Forms of Ownership are covered in Chapter 3. In this discussions, students will

Question

Forms of Ownership are covered in Chapter 3. In this discussions, students will compare and contrast different options available for a business owner.

Business Owner Scenario

John experienced great success with his first food truck, Tasty Taco Treats. The menu features extraordinary tacos, not the ground beef ones you are so familiar with. The business has won many awards for their delicious, unique menu items. John began this business operating as a sole proprietorship.

John's good friend, Luis, is a talented chef who is very interested in helping John expand. Working closely together, they have created a larger menu. The opening of the first brick and mortar location is in the works.

Anna, who has helped John run the food truck, is planning the design of the food service space and will be running the customer service part of the restaurant.

He is considering restructuring the form of business ownership and has come to you for some advice.

Use the numbers for each element to organize your initial post.

Instructions:

Explain ownership options available to John. What are the key advantages and disadvantages of each?

Given what you know about John's plans, which form of ownership would you suggest for his business? Why?

The failure rate for small businesses is quite high. What advice will you offer to help John succeed? to help him avoid failure?

Explanation / Answer

They can establish a partnership firm in this case. These partners are working together for the business, and they contributing services to the busienss. They can invest capital in some proportionate basis, and they can share the profits or losses according to this ratio of investment. The benefits of partnership firms are:

the drawbacks of partnership firms are:

For him, parntership works in this case. Because, these three members deviding the business activities together and works together. It helps them promote healthy and good business decisions, by sharing the tasks, they can achieve the business targets easily.

The rate of failures may be higher in small business sector, but John is running a succesfull business only. One of the business which never drags to huge lossess is food business. Because the fixed capital is limited, lesser manpower is sufficient and more flexible operation chances are there. Here, John can expand the services to new markets and locations, later he needs to work of focus on concentrated diversify strategies. No business have the same kind of environment from its inception to today, it has to modify the nature, procedure and process according to the customer requirements, competitors actions and based on changing goals. Since, John also focused on these issues to run the firm more succesfully.

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