Springalice Wines and Spirits Store - Case Study Example

Springalice wines and spirits store Name: Institution: Springalice Wines and Spirits Store Scaling out right decisions about the legal and corporate framework of a business is a vital investment in business. My Springalice’s, foundation was based upon liabilities, taxation and ownership. Unlike other stores it deals in fine wine and spirits distinguishing itself from competition and ensnaring market share through its strategic location in a newly sprouting residential neighborhood, Springbok. It hence assumes preferred services through deliveries, restaurant services and on-shelf sales kiosk. Success is achieved through emphasis on excellent customer service, robust selection of quality inventory and competitive pricing. Through computerization it monitors its sales and exploits opportunities to ensure optimization of supplier relationship (Contrata, 2004). Business Legal Structure Business structures are dictated upon by levies, liability, and risk control, continuity of survival, transferability and formality. In this case it is a sole proprietor. The owner incurs less expense in setting it up. Being small in size management is bestowed upon the owner though having some paid workforce. The seed capital is thus generated from the owner bearing all the risks (tort and contract risk). Therefore he is liable to business debts, in which debtors can lay claim on his personal assets upon breaching of loans. The business and the owner are considered one in the eyes of paw. Ensuring at least 25% minimum gross profit margins he maintains a rapport between the customers and him (Quick, 2010). Alternative Structure Business structures are determined by intellectual property and legal structure. There exists various kinds of legal structures however; Springalice can well suit within a sole proprietor vested by its elements. Moreover it can unincorporate to encompass the association of two or more individuals that is partnership limited, general or a blend. Hence the two are liable to the store’s management and control. Through signing of an agreement written or oral the individuals minimize misunderstandings. Due to sales of wines and spirits being robust in the recent years, it therefore demands for expansion of our stores and services in delivering products to various clienteles. As the residents shift progressively continues more opportunities come ready to accommodate this tremendous growth and capitalize on the market demand. In this event it calls for a diverse legal structure that is partnership. Unlike sole the business will harness more seed capital impacting to more returns through successful sales (Mancuso, 2010). Therefore each partner shares the net income or loss with inclusion of the tax returns. Upon the agreement this can be in existence depending on the individuals and automatically terminates on for instance death, bankruptcy or desire to cease. This depicts its limited life. While sole ownership all responsibilities are upon the owner in this case it’s a mutual agency whereby the members are agents of the partnership emphasizes Mancuso, (2010). Springalice being a small entity the partners have unlimited liabilities binding the partners and their assets. Significance of Sole Proprietorship Sole businesses are recognized by universal jurisdictions. Though other forms of legal structures pop up sole consistently remains dominant and fundamental. This is primarily due to the ease of the associated form of business. For instance costs incurred: because there is less or no paperwork it easy to establish. In most cases the business operates under the owner’s name hence need to register the business is not of much importance depending on the location. Moreover tax charges are simple that is through declaring them in the personal income tax form rather then having a separate tax form. Through owning 100% of the business one enjoys all returns, bearing in mind that in the event of a liability the owner may change the business structure and type. This is as a result of it being flexible. The owner in this way has authority in decision making and effective control making use of the market opportunities (South Australia Department of Trade, 2007). Reasons for Springalice Establishment Springalice main objective is to develop in the sales of fine wine and spirit within the region. This will be measured through media surveys within the locality. On the other hand the business anticipates maintaining its rating as one of the best stores and earning a profitable return on investment during its fourth annual inauguration. Considering this it will ensure retail prices are less compared to wholesale prices. Apart from that my main interest was to achieve an ideal economic landscape where profits generated will propagate my education. Moreover I wanted to be dynamic in the business world during this age of industrial renewal. Wealth Maximization Springalice through a combination of innovations and entrepreneurship has managed to attain a considerable wealth maximization strategy. Through the returns obtained from the sales the stall has expanded its branches to two within a period of four years. Characterized by increased commissions, and escalating levies charged it has seen that more staff is being recruited. Springalice’s goal being maximization of profits which in turn wheels wealth maximization. Being a social utility its necessary for the store, hence profit and expansion are the critical elements of the sole. This smoothes out all liabilities through eradication of market share issues and social responsibilities as the stall progressively expands. Therefore this involves long term sustainable planning, seed increment and continual asset accumulation as opposed to profit isolation. In this event the essential thing is the worth of the fine wine store. The wealth of the business is in this way tied up to property and facilities it owns. The business’s work force may seem somehow an intangible asset this is not the case. Skilled personnel and healthy management are indicators of wealth routing towards wealth maximization. It is however not vital to combine money and wealth as they are two very different things (Madden, 2005). Characteristics of Small Businesses During the establishment of businesses the owner has to consider various factors of which failure to adhere them will see the business collapse. Hence small businesses are characterized by their form that is business structure. This hence depends on the type of business and the financial situation of the individual. Hence small businesses entail: 1. Ease of operation 2. Less exposure to liabilities 3. High flexibility due the circumstances faced. 4. It is cost effective and has manageable staff. Therefore professional advice is less essential depending on the expertise of the individual. However this saves lots of head ache in the long run. Small businesses are in today’s world viewed as the necessity to economic dynamism. Due to economic crises small businesses seem to thrive due to reduced costs and new trends in technology (Mancuso, 2010). Reference: Contrata, R. (2004). How To Pick A Small Business Type. Small Business Resources , 2-12. Madden, B. (2005). Maximising Shareholder Value and the Greater Good. Mancuso, A. (2010). Business LLCs or Corporation. How to choose the right form for your business . Quick MBA. (n.d.). Business Legal Structures. Law and Business , 2010. South Australia Department of Trade. (2007). Choosing an Onwership Structure . A Guide for Business Operators in South Australia , 1-9. Read More