...Word count 467 Discuss whether readiness and restraint factors are likely to be more relevant in influencing the start-up decision of a potential small business owner more than the other characteristics Peacock (2004) is discussing. Becoming an entrepreneur is not for everyone. It takes a special person with a strong commitment and special set of skills to become a successful entrepreneur. McClelland (1961) developed the theory of three types of need - need for achievement (nAch), power and affiliation – that are required to try something new and uncertain. The theory suggested that the higher the nAch, the higher is the entrepreneurial success. According to McClelland one of the important factors for achievement is the extent to which an entrepreneur assumes his responsibility for solving problems. Furthermore, Gatewood noted that potential entrepreneur with high personal efficacy scores would be persistent in successfully starting a business (Gatewood, Shaver & Gartner 1995, p.380). Therefore, readiness and restraint factors are important in influencing the start-up decision of a potential small business owner but in conjunction with the personal characteristics of the future owner- manager, who has the entrepreneurial vision, who is innovative, searches for new opportunities and is driven to make things happen (Mazzarol, Volery, Doss & Thein 2001, p.15). The entrepreneur is frequently characterised by a strong internal desire to achieve and seeks to generate...
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...Peacock (2004) makes the distinction between small business owner manager as “The person who sets up a business as an own account worker simply to replace a job may be less enterprising than the person who creates a product, finds a market niche, sets out to maximise a capital gain from a business idea, or helps provide skills and networks for the unemployed,” the entrepreneur. If we make these distinctions clearer by classifying the small business owner and entrepreneur as in Carland et al. (1984), the small business owner sees “the business as an extension of his or her personality, intricately bound with family needs and desires” and the entrepreneur “is characterised principally by innovative behaviour and will employ strategic management practices in the business” to create innovation, profit and growth. If we assume that a typical small business falls into the first category, then readiness or restraint is more important to decision to start up, unless other factors like “window of opportunity”, “precipitating events” or “risk” are more relevant as laid out in Peacock (2004) If we look only at the small business owner in relation to the question then it seems that the decision to start up a business is largely driven by readiness. According to Peacock (2004), - P. R. Liles (1974), says more control over lifestyle, general self-confidence that comes with age and work experience, and industry knowledge, but that unless there is some dissatisfaction with their...
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...S. Small Business Administration, there were 27.2 million small businesses in the United States in 2007. Small business can be defined in different ways. The U.S. Government agency that helps people start businesses is the Small Business Administration or SBA. It categorizes a business in the United States as small if it has fewer than 500 employees. The international community uses the term small and medium enterprise or SME, instead of small business. Among SMEs, small enterprises have 1 to 50 people, while medium enterprises have 51 to 500 people. Whereas on owner-managed small businesses of 1–50 people and places greater emphasis on the lower end of the range. Independent and owner-managed small business means that the business is owned by an individual or small group rather than existing as part of a larger enterprise or a business whose stock can be bought on an exchange. Owner-management refers to constant or at least daily management of a business by its owner. It is possible to become an absentee owner, who profits from a business but is not involved in its day-to-day operations. This, however, is a different type of business with different problems from those of firms run by an owner manager. Small businesses are imitative in nature, with most small firms doing what other firms do, with only slight variations. But when we think about the people who start firms for the first time, the situations they face are situations of novelty. The purpose of a small business is to...
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...Small Business Idea University of Phoenix Accounting Acc/561 Norsey Dorris June 27, 2012 The government has decided to kick start another program to release funds for small businesses across the country. This can be an exciting and overwhelming experience at once to start-up a new business, especially with the help of federal funding. To incorporate or not to incorporate, that is the question. There are many decisions to make once a business idea (hopefully a business plan has been created) is ready to launch. Whether it is a small restaurant, local liquor store, or an auto repair shop, one of the main decisions is to what type of organization or business entity to create. There are four main forms to choose from: Sole Proprietorship, Partnership, C Corporation, and S Corporation. Sole Proprietorship A sole proprietorship is one of the easiest and main ones for a small business owner. The business will be owned by one person and it is simple to set up and gives the individual control over the business (Kimmel, Weygandt, & Kieso, 2009). The sole proprietor can run the business for any duration of time and sell it when he or she sees fit. The person can also pass the business to down to his or her heirs. In addition, compared to corporations, a sole proprietor will receive favorable tax advantages. The owner will pay taxes on his or her personal income, which is more favorable than the double taxation that occurs in corporations. Paperwork,...
