Plan for Developing New Partnership Firm: Engulf and Devour - Essay Example

Plan for developing new partnership firm The exciting new of establishing a new engineering consulting firm presents a better prospect for earning good money for the director of engineering services at Engulf and Devour, considering the fact that the opportunity offers a salary of $50,000 to be shared among the three partners per month. This would translate to $600,000 per year to be shared amongst the three partners, which then means that each partner will be earning $200,000 per year. This salary prospective is an improvement compared to the current salary of $150,000 per year earned from the employment at Engulf and Devour. In addition, there new partnership opportunity offers Per Diem expenses and travel allowances that are paid by the client, meaning that the there will be minimal or even no business expenses that the partners will have to meet at their personal cost. While this opportunity seems to be very promising, there is one major worry though. The fact that the new prospective engineering consulting company has secured a contract for 12 months only poses the danger of the likelihood of a future job and financial crisis, on the event that the contract is not renewed. This would mean that the three partners would be left jobless and without a source of finance to support their lives. Consequently, it is important that a concrete plan is laid down to ensure that the new engineering consulting opportunity goes beyond the single contract that has been secured into a fully-fledged engineering consulting entity that will obtain more contracts from different clients. This way, the future of the new opportunity will be secured, which means that the business opportunity will become sustainable. Therefore, the plan for developing new partnership firm will entail: Opportunity cost and Cost Benefit Analysis (CBA) The opportunity cost analysis assesses the value of the opportunity than an individual has to forego, in order to pick on an alternative opportunity (Lauer, 14). On the other hand, the Cost Benefit Analysis is applied towards assessing the benefits and the costs that the new opportunity has to offer, and then comparing between the costs and the benefits, to determine whether to take the new opportunity or not. Where the costs are more than the benefits, then the new opportunity should not be taken. However, where the benefits of the new opportunity supersede the costs, then the new opportunity can be taken. In this respect, the first stage in the process of developing new partnership firm entails a personal reflection in relation to the question; what is my ultimate goal for my career and personal life? (Goudreau, n.p.). This question is fundamental to a solid decision-making process, because it enables an individual to evaluate their personal preferences and goals for life. The individual has to weigh the career prospect presented by the new opportunity against the opportunity that the individual already has. For example, an individual must assess the likelihood of job flexibility being compromised, as well as the likelihood of losing the benefits associated with a long-term build career that the individual has been working for over the years such as the health insurance benefits and the retirement pension plan packages (Goudreau, n.p.). It is against such backgrounds that it becomes essential to consider whether an individual seeking to quit the job he/she has will deliver more benefits than the ones being enjoyed. While the salary scale is a major consideration when it comes to a shift in career, there are other important factors associated with the working environment that requires to be considered, such as the stress, disorientation and orientation that is required to suit into the new working environment. Risk tolerance analysis Additionally, it is important to consider the internal motivation related to whether an individual has inherent entrepreneurial interest, considering the fact that the success of a new business venture largely depends on the internal entrepreneurial drive that an individual starting the business posses (Goudreau, n.p.). This is important considering the fact that the new opportunity that has arisen is not out of a personal initiative of the individual already working as the Director of engineering services at Engulf and Devour, but an outward motivation caused by the interest of former college acquaintances. If the individual does not have a high level of risk tolerance, then the individual should not take up the opportunity, because all new business start-ups entail some degree of risks that the entrepreneurs must take; the risk to fail or to succeed (Henderson and Hooper, 24). Therefore, it is after considering all these factors and answering them favorably, that the individual progresses to the next step of developing the new firm. New firm start-up requirement evaluation The next step after assessing the evaluation of risk tolerance is the evaluation of the requirements for setting up the new engineering consulting services firm. Any start-up business must undergo a process of business name identification, registration and obtaining of the relevant licenses and legal documents, before the business can start running (Lauer, 47). The business registration process normally differs based on the nature of the business to be registered, since there are different legal requirements for different types of businesses. Therefore, the individual seeking to quit the job at Engulf and Devour must evaluate the entire legal requirements for the registration of an engineering consultancy type of business, as well as assess the financial requirement and the time it will take to register and have the business running. Once all these factors have been considered, it is time for the three business partners to assess whether they have all the necessary requirements for business registration and whether it is possible to meet the requirement within the stipulated time of commencing the contract that has been secured. In addition, the three business partners must evaluate whether they have the relevant skills to run the new firm, and the skills required to offer the engineering consultancy services. This is because; the qualification in a certain field of profession does not guarantee the necessary skills required to run an enterprise in such a field (Goudreau, n.p.). After evaluating the skills available and the skills required, the three partners must determine the skills gap and plan on how to fill the gap within the stipulated time of commencing of the already secured contract. Support system analysis The final step in the plan for developing a new engineering consultancy services partnership is to assess the existing support system that the individual seeking to quit the job at Engulf and Devour has in place. The support systems take two forms; the family and friend’s support system and the plan B support system. The family and friend support system helps a prospective entrepreneur to avoid going alone into a process that is emotionally and psychologically draining (Henderson and Hooper, 72). Therefore, the moral support from friends and family keeps the prospective entrepreneur going through the hard transition period of quitting a job and establishing a stable business. The plan B support system tackles the likelihood of expanding or diversifying the business opportunity into a different client base or customers (Goudreau, n.p.). In this respect, the three partners must first establish which other companies they can offer their consultancy services, before making the ultimate decision to start the engineering consultancy firm. This is because, after the expiry of the 12 months contract, the firm will need to continue operating so the partners can continue benefiting financially. The risk associated with this venture is that once the contract expires, the company partners might fail to earn the $50,000 per month, since the new business contracts might be paying lower than that. Therefore, it is important for the partners to see beyond the existing opportunity and then make a concrete decision regarding whether they are ready to face the uncertain future. After having evaluated all the above factors on step-by-step basis and found favorable and positive results, the director of the engineering services can quit the present job at Engulf and Devour, and then join the two college acquaintances in starting the engineering consultancy services firm. On the other hand, if the results are not favorable, then the director should continue with the present employment. Works Cited Henderson, David R, and Hooper, Charles L.. Making Great Decisions in Business and Life. Chicago Park, Calif: Chicago Park Press, 2006. 24-81. Print. Goudreau, Jenna. 10 Questions To Ask Before You Quit Your Job. Forbes Magazine, September 21, 2010. Available at: www.forbes.com/sites/jennagoudreau/2010/09/21/10-questions-to-ask-quit-your-job-unemployment-google-apple-finances/ Lauer, Chris. Breaking Free: How to Quit Your Job and Start Your Own Business. Westport, Conn: Praeger Publishers, 2009. 14-56. Print. Read More