING, AND MARKETING A BUSINESS Pros and Cons Individuals with the intention of starting a business of their own have several options to choose from in regards to what structure that will fit their needs. For instance, a partnership means that more than one person has ownership of the company. There are different variations of a partnership such as limited and general partnerships. One particular benefit to a business that is defined as a partnership is that the work and responsibilities be shared between whomever is involved, the work load is not left up to any one individual to take on alone. The second benefit to a partnership is that it can be formed very easily, a simple verbal agreement by itself can be all that is needed to bring it together (BUSN Textbook page 76). The worth of all involved may allow the business more resources and brings additional experience to the organization. A major con in this type of business structure is, if all the participants are not on the same page in regards to setting goals, work ethic, drive, and knowledge, conflicts of interest can set in and have turbulent affects on the business. Another stipulation is that the profits must be shared between each partner involved as per the initial agreement. Partnerships can...
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...Running head: CREATING, FINANCING, AND MARKETING A BUSINESS Creating, Financing, and Marketing a Business Strayer University Business 100 JANET LARGAESPADA February 26, 2012 Creating, Financing, and Marketing a Business In business there are several forms to consider when starting the organization, this paper will be focusing on the creation of a general partnership. A general partnership is one of the simplest forms of business to create because all it really takes is an agreement to form between two or more individuals and that is it. No complex documents to submit, no issuance of private stock, no bylaws or need for a board of directors. Its simplicity is a general partnerships' biggest assets although it is not its only one. Another big benefit to the general partnership is the pass through of tax liability. From a tax standpoint, the partnership is as straightforward as the sole proprietorship. There is no tax at the partnership level. All tax consequences are passed through to the individual partners. The benefit of this pass-through tax treatment is that there is only one level of tax. This is a pretty big difference when you look at the tax structure of a corporation, who faces multiple levels of taxation. While those are the benefits of a general partnership, there are a few downsides to the structure of a general partnership as well and those can be daunting if your choice in partners is questionable. A general partnership is subject to unlimited...
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...Online Chapter 15 LEASE FINANCING AND BUSINESS VALUATION Learning Objectives After studying this chapter, readers will be able to describe the two primary types of leases, explain how lease financing affects financial statements and taxes, conduct a basic lease analysis from the perspective of the lessee, discuss the factors that create value in lease transactions, explain in general terms how businesses are valued, and conduct a business valuation using discounted cash flow and market multiple approaches. Introduction This chapter covers two unrelated topics: lease financing and business valuation. Leasing is a substitute for debt financing and hence expands the range of financing alternatives available to businesses (and to individuals). However, leasing should be used only when it offers some advantage over conventional financing. We begin this chapter by discussing factors that contribute to the large amount of leasing activity among healthcare businesses and how businesses analyze lease transactions. The valuation of entire businesses, as opposed to capital projects, is a critical step in the merger and acquisition process. In addition, business valuation plays an important role when one owner is bought out by other owners and when businesses are inherited. The second part of this chapter discusses two techniques used to value businesses. Leasing Basics Businesses generally own fixed assets, but it is the use of buildings and equipment that is important, not their...
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...Business Financing and the Capital Structure Tamika Coleman Professor Rollinson Edewor Finance 100 June 9, 2015 Introduction Business operations originate from the inculcation of plausible approaches towards ensuring sustainable operations within the first year of operations. Thus, from the analysis of many businesses, investment into proper financial plan and effective marketing strategy is bound to sustain profitable outcomes. Therefore, this paper will examine financial planning, marketing and the plausible approach towards expansion of business. Outline a financial plan for your small business. Most fundamentally, a financial plan denotes two main facets of analysis that entail an analysis of the financial goals and review of the financial statements. As a new business, One Stop Shop Swim store aims towards meeting the customer needs of the market of operation. Hence, an evaluation of the financial plan is as follows: Financial goals Financial goals focus towards laying forth the targets or operational milestones that need to be met by One Stop Shop Swim store. Thus, the evident financial goals are as follows: * Sustain a 7% growth in sales within the first six months of operation * Ensure that a second store is opened after a year of operation * Make a more than 30% of the initial capital within the first year of operation Review of financial statements Terence (2003 p90-178) emphasizes that in US, there prevails two main financial statements...
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...Business Financing and the Capital Structure Joelann Rousell Principles of Finance May 31, 2015 Financial planning involves decisions related to finance, financial requirements of the company. Financial manager has to determine the needs of the funds and available sources for those funds. Financial planning is deciding in advance the funds required for future actions. There are several steps involved in the process of financial planning. These steps are described as follows:- 1. Estimation of fund requirement:-Amount of capital required is determined at this step and in determining the capital need projected statement has to be drawn. Capital is of fixed and fluctuating nature and we need both fixed as well as fluctuating capital to run business. Fixed capital is required for fixed assets, investment in intangible assets and fluctuating capital is required to maintain stock and inventory of the company which is required to carry on operating activities. 2. Determining the sources of funds available:-To finance the above requirement what sources are available with the company has to be determined. Various sources are available like bank loans, raising money through shares, securities, or debt and equity. 3. Choosing the best source of finance:-There are various sources available to the company but according the paying capacity and nature of the company we have to choose the available source. 4. Forecasting the availability of funds or company’s earning capacity:-Next...
