Identify the pros and cons of the partnership as a form of ownership.
A partnership is a free will agreement made between two or more people for a business that makes a profit, and all parties involved play the role of co-owners. The most common partnership is known as a general partnership. In a general partnership all parties have the right to participate in the administration process of the company and shares of the profit, and each partner is equally responsible for any liabilities that the company endures.
There are so many advantages of having a partnership like the satisfaction of having someone to share in the burdens of running a business. This will allow flexibility for them to ...view middle of the document...
Because a person withdraws from a partnership they will still remain obligated to the debts of the firm at the time of withdrawal; even though the actions were created by their partners.
Discuss the funding options for small business.
Entrepreneurs have many different ways to fund their business. The most common method is the entrepreneur using their own personal resources. They may use money from their savings accounts, credit cards, or small personal loans from family members. Using your own money is very risky in today’s economy. Because if you don’t have a successful business you will lose everything that you had. Plus you will be financially ruined if you are unable to pay the credit card company in a timely manner. Their outrageous finance charges would be very difficult for an entrepreneur to try and regroup from in a timely manner.
Commercial loans are another option for entrepreneurs to get the start-up money that they need to establish their new business. It is a very tough challenged for the beginning entrepreneur because lenders are not willing to lend money to a start-up company without a proven track record. To be quite honest to get a loan from them requires too much of a hassle. The lender wants you to fill out a lot of paperwork and the approval wait time is ridiculous. If you are under a certain time restraints this could be a major downfall. You must also have 25-30% down payment money because they are not going to give you 100% financing. It is a good thing that entrepreneurs can reach out to the Small Business Administration (SBA) for lending assistance. The SBA will not give entrepreneurs free money, grants, or interest free loans, but the will partially guarantee them a loan from a commercial lender. This will reduce the risks for the lender and greater the chances for the entrepreneur to receive a loan from them. SBA also offers a microloan for about $13000 from non-profit organizations within the community to assist entrepreneurs with starting up their business.
If an entrepreneur has the potential to grow their company by 30—40% within a year time span they can reach out to an angel investor to receive the money they need to start-up their business. Angel investors are willing to invest in businesses with the potential to grow because they are looking to making more money for themselves. Since the economy is so...