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Business and Enterprise

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tHE NATURE AND STRUCTURE OF A BUSINESS
BUSINESS AND ENTERPRISE

tHE NATURE AND STRUCTURE OF A BUSINESS
BUSINESS AND ENTERPRISE

Page Number | Contents | 1 | Contents | 2 | Executive summary | 3 | Introduction | 3 | Ownership Structure | 4 | Summary | 4 | Conclusion | 5 | Resources | 6 | Resources | 7 | Resources | | |

Executive Summary:
The task ahead is to plan, investigate and create Mark and Jodie’s business. There will be thorough investigation to solve the best ownership structure and why. The types of ownership structures that have been over looked include partnership and sole trader. These types of ownership structures could both be very useful for their type of business. Their plan is too start off small and then grow their business with their children. This has to be taken into consideration when deciding on what type of businesses structure is chosen. The information has to be collected from a wide range of Primary and Secondary resources.

Introduction:
A married couple who have two children are interested in creating a new business, providing a winery bus tour for their local area. Mark and Jodie have a plan to start off small and one day grow into a larger business. Mark would like to start off with a 13 seater van but then over the long term would like to be larger and offer coach tours to wineries all over Australia. Jodie, the wife, would be working in the business as well as hopefully their children one day. The ownership structure that should be taken into consideration are Partnership and Sole Trader, this is shown below.
Ownership structure:
Sole Trader:
A sole trader is owned and operated by ONE person, the owner may choose to hire other staff members. But the owner is still the one who provides all the finance, makes the decisions and takes all the responsibilities. This can be useful for Mark as he could own and operate the business. Some of the main characteristics of a sole trader are; choose your trading name, simplifying to your needs, being the owner and having liability. 1
The main advantage’s in being a sole trader are; it’s easy to establish, the owner has the right to keep all earnings, simple to start up, low cost of entry and being the owner means you are in complete control of the business.
The disadvantages are; it can be slightly hard to fine the finance for the business, you have to carry all the losses, it can be difficult to operate if sick and you are burden of management.2

Partnership:
Partnership is the next type of business ownership type from ‘Sole Trader’. A partnership is a legal business that is owned and operated by 2-20 people. The types of characteristics when having a business that is partnered, you must be have an agreement and possibly sign a contract. The profits must be shared between each owner as there is a different legal structure. 1
It can have many advantages being partnered. There is a lower start-up cost as the money is shared between each member/partner. The funds and talents are pooled, if there is a death of an owner the business can still go on. There are no taxes on the business its self but only on personal.
A few disadvantages of undertaking Partnership is the possibility of disputes, liability for all partners and it can be difficult to find a suitable partner. 3

Judgements: As Mark and Jodie are a couple they plan to work in their business together and therefore has to be taken into consideration about their type of business structure. The two types of business structures of ‘Partnership’ and ‘Sole Trader’ are recommended to Mark and Jodie. The sole trader can be good for Mark as he can be the owner and hire Jodie as an employee this means that he can make her second in charge of their business. This can be good as mark makes the decisions. If they were partnered they have to share the profits and there can be possible disputes against one another.

1 Student Resources, 2015
2 Business.gov.au, (2016). Sole trader | business.gov.au. [online] Available at: http://www.business.gov.au/business-topics/business-structures-and-types/business-structures/sole-trader/Pages/default.aspx [Accessed 29 Feb. 2016].
3 Smallbusiness.wa.gov.au, (2016). Partnership. [online] http://www.smallbusiness.wa.gov.au/business-topics/planning-structures/business-structures/partnership/ [Accessed 29 Feb. 2016].
Before they can open Mark has to investigate other types of businesses that are similar to his and their prices range. There is a tourist site for the local community and tourist to go on winery tours for a low cost 4. Mark has to make sure he chooses the best price for his area as he could lose customers if he has the prices too high. To have a successful winery bus tour Mark will have to choose his cost wisely and not spend too much on the business for example he may not be able to get a loan or money support. He could choose to go to the bank for a small loan, ask family members or use his own savings.

