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[Business Organization and Intellectual Property] Phil Young, founder of the Pedal Pushers Company, has developed several prototypes of a pedal replacement for children’s bicycles. The Pedal Pusher will replace existing bicycle pedals with an easy-release stirrup to help smaller children hold their feet on the pedals. The Pedal Pusher will glow in the dark and will provide a musical sound as the bicycle is pedaled.
Phil plans to purchase materials for making the product from others, assemble the products at the venture’s facilities, and hire product sales representatives to sell the Pedal Pushers through local retail and discount stores that sell children’s bicycles. Phil will need to purchase plastic pedals and extensions, bolts, washers and nuts, reflective material, and a microchip to provide the music when the bicycle is pedaled.
• A. How should Phil organize his new venture? In developing your answer, consider such factors as amount of equity capital needed, business liability, and taxation of the venture.
Phil should organize his new venture by proprietorship. With that said he should hire one sales representative. And he could be the other representative. As for the materials they aren’t hard to buy nor are they expensive. Phil is going to take the grunt of the liability but in the beginning stage they are low costs and the risk is not high.
• B. Phil is concerned about trying to protect the intellectual property embedded in his Pedal Pusher product idea and prototype. How might Phil consider protecting his intellectual property?
I would recommend Phil a patent. If patenting Phil’s product ends up being too expensive Phil could consider doing a trademark, although a patent would provide more protection for Phil’s product.

• Calculate the inventory-to-sale conversion period for 2010.
Average Inventory/2
Cost Of Goods sold /