Page 148 - Business Principles and Management

project:
MY BUSINESS , INC.

PROPRIETORSHIP OR PARTNERSHIP?
New owners often start a business without carefully considering other
possible forms of ownership. In this chapter, you will evaluate the advan-
tages and disadvantages of the proprietorship and partnership forms of
ownership for your new business.

DATA COLLECTION
1. Review copies of magazines written for entrepreneurs. Identify the
current issues and problems faced by individual business owners
as well as the successful operating procedures described in the
magazines.
2. Identify a person who currently is or has been a partner in a busi-
ness. Ask the person to describe the advantages and disadvantages
of operating a business as a partnership from his or her viewpoint.
3. Go to the U.S. federal government Web site or your state government
Web site to research the advantages and disadvantages for proprietor-
ships and partnerships in your state. Develop a list of pros and cons
for each legal form.
4. Using the Internet, if possible, find a sample copy or outline of a
business plan. Speak with a banker or your business mentor about
the importance of business plans for new businesses. Ask that per-
son to describe the elements he or she feels are most important in
a good business plan.

ANALYSIS
1. You have found a partner who wants to invest $6,000 and become
involved in the operation of your business. You have already invested
$12,000. Develop a simple partnership agreement for the business.
After you have completed the agreement, ask your business mentor
to review it with you.
2. Develop a chart that compares the proprietorship and partnership
forms of business ownership for your business. Be certain to consider
financial, personal, and management factors. When you have finished
the analysis, decide whether you will remain a sole proprietor or
form a partnership.
3. Develop an outline for a business plan for your new business. Begin
to list the information that will go into each section of the plan.
Identify the information you need to complete the business plan and
the sources of that information. Continue to develop the business
plan during the time you are working on this continuing project.
4. Given the business plan you developed above, outline the specific
skills that are needed to make your business successful. Evaluate
your skills and resources that you can bring to the business. Identify
other skills or resources that a partner will need to bring in.

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