Running Head: THE LEGAL, SOCIAL, AND ECONOMICAL ENVIROMENTS OF A SOLE PROPRITERSHIP OF A MODERN COFFEE HOUSE
The Legal, Social, and Economical Environments of Running and Operating a Modern Day Coffee House as the Sole Proprietor. Let’s Have A Cup or Glass of Iced Coffee.
Abstract In this paper I will be describing the basic Legal, Social, and Economical Environments in owning and operating a modern Coffee House as a Sole Proprietor. I will describe in depth my options and decisions for obtaining the funds to start the company. I will then be describing the Legal aspects, the Social Environments involved, and the Economic Environments and all the decisions to be made as I plan a clear path to owning and operating a modern day Coffee House.
Including how I plan to keep it up to date with the latest technologies. Better get a cup of Joe this might be a long read? It’s exciting times as I begin to research and explore the many options open to me as I begin to decide and create my plan of action for owning and operating a Coffee Shop as a sole proprietor. My first visit is to the SBA Direct Loan Services, as I have chosen this for my funding.
The SBA has several loan packages for the small business owner. I will be applying in several different categories, as they have the Export Express Loan Program, (AIU Online Web Resources, http://www.sba.gov). At the SBA Web Site they have the Export Express Program, this program can be described as fast and easy as they have everything set up for the new business owner. In their first paragraph they let you know right up front that the SBA can make a difference in your company’s plans. “Small business exporters are taking advantage of the world market and selling billions of dollars of goods and services overseas every year. In fact, 70% of all exporters have fewer than 20 employees. If you are one of these businesses, or would like to join in this growing trend, and you think you are too small to receive government sponsored export financing, think again!”
(http://www.sba.gov/sbadirect/32796/article/4012/Growing/Thinking%20About%20Star/Writing%20a%20Business%20Plan/Business%20Law%20amp%3B%20Regulations/Finding%20a%20Mentor%20or%20Counselor/#Export Express Program)
Now as this is a research paper and I have not actually filled out any of the forms that the SBA offers - they do claim that anyone interested in starting their own company can have a clear understanding of their choice of financing and securing the loans in less than 36 hours. They have so many options, they even offer counseling and training and they provide the much needed information on the business laws and regulations, one could spend hours on their web site. (AIU Online Web Resources, http://www.sba.gov/). I will also be researching and applying for financing through The 2009 Stimulus Plan, as many not know it – but the Federal Government is still giving out loans for any variety of reasons - and the do it like crazy!
(http://www.recovery.gov/Opportunities/Pages/Loans.aspx)
So with the funding out of the way let’s get started with a proper APA Style Research Paper on the different operations of the Legal, Social, and Economical aspects of owning a small business.
THE LEGAL, SOCIAL, AND ECONOMICAL ENVIROMENTS OF MY COMPANY
The Legal Environment
The focus on issues affecting business professionals, including, but not limited to, accountants, and the legal environment for my sole proprietorship of a modern Coffee Shop is quite easy to describe – and I will explain why I like to keep it simple, while many in this area of new businesses get lost. As a new business owner I will need to determine what type of legal entity the business is going to be. As mentioned before my choice is simple as a Sole Proprietor. As I have chosen this organization for my company and want to run things myself. What I have done is made it easy to determine that I will be personally responsible for its debts and obligations. Unlike other Corporations, Limited Liability Companies, and Limited Liability Partnerships, etc., that can find themselves caught in obligations they did not personally guaranteed. The form of entity as a Sole Proprietor will also determine how my earnings will be taxed. While keeping it simple like this and applying for the appropriate food license, and other required local and county permits. By keeping it simple once again, I believe I have avoided what giant corporations are finding themselves being newly taxed for - first at the entry level, and then its owners are taxed again on any dividends that are distributed. Also I believe any income from S Corporations, Limited Liability Companies, and Limited Liability Partnerships are not subject to corporate income tax, and are generally taxed to their owners, much the same as with partnerships. Tax issues permeate every aspect of a business. There are income, employment, and often sales tax issues that need to be considered. In most states, business owners and those in control of finances of the business are personally liable for all unpaid taxes, whether income, sales, or employment. Proper tax planning on a regular basis is necessary in order to assure proper deposits from employment and income taxes at both the federal and state levels. Keeping it simple by applying for the local, and county tax permits, I should steer free of any troubles and be sipping an Iced Coffee with the local Health Inspector marveling at my new brilliant Coffee House.