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...Proprietorship BUS 311: Business Law 7 Jul 2014 Sole Proprietorship Upon the decision to start a new business, one must ask the question of what type of business entity they intend to initiate. According to Rodgers, Author of the book Essentials of Business Law, “One of the most fundamental decisions all businesspersons face in starting a business is how that business will be organized,” (2012). There are several deferent business entities to choose from. The business owner would have to weigh the different possibilities and factors such as taxes and liability to find which entity fits their intentions best. Most new small businesses options come down to a sole proprietorship, a partnership, a Corporation, or a Limited Liability Company (LLC). “For many small business, the best initial choice is either a sole proprietorship or if more than one owner is involved a partnership,” (Steingold, 2003). Even though it possesses more liability on the owner, if I were to start a new business I would have to choose sole proprietorship as my business entity. “When you start a new business, you must choose a legal format,” (Steigold, 2014). This decision will be the blue print for how the new business will operate in the years to come. As such, the new owner must weigh the benefits and the consequences, examine liability, personal time, expenses and taxation. According to Steingold (2014), it’s in the best interest of the owner to follow a checklist for starting a new business. This check list...
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...Peacock (2004, p43) states "Many people, however, with such characteristics do not start a business because they never feel ready to do so, and/or distractions and obligations hold them back. Other people with similar characteristics have certain periods in their life cycle when a window of opportunity opens to start a business, because they perceive that their capacity (readiness) to start exceeds any restraints operating against them." Discuss whether readiness and restraint factors are likely to be more relevant in influencing the start-up decision of a potential small business owner more than the other characteristics Peacock (2004) is discussing. There are numerous opportunities and choices in a life cycle which each individuals face to make their own decision. Some are significantly influential and some are less influential to their life. In order to make up the decision, there are many factors you consider within yourself. Starting up an own business could be one of the choices people encounter when they discover a window of opportunity in their life cycle. The result of deciding whether to start up or not is significantly important as it can affect the living of ones current and future. Therefore unlike other choices, there are prioritized factors that are considered. These are the readiness and restraint factors. Peacock (2004, p43) states that high need for achievement and general self confidence are required to try something new and uncertain. However in...
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...Marketing a Business BUS 100 March 3, 2013 Creating, Financing, and Marketing a Business A partnership is a voluntary agreement under which two or more people act as co-owners of a business for profit (Kelly & McGowen, 2012, p. 76). There are some advantages of this form of agreement whereas each partner has the right to participate in the company’s management and share in profits and losses, but also has unlimited liability for any debts the company incurs. A partnership is easier to establish compared to a corporation. Each partner will share start-up cost, and reciprocate support and motivation. Partnership earnings that pass through the business are taxed only as the partners’ personal income. In contrast to, unlimited liability, partners are jointly and individually liable for the business activity of the other. If a partner withdraws from the partnership, he is still responsible for any debt the business had at the time of withdrawal, it does not matter who created the obligation. Decisions are shared and differences of opinion can lead to disagreements, which can lead to one partner buying out the other. The various funding options for small businesses offer an individual an alternative to partnership. Federal, state, and local governments have all created government subsidy or incentive programs try to facilitate small business funding. Commercial banks and private investors also play a key role in funding small businesses. The business owners often...
