Help me with this question (4 types of leadership styles: sole proprietorship, p
ID: 344464 • Letter: H
Question
Help me with this question (4 types of leadership styles: sole proprietorship, partnership, corporations and franchise) Joe wants to quit his job and start up his own business. He is 100% certain he is going to win the lottery in 5 years so he is only interested in having his business for the next 5 years. His other friends have told him that he could save a lot of money on income taxes if he started his own business. He doesn’t know how to set up his business form so he is coming to you for assistance. Given what Joe has told you, what business form would you recommend? Please explain to Joe why you are recommending this business as well as the advantages and disadvantages of this business form.
Explanation / Answer
Since Joe is certain that he will win a lottery in the next 5 years and is only interested in having the business for the next five years only the best course of action for Joe to take is to invest in a franchise. even though the advice his friends gave is a good one and in the long run that was the best option but given the conditions that Joe has given, a franchise would allow him to develop from an already set up business and allow him to focus on the things about business that would help him increase his profits and expand.
This can be seen as a relatively stable, low cost, low investment and low-risk factor market entry mode which allows any company to be able to leverage any business that has already been established or has at least some sort of network connectivity, supply chain and management and also some amount of presence in the market. while creating a business with sole proprietorship can also prove to be effective but he would have to start a new business and maintain it efficiently until the time it reaches a point where it can generate profit. he could go in a partnership with his friend and can also let them have the business for a portion of the company when he sells it. while forming a corporation he is not going to be a part of in five years from now does not provide him with many benefits.
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