Evaluate the issues that need to be considered when starting a business

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D1

Unit 16: Business Enterprise                                                              Red Group 11A/Eb1

Asid Ashraf 11L

Assignment 7 (D1)

Scenario: 

Although I am still at school I have had a really good business idea. I now need to investigate all aspects of setting up a small business. All the tasks in this module relate to this same scenario.

 Task 9: Evaluate the issues that need to be considered when starting a business.

You should assume that you are advising other members of the group about setting up a business. You should present an objective evaluation of all the aspects that you have learned about that should be considered if they were to start up and run a business. You should ensure that you include the strengths and weaknesses of all relevant aspects and explain these- for example the benefits of using one source of finance over another of the suitability of using a particular method of promotion in a certain circumstance.

Ownership: I have decided that the ownership for my business A’s Ice Cream Parlour Shop is partnership. This is because I will need specialist staff to be working in the shop, they will need to be specialised in certain aspects such as manufacturing, finance and production. The partnership of my business must follow the procedures and the policies by HMRC. It is advisable for my business that a business agreement e.g. A ‘Deed of Partnership’ is drawn up by a solicitor. This will cover such things as duties and responsibilities, percentage of the profit, initial investment and decisions that us partners need to agree on. Many partnerships have sleeping partners. These are business partners who put money into the partnership, but do not play an active role in the running of the business.

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Legislation: A partnership must also follow the same procedure and the partners must notify HMRC of their existence. It is advisable for a Partnership Agreement to be drawn up by a solicitor. The profit legally should be divided equally between how many partners there are in the business. Duties and responsibilities should be done fairly. Also business name and the names of the partners, the type of business and business address, the deed will usually set out:

  • the amount of capital that each partner is to contribute to the business
  • the way in which profits or losses are shared between partners, ...

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