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...Discussion paper Do you agree with the concept that there is only one social responsibility of business- to use it's resources and engage in activities to increase it's profits so long as it stays within the rules of the game, which is to say, engages in free and open competition without deception or fraud? I feel that businesses have an obligation when it comes to social responsibilities to not only act ethically but to act responsibly when it comes to all business engagements. I don`t agree with the Idea of a business being created just for the idea of making money but I believe that the core of each business should be to improve the lives of others and their surroundings. If the cocept of others are placed in the heart of each business and if the businesses abide by it, then the amount of deception, fraud, and the lack of ethics that may be found in business today will dramatically decrease.I don`t think that there is only one social responsibility of a business but there are a few responsibilities that businesses should take in and apply. I can`t think of all the responsibilities because it can change do to the nature of the business, but a couple things that should always be the priority for all businesses are to take care of the workers and the customers. If the business can keep their workers and the customer happy, then it will be a foundation for a successful business."A firm that consistently fulfills its social obligations makes itself a desirable member of the community...
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...Business Ownership Name: ACC/561 August 6, 2012 Instructor: Business Ownership The biggest decision an individual can face is with when starting a business is selecting the type of business he has interest in. Will his business be a sole proprietorship, a partnership, corporation, or limited liability company. Each of the four business types has many advantages and disadvantages regarding taxes and liability. The individual who wants to start-up the business should take into consideration many factors concerning cost, control, and the amount of risk he is willing to assume. Sole Proprietorship is the most common type of business. Sole proprietorship is the easiest type of ownership and is the easiest to enter and leave. The benefit to a sole proprietorship is cost of start-up is low, owner controlled, and profits go to the owner. The tax advantages are the individual is not paying separate from his personal taxes the taxes are generally lower for the sole proprietor. The disadvantages of a sole proprietorship are limitless liability, if the business has one owner the business could close if the owner passed away, and it may be hard to raise capital. If more than one individual join to start up a business, the advantages and disadvantages increase. ...
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...Proprietorship A sole proprietorship is a business that is owned by one person. This person may operate the business or he/she may contract the work out to another individual. The owner makes all the decisions concerning the business regardless of who actually performs the work. The limitless and peerless accountability is one of the key characteristics of the sole proprietor. Advantages of a sole proprietorship Some of the advantages of a sole proprietorship are the simplicity and autonomy of starting and maintaining a business. Once all of the proper state and local licenses and permits have been applied for the business is now operational as the sole owner sees fit. This also leads to a flexibility that allows the owner to make decisions as he/she chooses. Another advantage is sole gain. Since there is only one owner, then there is only one person to gain from the profits. Disadvantages of a sole proprietorship Oddly enough, the disadvantages of a sole proprietorship stem from the very reason that makes it so attractive – the complete identity of the business with its owner. If the owner does not already have the personal wealth needed to start up a business, he/she may find they have limited resources. If the sole proprietor seeks funds from outside investors, then the business ceases to be a sole proprietorship. This is the reason sole proprietorships tend to be restricted to small business ventures. Another disadvantage is the business is limited to the knowledge, skills...
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...Environment of Business Latasha Y. McMaster American Intercontinental University Abstract There are three types of Business: Sole Proprietorship, Partnership, and Corporation. In my opinion based on the scenario for this paper a sole proprietorship is the best option for starting a business. The inventor does not have to funding to back up the invention but thinks that the invention will be successful. The best way to start this business is to start small and if the product does well then the owner should expand the company. Legal, Social, and Economic Environment of Business There are three major types of business and the all have their advantages and disadvantages. A sole proprietorship is a business that is owned and operated by one owner. A partnership is a business that is owned by two or more owner and the financial burden is split between the owners of the company. The final type of business is a corporation this type of business has property rights and separate status from the owners, and they are financially responsible. A sole proprietorship is a small business that is owned and operated by one individual. The advantages of a sole proprietorship are low startup costs, freedom to be you own boss, and easy forms to fill out. There are some disadvantages as well which are being personally responsible for the debts of the company, and it is harder to barrow the money for the startup cost. The businesses that are around today also started small and became bigger...
