business management

• Legal form of ownership

  The most important decision to be made is the selection of the type or form of enterprise
• Considerations when choosing a form of enterprise

  • Size of the business
  • Nature of the proposed business activities
  • Participation style
  • Management structure
  • Financing needs
  • Accountability of participants
  • Tax and legal implications
• Sole proprietorship


  A business that is owned and managed by one individual
• Partnership


  A contractual relationship between two or more persons, called partners, who operate a lawful business with the object of making a profit
• Close corporation


  The core characteristic is that it is closed in the sense that the members both own and control the close corporation
• Company


  Developed to meet business people's need to obtain more capital than they could through a sole proprietorship or partnership
• Business trust


  A trust that has the object of conducting a business in order to generate a profit
• Co-operative societies


  An autonomous association of persons, who unite voluntarily to meet common economic, social and cultural needs by means of a jointly owned and democratically controlled enterprise
• A business plan is developed for a new venture
• Considerations that determine the amount of planning needed for a business plan

  • The style and ability of the entrepreneur
  • The preferences of the management team
  • The complexity of the product or service and of the business
  • The competitive environment of the business
  • The level of uncertainty in the business environment
• The description of a new venture in a business plan should address questions such as: Is this a start-up, buy-out or expansion? What is the business's mission statement? Has this business begun operations? Or when will operations begin? Where was this business started? What is the basic nature and activity of the business? What is its primary product or service? Which customers are served? Is this business in manufacturing, retailing, service or another type of industry? What are the current and projected states of this industry? What is the business's stage of development? Has it begun operations? Is it producing a full product line? What are its objectives? What is the history of this company (if applicable)? Which achievements have been made to date? Which changes have been made in the structure or ownership of the existing business? What is the firm's distinctive competence?
• The final section of the chapter dealt with the most important location factors that the business must consider