There is a winery tour located in the Adelaide Hills, Mclaren Vale and the Borassa that supply’s certain tours with food and bus services that is all owned by ‘Cellar Door tours’5. This business has been doing tours for these locations for over 10 years and is owned and operated by family. They try and create the best experience for tourist with the cheapest prices. They are committed to provide the best in class experience of their locations. One issue that is to be taken into account with their business, is seasons. They lose business if the weather is too hot or if the weather is too cold/rainy6. Recommendation:
To get a professional opinion to running a winery tour business, primary information had to be collected. After interviewing Cellar Door Tour5 regarding what type of business they are and the dis/advantages of running their business. They are a family owned business that is partnership between family members but were not able to mention other family names. They recommend the business to anyone who will put in the effort and hard work to create the business. Their main disadvantage for their business is the season as winter and autumn are their quiet seasons. Mark has to take this into consideration when spending money on their business and their location.

Conclusion:
Mark and Jodie would make a good team when undergoing this type of business. It would be good for them to start off small and grow their business further with their children. From this information and interviewing another similar business, it is recommended that Mark and Jodie start a partnership business and hire employees later down the track. Form their they then can expand easier and have more partners when Mark and Jodie feel comfortable.

Word Count: 926

4 Excursions, D., Trips, D. and Adelaide, B. (2016). Barossa Valley with Hahndorf Tour from Adelaide – Adelaide Viator http://www.viator.com/tours/Adelaide/Barossa-Valley-with-Hahndorf-Tour-from-Adelaide/d376-6594_584 [Accessed 29 Feb. 2016]
5 Stellar Digital Strategies, w. (2016). About Our Wine Tours - Cellar Door Wine Tours - Barossa, McLaren Vale, Adelaide Hills. [online] Cellar Door Wine Tours - Barossa, McLaren Vale, Adelaide Hills. Available at: https://cellardoorwinetours.com.au/about-our-wine-tours/ [Accessed 1 Mar. 2016].
6 Student source, Interview 2016
Resources:
Appendix: 1
Source from student in 2015,
Appendix: 2

A piece of text found on the: Business.gov.au, (2016). Sole trader | business.gov.au. [online] Available at: http://www.business.gov.au/business-topics/business-structures-and-types/business-structures/sole-trader/Pages/default.aspx
[Accessed 29 Feb. 2016].
Appendix: 2

A piece of text found on the: Business.gov.au, (2016). Sole trader | business.gov.au. [online] Available at: http://www.business.gov.au/business-topics/business-structures-and-types/business-structures/sole-trader/Pages/default.aspx
[Accessed 29 Feb. 2016].

Appendix: 3
Partnership government website:
Smallbusiness.wa.gov.au, (2016). Partnership. [online] Available at: http://www.smallbusiness.wa.gov.au/business-topics/planning-structures/business-structures/partnership/
[Accessed 29 Feb. 2016].
Appendix: 3
Partnership government website:
Smallbusiness.wa.gov.au, (2016). Partnership. [online] Available at: http://www.smallbusiness.wa.gov.au/business-topics/planning-structures/business-structures/partnership/
[Accessed 29 Feb. 2016].

Appendix: 4
Australia, S., Excursions, D., Trips, D. and Adelaide, B. (2016). Barossa Valley with Hahndorf Tour from Adelaide – Adelaide Viator http://www.viator.com/tours/Adelaide/Barossa-Valley-with-Hahndorf-Tour-from-Adelaide/d376-6594_584 [Accessed 29 Feb. 2016].

Appendix: 4
Australia, S., Excursions, D., Trips, D. and Adelaide, B. (2016). Barossa Valley with Hahndorf Tour from Adelaide – Adelaide Viator http://www.viator.com/tours/Adelaide/Barossa-Valley-with-Hahndorf-Tour-from-Adelaide/d376-6594_584 [Accessed 29 Feb. 2016].

Some examples of winery tours around Adelaide, sourced from:

Appendix 5: Stellar Digital Strategies, w. (2016). About Our Wine Tours - Cellar Door Wine Tours - Barossa, McLaren Vale, Adelaide Hills. [online] Cellar Door Wine Tours - Barossa, McLaren Vale, Adelaide Hills. Available at: https://cellardoorwinetours.com.au/about-our-wine-tours/ [Accessed 1 Mar. 2016].
Appendix 5: Stellar Digital Strategies, w. (2016). About Our Wine Tours - Cellar Door Wine Tours - Barossa, McLaren Vale, Adelaide Hills. [online] Cellar Door Wine Tours - Barossa, McLaren Vale, Adelaide Hills. Available at: https://cellardoorwinetours.com.au/about-our-wine-tours/ [Accessed 1 Mar. 2016].

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