The paper "Crucial Issues Concerning Business Management " is a great example of management coursework. Setting up a business comes with its own anticipation and excitement. However, there is more to setting up a business than picking up a location and a name for the business. For one to start a successful business, one has to have the knowledge of the form of business unit they need to start, the market in which their business will be engaged in, understand what management and finance accounting means to the business and also be able to identify the long term, short term and medium term sources available to finance the business for it to be able to achieve the set goals.
This knowledge is crucial to anyone starting a business especially if they do not have a background in business management. This report will analyse and evaluate these crucial issues concerning business management and provide the required knowledge to set up a business. Forms of Business Units The form of business takes is determined by factors such as the person contributing to the capital of the business, the person contributing other resources, the person who controls and coordinates activities and the implementer of all operations in a business.
All these factors determine the ownership of a business. A business can be owned by a single person or can be owned by two or more individuals who determine what form a business will take. In relation to the ownership arrangement, there are several forms that a business can take. They include; sole proprietorship, partnership, Limited Liability Company, corporation and joint-stock companies (Dlabay & Burrow 2008). Sole Proprietorship This is a form of a business unit which is owned by a single individual.
There is no separation of ownership in such a business and the owner manages the business relying on his own knowledge and skills. There is no sharing of profits and losses and the liability is unlimited. The power to control completely lies with the owner (Dlabay & Burrow 2008). A sole proprietorship has its own benefits and limitations. One of the benefits of this form of business is the fact that it is easy to form due to the few legal formalities required.
The form of business also allows the owner to give a personal touch to the business. Also with this business decision making is easy since the owner does not have to consult any other person. The business is also flexible and allows the owner to bring in changes. Since it is controlled by a single person, it is beneficial in that it is easy to have better coordination, safeguard the secrets of the business and allows for equal distribution of wealth Dlabay & Burrow 2008). Though the benefits stated above makes the sole proprietorship seem effective, efficient and convenient, the business has its own limitations.
Since it is managed by one individual, funds and managerial talent might be limited which creates great limitations to the business. Also, the lack of continuity and the fact that liability is unlimited possess great limitations to such a business and may lead to its failure (Dlabay & Burrow 2008).
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Glynn, JJ & Murphy, M 2008, Accounting for Mangers. London: South-Western Cengage Learning.
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