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...3/18/2014 Angel Investors A number of small start-up companies need external funding to operate and expand. When entrepreneurs have drained money from friends and family, personal savings, bank loans, and credit cards for their startups, they may search for angel investor’s aid to strive in these competitive environment to grow. According to the Center for Venture Research at the University of New Hampshire, approximately 2/3 of funding for new businesses is achieved from angel investors. Therefore, one commonly-deployed strategy for raising capital at the early stages of an enterprise by entrepreneurs is finding an Angel to invest in their business, idea or in their strong business plan. Angle investors are typically a high net worth folks who are or were successful entrepreneurs and business people. There are many types of Angel investors. The main three types are Core Angels, High-tech Angels and Return on Investment (ROI). Core Angels are investors who have accumulated years of experience from running and operating their own successful business. They work hard and are dedicated to their job of angel investing. They carry on to high risk investments without looking back at their losses. Usually, they are not focused on a particular industry and invest in verity of industries, including public and private equity such as real state. They assist and get involved in companies they invest in by mentoring and giving wise advices. High-Tech Angels are typically or have less...
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...The Financial Business Plan of an Ideal Company Dianna Schrock Instructor: Jeff Bloom AIU Applied Business Mathematics December 13, 2015 1. Banking and loan arrangements Since this is a small business start-up with little financial requirement, we would opt to go for a microloan program since this will be easier to acquire and does not require too much collateral and will just require personal guarantee of the three of us, as the business owners. This will enable us acquire basic facilities for starting such as Machinery, furniture and fixtures, and working capital. Microloans will also facilitate flexibility on repayments as we plan to start repaying the loan after two years, monthly for approximately three years, since we expect the business to start generating profits within the first two years of operation. We would prefer to go for the Small Business Administration Loans since this will require us to pay within six years. To ensure accuracy and sufficiency of funds, we shall first establish all the assets that will need to be acquired before the start-up, obtain the average cost listing from possible vendors and compute the total cost requirements for these assets. We shall also calculate the total overheads that shall be incurred for the period that the Business will not be expected to generate profits and sum them up. The totals of these will hint us on the total cost requirement, which has already been estimated at $50,000; the amount that we shall...
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...Small Business Management Joseph Lofoco Strayer University Professor Willie Robinson October 31, 2010 Abstract In this paper I will answer the following questions about My Friend’s Bookstore Plan: 1. Describe what would happen to the cash position and cash flow of My Friends’ Bookstore if the owners decided to open another store. 2. Is My Friends’ Bookstore a good candidate for franchising? Explain and defend your answer. 3. Describe what the owners would have to do to prepare to franchise their business. 4. The three partners own the bookstore equally. What are some of the difficulties they may encounter in sharing management duties equally? 5. What processes might the owners put in place to clarify their duties as equal partners? Small Business Management 1. Describe what would happen to the cash position and cash flow of My Friends’ Bookstore if the owners decided to open another store. The cash position of My Friend’s Bookstore would decrease if the owners decided to open an additional store due to the amount of cash or equivalent instruments held during this transition would transfer to the other store to initiate the start up of this business and the start up costs would most likely be taken from...
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...starting up a new business or buying an existing one in New Zealand. We will begin by explaining why new ventures appear attractive to those entering the world of business, and then describing the more undesirable aspects of new start-ups. We will then continue on to explain the benefits of purchasing an existing business, and then the downfalls of this approach. Lastly, we shall compare the two options and arrive at a summarising conclusion. Making the transition into becoming a business owner in New Zealand can be highly beneficial for many people; however the appropriate groundwork and research must first be completed in order to make informed decisions regarding how the business is going to pan out. Starting a new business is an attractive option for many New Zealanders as it offers capacious benefits and a potential vast improvement in lifestyle. Some of the advantages available include increased income, tax benefits, flexibility and the ability to determine all aspects of the business. Sole proprietors and owners of companies can increase their income exponentially if the business is a success, which can be a great improvement if one is unhappy with the wage they are on in their current employment. Business owners can legitimately use the tax system to their advantage, for instance if one decides to work from home, they have the option to write off a percentage of their rent or mortgage, as well as their utilities and practically anything that is related to the business, thus...
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