Discussion Board Forum 3 Case Study.docx

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Running head: Discussion Board Forum 3 Case Study 1 Discussion Board Forum 3 Case Study Liberty University
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Discussion Board Forum 3 Case Study 2 D ISCUSSION B OARD F ORUM 3 C ASE S TUDY General Input of Starting a Coffeehouse Starting a coffee shop is very exciting for Shania Jackson. Some of the recommendations in this paper come from two studies on why businesses have failed. When looking at these studies, some common issues are found. The first study, researchers propose ten top reasons for failure, categorized as follows: lack of experience, insufficient capital, poor location, poor inventory management, over- investment in fixed assets, poor credit arrangement and poor credit management, personal use of business funds, unexpected growth, competition, and low sales. (As cited by Parsa, H. G., van der Rest, Jean-Pierre I, Smith, S. R., Parsa, R. A., & Bujisic, M. 2015) These ten reasons seem for reasonable on why their business failed. As in the case with Shania Jackson, she lacks the experience of running a coffee shop. She could easily fall into several of these business traps. The second study, the ten most common reasons they gave were undercapitalization and high fixed cost, slow economic activity or recession, creditor problems, slow accounts receivable, tax problems, loss of a major customer, poor management, partners, over-expansion, and theft. (As cited by Parsa, H. G., van der Rest, Jean-Pierre I, Smith, S. R., Parsa, R. A., & Bujisic, M. 2015) Both of these studies give reasons for why small businesses fail. I wanted to clarify why I will be giving the following recommendations as we want to avoid some of these reasons on why businesses fail. Business Forms In the case of business forms, I would recommend forming a Limited Liability Company. Here are the reasons for and against each, but due to the liability and the characteristics of each it is recommended that an LLC is the starting point.
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Discussion Board Forum 3 Case Study 3 A sole proprietor is an easy way to start a business. Sole proprietors were more likely to cite cost of startup as the primary factor in choosing this entity type for their new business. (Hertz, G. T., Beasley, F., & White, R. J. 2009) This is likely due to the simplicity and low cost of starting a sole proprietorship compared to the other forms of business. (Hertz, G. T., Beasley, F., & White, R. J. 2009) The sole proprietor also faces the liability if something happens and can be sued personally. For the reason of personal liability, this type of business structure would not be
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  • Fall '10
  • SELF
  • Limited Liability Company, Shania Jackson

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