Term Paper on "Creating New Business"

Term Paper 4 pages (1540 words) Sources: 1+

[EXCERPT] . . . .

Creating New Business

The Elements of Business Formation

Early in a company's evolution much should be decided as a foundation for doing business. The nature of the company's business practices and product it represents defines the company's core values and basic spirit. It is important to establish this basis early on in order to build and nourish the business in a successful direction. Only then can a company enter into the market place with any real hope of remaining competitive. This theme should be considered when looking at Joe's Tree Trimming business. It seems this business has started on whim without much planning or organization of how the business will run. When regarding Joe's business practices and vision, much should be considered in order for the company to have a greater return on investment and ensure continued success. This paper will explore the basic elements needed for business formation while considering vision, legal issues, team-building skills and the legal entity chosen to make the business work.

Scenario

Joe operates a commercial and tree trimming business. Joe is very successful and has enough clients to keep him busy, along with a least 50 workers, working six days a week. Occasionally, a client rents a piece of equipment from Joe's business. Clients sometime take their time paying for Joe's service and, therefore, Joe is sometimes late paying his bills. Joe's capital is only about $250,000, most of which consists of trucks and earth moving equipment worth approximately $200,000, plus an extensive assortment of lawnmowers, chainsaws, edgers, and other landscaping equipment. Last year's revenue exceeded $500,000. Many of the employees are seasonal and turnover is high.

It is clear Joe has a small business blunder on his hands. He needs to get organized. He needs to implement a reliable team both for the field and the home office. He needs to have an accountant staff to pay attention to his cash flow. He may even need a reliable mechanic to keep the machines in top condition. These few ideas open up new issues for Joe and his future successes. First he needs to decide what is the best way to manage his company. Does he want to take on a partner or brave the risk alone? What kind of vision does he have?

Legal Entity Choice

At this time, it seems the sole-proprietorship is the best legal entity choice for Joe at this time. In fact, the Small Business Administration Online Journal (2005) comments this method is widely used as a "vast majority of small business start out as sole proprietorships" (par. 3). With this method Joe will be the sole owner of the operation. This will give him the most freedom to make all the important decisions and allow for him to develop his vision on greater levels. He would also own all the assets of the business and the profits generated by it. Of course, there is a drawback in that he also assumes complete responsibility for any of its liabilities or debts. Still for him, right now, this is the best choice because he does not have a reliable partner to share in the expenses nor does he want to share his vision of the future.

Company Vision

Joe's vision from the beginning has been a bit haphazard. He has not been able to focus on vision but only the day-to-day management of the company. He needs to focus on the potential this business has for bringing quality lawn care to his area. He can do this by positioning himself in the traditional brick and mortar setting of the retail store while taking advantage of new technologies like the World Wide Web and the Internet. He can create a mass marketing campaign to get the work out about his new company. He can use print media available such a simple phone book ad, newspaper ads and flyers. In this type of business, word of mouth is very key to success. So keeping a customer completely satisfied is very important. Still he can make use of the Internet a goal of the company. His main objective is to remain true to the customer in the quality services provided. Valuing the customer and understanding their needs, can have a direct relationship to the growth and success of his business.

Team Building

In today's company, small business owners have the responsibility to set goals, maintain morale, aid in training and communicating objectives as methods for building a team. A smart company will encourage leadership by example across the board. This instills in the employee a sense of pride and motivates them to achieve goals. A good owner provides vision and clarity for the employee. Such a leader will be able to communicate and create a repoire with their team. These elements when put into practice will help eliminate rapid turnover.

A business owner needs to exercise Emotional Intelligence when creating a relationship with the employee. An owner reflects successful leadership by allowing for complex relationships for team members by recognizing relationship building, capacity of visions and personal development. This intelligence means being able to read people, be read and allow for open dialogue. They are able freely share themselves and their stories. This connection begins at a fundamental level of human sociology where the use of story is central. Howard Gardner (1995) reflects, "the ultimate impact of the leader depends most significantly on the particular story that he or she relates or embodies, and the receptions to that story on the part of the audiences" (14). By telling stories, allows for a certain level of openness or vulnerability on the part of the leader and makes them human. By opening the line of communication, gives the employee knowledge of their environment and develops trust. This element is ultimately very important as it builds a foundation for hiring the right people the first time.

Legal, Regulatory and Safety Issues

When running any company, there are constant legal issues that need consideration. It is important to constantly watch the law books for potential change and stay one step ahead to ensure the customers come first. This might mean checking with local city hall to see if any ordinances have changed regarding noise and pollution. This may also include tax law, employee benefit practices and equal rights. Taking this type of diligence before the fact, will save Joe not only money, but also possibly legal trouble. If a situation should arise, it is Joe's duties to confess the mistake to the customers affected and negotiate immediately (Lardy, 2005). The company should strive itself to be the best by taking ownership and responsibility even in times of mistakes. They must take into account how they would feel when out in their shoes. In this respect, a proactive customer relation is key to damage control. Still the bottom line in many cases is that Joe in order to remain competitive must not only cater to the customer but also to the governing laws of the land.

Never before has safety and risk assessment of the workplace been more important to an organization. With skyrocketing costs of doing business on a national level and more attention placed on employee rights, it is imperative an organization take the time and investment to carefully plan a safe and risk free environment for its staff. This country put into place legislation that mandates how a business sets up shop and what responsibilities are shouldered by the employer. This legislation also outlines the inherent rights of the employees distinguished by any situation probable in the workplace. These rules and regulations are detailed and do not leave much room for interpretation by the employer. They must be followed in every step for a venture to even get off the ground and succeed. Failure to… READ MORE

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