(AIU Online Web Resources, http://www.pearsonhighered.com/educator/academic/product/0,,0131441582-IS,00%2ben-USS_01DBC.html#resources)
(AIU Online Resources, The Business Essentials 5/e, http://wps.prenhall.com/bp_ebert_be_5/)
The Social Environment There are traditional theories in the Social Environments of owning and operating a small business. These are usually based on material gain, or capital. By keeping it simple and being a big believer in the free market I will promote my company with the latest technologies in advanced research of the greatest Coffee’s being sold to date. I plan on having the latest machinery needed to match, and comfortably compete with the giant corporation like Starbucks.
I also will be incorporating the latest web advertising techniques like the massive volunteerism of online socio–technical collaborations of sites like “Twitter” and “Facebook”. Word of mouth advertising will be the key for my company as I plan on reducing the prices so low that in the beginning I may not be making allot of money, but I will be renewing lots of friendships that I have been missing. As a resident of Titusville – I literally know everybody. The social institution itself is exaggerated by the mores, attitudes, values, rules, procedures, and potential of the community and society in which it resides. So, I say let’s talk it over a cup of Joe, as the environment I plan on providing free Wi Fi, polished mahogany tables with comfortable chairs, and sofas to hang out on. Once again my theory of keeping it simple here will be the key, as the nearest Starbucks is many miles away I feel the Social Environment of my business will be one filled with joy, and if it’s not – then every day is another chance to get it right.
(AIU Online Web Resources, The Effect of Social Environment on Success, http://www.positivearticles.com)
The Economic Environment
These days with the crazy economy – and especially with the last launch of the Space Shuttle this Friday, some say Titusville will become a ghost town? (Maybe if you are an astronaut). But with my eye on the horizon and as my plan includes leasing one of the beautiful new buildings in the Historic District of Titusville, I say the economy is still there to be captured. In the day to day involvement of all the operations in my company I will strive to keep the supply chain, human resources, product management, and marketing of my company running smoothly. I will be doing this by cutting cost, daily examining of the new machinery and always looking for other ways to reveal my plan of saving myself from substantial business costs. I will always be ready to reveal new ways to save substantial costs. Understanding environmental regulatory risk is very important and identifying and reducing risks will be incorporated in my daily activities. Thinking Green these days has become very popular and researching recycle products that I may be able to buy and advertise with is also a great option.
(AIU Online Resources, http://www.pearsonhighered.com)
The Management Structure
My first choice here would be to research some Human Resources, as a Sole Proprietor I can go it alone for some time, but the time will come when I will need to hire help. The cost of doing nothing can far outweigh the budgetary impact of hiring an expert, but looking for the right person to help can be overwhelming. Checking their credentials as you consider training them may help with future ongoing problems. Local dispute resolution centers, mediation associations, and professional training organizations can help me find experts in my area, if a conflict where to occur. I would also consider turning to an external specialist if the conflict is beyond my current abilities or the scope of my internal resources. I do realize that it is important to create a personal and business boundary when hiring employees. As I have 8 years of experience A.A. the management structure of my Coffee House should once again be an ease and follow with my daily routine of continued sobriety, while always remembering that it was when I quit “Trying” to drink and began “Training“(i.e. meetings, helping others, etc.,) to stop drinking - I found success and joy in my life again. My past and using that to help others – and if that is with a job, then I will have to give it a go and experience it one moment at a time. I have to remembering that while I do want to keep it simple in the beginning – I am always open to researching and contacting outside sources to help manage my Coffee House. Now this is the opposite of a franchise, because a franchise has a "management system", a franchise manual that shows exactly how to run the business step-by-step. Anyone, for the most part, can run a franchise because they’ve systemized and organized the business to virtually run itself with little or no training. I however will be keeping a daily chart of duties and of course plenty of those post ‘em notes. What I have learned so far about going at it as a sole proprietor is in fact that small business management will be where I have organized and systemized my small business to virtually run by itself. This especially applies to the 1-person business! I chose this style of management because when it does come time for the business to run without me – I want to be able to vacation in Bermuda, I want to have the peace of mind that the employee I have selected and trained will bring me the peace of mind of running the company as if I were right there beside them.
(AIU Online Web Resources, http://www.carnegielibrary.org/Business marketing how to bootcamp : the fast and easy way to learn the basics with 112 world class experts proven tactics, techniques, facts, hints, tips and advice / [[edited by] Lance Glackin].)