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...Creating, Financing, and Marketing a Business A Business Partnership is usually hatched in a state of inspired optimism when two or more seemingly like-minded individuals come together with an idea to create a product or service and develop it into a business. As with anything, a business partnership has it’s pros and cons but there are also two types of partnerships, General and Limited. A General Partnership is subject to partnership agreement; all partners have equal rights in the management of the partnership. The Pros of General is that the partnership may designate particular partners with particular skills to make decisions in that area and reserve the more important decisions to the partnership as a whole. Cons to consider is that each partner has rights in management and may contractually bind the partnership. Each partner is responsible for the contracts that the other partners execute and the liabilities that they incur. The possibility of disagreement and deadlock exists. The other partnership is Limited. In a Limited Partnership at least one general partner is responsible for the management of the partnership. A limited partner may not participate in the management of the business or the limited partner runs the risk of becoming personally liable for the debts and obligations of the limited partnership. Pros to this partnership include that a general partner may vote on matters related to the business of the partnership provided such matters are...
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...Creating, Financing, and Marketing a Business Ibadan Mack Prof. Felicia Walters BUS 100 May 30, 2013 In any business, there will come a time when changing the form of ownership has to be considered. There are several different types of ownership options, but the one that seems to be most advantageous to most is a partnership. According to Wilkipedia.com (2011), the definition of a partnership is an arrangement where parties agree to cooperate to advance their mutual interests. Partnerships exist within, and across, sectors. Non Profit, religious as well as political organizations may partner together to increase the likelihood of each achieving their mission and to amplify their reach. (p.1) Although partnerships may sound intriguing and advantageous, as with any ownership form, there are pros and cons which must be weighed and evaluated. According to allbusiness.com (n.d.), general partnerships have many benefits, but perhaps the most compelling is the ease with which they can be set up and maintained. You do not have to register with your state and pay fees, as you do to establish a corporation or limited liability company (LLC). Because a general partnership is normally a "pass through" tax entity -- meaning the partners, and not the partnership, are taxed -- filing income tax returns is relatively easy. Unlike a regular corporation, there is no need to file separate tax returns for the corporate entity and its owners. Partnerships are also considered a discrete...
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...Creating, Financing, and Marketing a Business BUS 100 Creating, Financing, and Marketing a Business A Business Partnership is usually hatched in a state of inspired optimism when two or more seemingly like-minded individuals come together with an idea to create a product or service and develop it into a business. As with anything, a business partnership has it’s pros and cons but there are also two types of partnerships, General and Limited. A General Partnership is subject to partnership agreement; all partners have equal rights in the management of the partnership. The Pros of General is that the partnership may designate particular partners with particular skills to make decisions in that area and reserve the more important decisions to the partnership as a whole. Cons to consider is that each partner has rights in management and may contractually bind the partnership. Each partner is responsible for the contracts that the other partners execute and the liabilities that they incur. The possibility of disagreement and deadlock exists. The other partnership is Limited. In a Limited Partnership at least one general partner is responsible for the management of the partnership. A limited partner may not participate in the management of the business or the limited partner runs the risk of becoming personally liable for the debts and obligations of the limited partnership. Pros to this partnership include that a general partner may vote on matters related to the...
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...Assignment 2 - Creating, Financing, and Marketing a Business Carol Brandon Professor Mark McMullen Bus 100 - Introduction to Business Strayer University May 25, 2012 Creating, Financing, and Marketing a Business Carol Brandon Entering into a written agreement is one way to form a partnership; a partnership may be formed through the actions of the partners as they operate the business together. Even if individuals have an agreement that says "we are not a partnership," the law may find that there is a partnership and hold one or more partners liable for some business-related obligation. The simplicity and flexibility in creating a partnership may be one of the main advantages of the partnership as a form of business. However, the disadvantages of simplicity and flexibility must be carefully considered. Although an agreement is not required, without a written agreement, partners cannot determine their rights, duties, obligations, and liabilities, except for what is covered by state law. This is not normally enough, since the law on partnerships is not detailed. This allows partners a great deal of flexibility to structure the business as they would like it. But it leaves many questions unanswered if there is not an adequate written agreement setting out the details. The other main attraction to the partnership as a form of business is partnership tax treatment. From a tax standpoint, the partnership is as straightforward as the sole proprietorship. There is no tax...
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