Business Partnership - Essay Example

Business Business Businesses are of different forms of ownership, one of such form is partnership. One of the major advantages of forming a partnership is that capital can be easily raised as different partners will invest capital on their own. Increase in the ability to generate more capital for running the business leads to increased profits. The profit earned in partnership is equally shared or shared according to the percentage of investment done by a partner. The rules and regulation and supervision conducted by regulators are low in intensity in partnership as compared to a public limited company (Madura, 1998, p.162). Operating the business becomes easier as partners with different skills manage different activities and more ideas are generated due to more than one mind involved in running the business. Taxation is shared between the partners, which mean that the expenses are shared between more than one individual. The cons associated with this form of ownership include danger of disagreement (Gitman, 2008, p.119). This means that if one of the partners disagrees, a decision may not be taken as all the partners are required to agree or agreement may take place which may lead to conformity with the figurehead of the partnership. More paper work is involved in the process of taxation as all partners have to get themselves registered as self employed. Due to equivalency in sharing of partners, profits are divided according to share of investment even if certain partners may put in more effort and others may not for the success of the business (Moore, 2010, p.167). While raising capital to start a small business, an individual can start by financing the businesses himself. Several benefits such as retaining all the profits are associated with this form of financing, but if a small business need to grow large then it needs to look for other options (Alterowitz, 2007. P.14). Next best alternative is to ask for assistance from family members and relatives for finance. For this purpose an entrepreneur has to make the effort of making his relatives realize that he/she has a great investment plan and will be quite successful. In very rare instances family and friends invest in a business; if an entrepreneur faces such a scenario, he/she can obtain assistance from the government (Great Britain, 2006, p.18). Government has various plans where they finance small businesses or provide money in shape of grants to entrepreneurs to start up their own business. If an entrepreneur is not eligible for such government support options, the business can obtain a loan from banks to start small businesses. Due to failure of large businesses and the risk of high amount of loss associated with large businesses, banks and governments are more willing to finance small businesses (Moore, 2008, p.319). One of the major decision made by a manger is to identify the cost of producing a product and then price the product according to make profit when they sell their goods and services. For this purpose they can use activity based costing method, by using this method they can calculate the cost of an activity associated with producing a good or service (Cleverley, 2007, p.309). Managers can utilize the method of incremental analysis to measure how a particular alternative or solution to a problem may affect the cost and profit being gained by the organization (Powers, 2011, p.118). Budgeting aids the management in analyzing goals as budgeting transforms aims and objectives into quantifiable format which further aids in identify the amount of resources that will be utilized in achieving those aims and objectives. Managers can obtain assistance through various ways of making a budget, an organizations master budget is a representation of all the expected resources and expenses that will be needed to conduct business. The master budget is even a representation of what the firm plans to do and achieve in a specific period of time 9 Drury, 1992, p.361). The marketing process starts with the analysis of the situation, this means that marketers have to first analyze the needs and wants of consumers, the environment in which they are operating. While analyzing the environment, they have understood the financial health of the environment they are working in, the rules and regulations that can affect the business and the demographics of the consumer (Lamb, 1999, p.38). Next the organization has to develop a marketing strategy in which they analyze the environmental factors that are located within and outside the company. Factors that are within the company’s control include that marketing mix that the firm creates to sell a product, and the strengths and weaknesses associated with the marketing mix. External factors include social, economical a political factors along with an analysis of the target market suppliers and competitors (Fortenberry, 2010, p.235). On the basis of the strategy, the marketers develop a marketing mix in which they pay emphasis on what they are going to sell, how they are going to sell, and to whom they are going to sell. Once the strategy for marketing is developed, it is implemented and its impact is monitored (Masterson, 2010, p.256) Marketing and the entire process of creating and selling a product has been greatly affected by increase in importance of social responsibility and continuous changes in technology (Pride, 2009, p.84). When social responsibility becomes a part of the marketing process, marketers look at the entire community rather than only paying emphasis to the interests of their company. Practices that become a part of a socially responsible marketer includes fairness towards treatment of labor, keeping the environment safe and getting involved with the communities of the area they are operating in (Hooley, 2004, p.515). Technological changes have changed the scenarios for marketers and now the authority is shifted in the hands of the customers and the consumers from the hands of the marketers and producers. Internet has aided not only the consumers; it has even helped the marketers. Consumers now have access to more options than they ever had, while on the other hand, marketers have figured out new and cost effective methods of marketing their goods and services which has even increased the overall profitability of the organizations (Hawkins, 2006, p.86). References Madura, J. (1998). Introduction to business. Cincinnati, Ohio: South-Western College Pub. Gitman, L. J., & McDaniel, C. D. (2008). The future of business: The essentials. Mason, OH: Thomson South-Western. Moore, C. W., Petty, J. W., Palich, L. E., & Longenecker, J. G. (2010). Managing small business: An entrepreneurial emphasis. Mason (Ohio: South-Western, Cengage Learning. Alterowitz, R., Zonderman, J., & Entrepreneur Press. (2007). Financing your business made easy. Irvine, CA: Entrepreneur Press. Great Britain. (2006). Supporting small business: Report. London: Stationery Office. Moore, C. W., & Longenecker, J. G. (2008). Managing small business: An entrepreneurial emphasis. Australia: South-Western/Cengage Learning. Cleverley, W. O., & Cameron, A. E. (2007). Essentials of health care finance. Sudbury, Mass: Jones and Bartlett Publishers. Powers, M., Needles, B. E., & Crosson, S. V. (2011). Financial and managerial accounting principles. Australia: South-Western/Cengage Learning. Drury, C. (1992). Management and cost accounting. London: Chapman & Hall. Lamb, C. W., Hair, J. F., McDaniel, C. D., Lamb, C. W., & Wardlow, D. L. (1999). Essentials of marketing. Cincinnati, Ohio: South-Western College Pub. Fortenberry, J. L., & Fortenberry, J. L. (2010). Health care marketing: Tools and techniques. Sudbury, Mass: Jones and Bartlett Publishers. Masterson, R., & Pickton, D. (2010). Marketing: An introduction. London: SAGE. Pride, W. M., & Ferrell, O. C. (2009). Foundations of marketing. Boston: Houghton Mifflin. Hooley, G. J., Saunders, J. A., & Piercy, N. (2004). Marketing strategy and competitive positioning. Harlow, England: Prentice Hall Financial Times. Hawkins, D. E. (2006). Corporate social responsibility: Balancing tomorrows sustainability and todays profitability. New York: Palgrave Macmillan. Read More