An essay on how to set up your own business
Setting up a new Business
Ownership
The type of ownership for the business will be a partnership. This is the most obvious choice as there are two people involved, my business partner and me. A partnership can involve between two and twenty partners allowing for further expansion and more financial backing if needed. The partnership would be owned in a ratio of 60:40, me owning 60%. This means we would share the cash input and profits and losses in this ratio, which is bad in the short-term for me, but hopefully good in the long-term. A partnership brings additional expertise from all the partners. A formal partnership agreement would have to be drawn up to settle any disputes. The problems with a partnership are that there is unlimited liability meaning that it is possible to lose personal possessions e.g. car and house, and that there is limited cash input. Cash would only be available internally and with loans. The alternative was a private limited company (ltd.) which would have a larger financial backing and limited liability to the value of shareholding, but in the long-term there is less profit and less control when shareholders come in to the plan as well as high set-up costs. Limited companies also have to pay more tax.
Name
The name for the business that I have decided on is Europinia Tours, this conveys the message that the company operates in Europe and it also illustrates tours which can be linked to coach tours as this is the most obvious one. Added to this, the name is quite comprehensive in a number of European countries e.g. Germany, should the business wish to expand in to other countries.
Aims and Objectives
The main aims and objectives of the business are:
Short-term
To survive and break even by the end of year 1.
To cut in to the market and build a good reputation by providing a reliable and efficient service by no later than the end of year 4.
Long-term
To expand to a public limited company and widen the range of services in 10
Ownership
The type of ownership for the business will be a partnership. This is the most obvious choice as there are two people involved, my business partner and me. A partnership can involve between two and twenty partners allowing for further expansion and more financial backing if needed. The partnership would be owned in a ratio of 60:40, me owning 60%. This means we would share the cash input and profits and losses in this ratio, which is bad in the short-term for me, but hopefully good in the long-term. A partnership brings additional expertise from all the partners. A formal partnership agreement would have to be drawn up to settle any disputes. The problems with a partnership are that there is unlimited liability meaning that it is possible to lose personal possessions e.g. car and house, and that there is limited cash input. Cash would only be available internally and with loans. The alternative was a private limited company (ltd.) which would have a larger financial backing and limited liability to the value of shareholding, but in the long-term there is less profit and less control when shareholders come in to the plan as well as high set-up costs. Limited companies also have to pay more tax.
Name
The name for the business that I have decided on is Europinia Tours, this conveys the message that the company operates in Europe and it also illustrates tours which can be linked to coach tours as this is the most obvious one. Added to this, the name is quite comprehensive in a number of European countries e.g. Germany, should the business wish to expand in to other countries.
Aims and Objectives
The main aims and objectives of the business are:
Short-term
To survive and break even by the end of year 1.
To cut in to the market and build a good reputation by providing a reliable and efficient service by no later than the end of year 4.
Long-term
To expand to a public limited company and widen the range of services in 10