The Operational Issues of a Sole Proprietorship
OK, one of the coolest things about going this route alone is the tax laws.
Did you know that federal government doesn’t consider sole proprietorships to be individual legal entities to be taxed? Sole proprietors report any business earnings on their individual tax returns — that’s the only financial reporting they must do. Now isn’t that just the definition of “Keeping It Simple”? Most sole proprietors file their business tax obligations as part of their individual 1040 tax return by using the additional two-page form Schedule C, Profit or Loss from Business
(http://www.dummies.com/how-to/content/the-federal-tax-forms-for-a-sole-proprietorship.html#ixzz1Qzo03EE7)
New research has showed that most new businesses with only one owner start out as sole proprietorships. Some never grow into anything larger. Others start adding partners and staff and may realize that incorporating is a wise decision for legal purposes.
Anyone who wants to start a business doesn't have to do anything official — file government papers, register with the IRS, and so on — to be a sole proprietor. In fact, unless the business owner formally incorporates — follows a process that makes the business a separate legal entity — the IRS considers that business a sole proprietorship. The biggest risk of a sole proprietorship is that the business isn't a separate legal entity. All debts or claims against the business are filed against the sole proprietor's personal property. If the owner of a sole proprietorship is sued, insurance is my only form of protection against losing everything I own. So knowing my Insurance Agent and my Insurance Policy is must. Other issues like the business growing direction and policies will be included in my future plan should the business go Franchise. I will have by day one a system of keeping invoices, daily sales charts, ordering new supplies and inventory reports filled out daily. One thing I have learned in life is that it never hurts to ask for advice, and I will always be open to any of my customer’s suggestions or remarks. These are all things that I would consider to be part of the day to day operating procedures. Any new unraveling issues arrive, I seemed to be highly trained as it seems that I am always ready for the next crisis in my family, with my recovery program, and with my friends and neighbors,,,,,,,,,, some would say I am well grounded. (I am just secretly reciting the Serenity Prayer half the time).
But that’s my secret.
The Financial Issues of Running a Sole Proprietorship
As I mentioned in the previous page, the tax laws are brilliant for me as a sole proprietor.
As for the day to day financial issues, also as I mentioned above I will be keeping a daily report of sales, a daily report of inventory, and shipping and receiving invoices properly organized daily. I really feel I might have over done it a bit too much in the previous page and covered most of this topic as well. But,,,,,,, lets study a bit about Debit and Credit Revenue, and no I will not be one of those business that charge an extra .50 cents for swiping your debit or credit card. Let’s look at the Debit Ratio: The debt ratio simply shows the firm's debt as a percentage of its capital structure. The term capital structure refers to the total liabilities and owner's equity amount. A firm funds its assets with its capital. Therefore, the total assets always equal the total capital structure.
The formula for calculating the debt ratio is a simple one:
Total debt/Total assets
(AIU Online Web Sources, http://www.investopedia.com/university/#axzz1Qzw8lroS) The Financial issues can also be found in the description of Sole Proprietorship;
It's very simple: You are the business. You're entitled to all the profits. You're also personally liable for all obligations of the business. This includes debts incurred in the operation of the business. Now hold up here - it gets trickier once you hire an employee though, so once again keeping it simple and small in the beginning is the key to success for me. (Sole Proprietorship, http://business-law.lawyers.com/business-formation/Sole-Proprietorship.html)
Identifying the Impacts of Potential Changing Factors, Including New Technology
With the introduction of the Apple I pad 2 coming out this week, one finds it hard when to invest in new technology for a new business or stick with the old standards?
Now as for me and my company – here once again is where I will be keeping it simple by following the plan I have already laid out. I will be making it a part of my daily routine to be researching via the web and also the many Coffee Magazine subscriptions I will have scattered about. There are excellent periodicals like ‘The Fresh Cup Magazine” – where one can log onto Facebook and chat about new brands and the latest technology in the coffee field.
(http://www.freshcup.com/about_us.php?gclid=CMP_-6L_46kCFQet7QodZC2oZw)
These magazines specialize in giving you the most vital, up-to-date information you need to enrich and improve your business. As Coffee has captured the imaginations and the palates of many an American, I would like to be right there on the front row with the latest blends, helping to make sure my neighborhood has a safe and friendly place to enjoy coffee every morning and an Iced Coffee every afternoon.
