Four Friends – Melanie, Elka, Victoria, and Joy – meet once a week to play euchre. During the course of one such meeting they began discussing the possibility of going into business together. Melanie, who is thirty-two years old, is currently working as a baker for Tasteful Bakeries, earning $25,000 a year. She loves her work, and has long dreamed of opening her own bakery. She even has a name picked out – BakeEm Fresh Daily. Unfortunately, she is a single parent raising two small children and does not feel she can afford to invest any of her approximately $5,000 in savings into such a business. Her friends, however, think that they may be able to help.
Elka, a sixty-seven-year-old retired principal, just won $200,000 in the state lottery. Also, she has $50,000 in retirement savings. Enjoying her retirement, she does not feel she would want anything to do with the day-to-day running of a business. However, assuming her money would not be at risk, she would be willing to invest up to $100,000 in the business.
Victoria, a twenty-two-year-old college student recently inherited a small two-story building, worth $70,000, in the downtown area that could easily house a bakery. She would be too busy with classes to help run the business, but she would be willing to let the others use her building to house the bakery.
Finally, Joy is twenty-six years old. She currently works odd jobs for a local housekeeping company. However, she feels that she is a born salesperson and manager. Of the $15,000 she has in savings, she feels she could contribute up to $8,000 toward the business. She would love to quit her current job, at which she earns $17,000 a year, to serve as the bakery salesperson and manager.
Based on all the different types of business organizations we have covered over the last several chapters, you need to discuss each parties concerns, interests, etc. and determine what would be the best type of organization they should create.