Assignment 1 - Structuring a Business
It's been a dream to own a business. A friend Ravi has developed a product called Sunburst that could be used by the growing solar energy industry. Tanya, another friend, has experience in marketing. The three of us decide to pursue as a startup team for Sunburst. The startup team needs to discuss the legal form and organizational structure of this business.
The startup team will need additional investors and expertise to get the business off the ground, Ravi says. We should develop a business plan that will be attractive to potential investors and partners. They're going to have concerns about joining a new startup, Tanya says. We should work to address these from the start.
Prepare a PowerPoint presentation for potential investors. Let them know what legal form the business is going to take and explain what and why it will work for the company. In this analysis, include personal liability, taxes, interests of contributing parties, and management of the business. A thorough research needs to be accomplished with the above information.
The startup group needs to decide on what organization structure would best serve these goals. Innovation and timely customer service are the top priorities for Sunburst. The startup will need staff to handle product development, production, finance and accounting, and marketing and sales.
The startup will definitely need human resources function. Outsourcing needs to be included in the plan. Develop a clear mission statement and an organization chart and explain the rationale for these decisions in a short paper. Be detail-oriented and concise.
In this assignment determine the best legal form and organizational structure for a new business. The nature of the organization's business and the environment the business operates in are factors that must be considered. Initially, Sunburst will operate locally, but within five years operations will go national (or international). Determine how to plan these stages in Creating and Managing a New Business.
In the first part of this assignment, create a narrated PowerPoint presentation (15 slides- all slides written narrated) for potential investors and partners in the new company. In this presentation, analyze the pros and cons of various forms of business and recommend the best legal form of business to achieve the organization's goals.
In the second part of this assignment, design an effective organizational structure for the business at its inception and in its next phase of growth. To achieve this, create one short paper with three sections: (1) a brief mission statement reflecting the primary goals of the business, (2) a detailed organization chart, and (3) a rationale statement that explains and supports, thoroughly but succinctly, the mission statement and structural decisions reflected in the organization chart.
Ensure it meets the competencies listed below.
Create neat and professional looking documents appropriate for the project or presentation. Create clear and concise written messages. Develop well-reasoned ideas, conclusions or decisions, checking them against relevant criteria and benchmarks. Analyze the legal forms of business organization and make recommendations to support business decisions. Design organizational structure, systems and processes that support the strategic goals of the organization. Make strategic managerial decisions for obtaining capital required for achieving organizational goals. Create and implement new initiative or enterprise. Create and manage a new enterprise.
Creating and Managing a New Business and Managing a New
Consider when creating and managing a new business. Planning a business involves many considerations, including:
- Choosing a business entity type
- Registering with required government agencies
- Acquiring licenses and permits
- Opening bank and credit accounts
- Adopting management agreements
- Adopting a business plan and organizational structure
- Adopting a marketing plan
- Developing a mission statement
- Developing a code of conduct or ethics code
- Joining relevant professional organizations
- Choosing a stakeholder set of employees, customers, suppliers, advisors, and investors
Instruments such as management agreements, mission statements, business plans, and codes of conduct must be completed.
Transferring business from local to national or even international involves many additional considerations of management, structure, tax, law, culture, and strategy. Consider key elements when successfully expanding to other markets. Consider international expansion to transition to other markets. Moreover, consider cultural norms of targeted markets when attempting to expand beyond local distribution.
Step 1: Determine the Legal Structure of Your Business: Gather and Analyze Information
Require a written narrated (written narration in the notes for each slide) PowerPoint presentation to potential investors that will address all of the issues involved in making this decision. For critical background information, see Creating Sunburst: Legal and Organizational Considerations below. You will need this information to make the best legal and organizational decisions for your business.
Answer these questions and include these explanations in the powerpoint presentation. What types of business organizations are available to entrepreneurs? What are the advantages and disadvantages of each alternative? What are the two best choices and why? How would you explain your choices to your investors?
Be sure to discuss the following information in the plan (refer to Legal Forms of Business):
What are the different legal forms of business that you might consider? You remember that there are at least six factors that will influence your choice: 1. creation and maintenance 2. Continuity 3.ownership and control 4. Personal liability 5. Compensation and division of profits taxation 6. What is your proposed choice for the legal form of business? Include your reasoning based on the preceding six factors and any other relevant factors.
Creating Sunburst: Legal and Organizational Considerations
Ravi, who has a degree from State University in mechanical engineering, was previously employed by a start-up firm in New York City. He worked long hours for little pay, but when the business sold, his stock options paid off. As a result, he now has some time and $100,000 to invest in Sunburst. More importantly, Ravi has the knowledge and know-how to setup and manage production. Tanya, a friend you met through your alumni association, has a degree in marketing and has a few years of experience working in marketing roles. The three of you agree to form the start-up team for Sunburst.
The team estimates that it will take approximately two years to develop Sunburst into a marketable product, but that once the product is on the market, there is excellent growth potential. The startup team will need additional investors and expertise to get the business off the ground. Develop a plan for a business firm that will be attractive to potential investors and partners, and will address their concerns.
The start-up team believes that the business will need someone with finance skills. You also need a visionary CEO. Ideally, this person should have connections and experience in the solar industry. You have asked Elon Helios, a forward-thinking figure in the solar energy field, who is known for being a rainmaker. Helios has expressed some interest, but it will take significant incentives to get him on board.
Although Tanya has little money to invest, she has excellent networking skills, and she has found a potential investor, Carmen Santiago, who thinks that the product may have potential. Santiago does not want to be involved in running the business.
Ravi has identified a good candidate with finance experience. This individual does not want to invest in the company, but he would expect a good salary and benefits.
The team has created a tentative business plan, which has two target stages: The first stage involves local (geographical region) manufacturing with a focus on local solar energy providers; the second stage will begin five years from start-up, at which point the business will expand nationally (or possibly internationally) targeting the market of all potential solar energy customers.
The potential investors and participants want to know what legal form the business will take before they agree to participate. Prepare a presentation for the potential investors.
Legal Forms of Business
Business entities are an integral part of business practice and economic productivity. An effective business practitioner must understand the characteristics of the major types of business entities, as these attributes can dramatically affect the nature of the business's relationships. Before beginning to conduct business, one should always weigh the benefits and burdens of the different types of business entities and make a conscious decision about which type of entity to form to conduct one's business.
Depending on the type of business, the people involved, and the goals of the business, some entities may be more appropriate than others for a particular business. To make the decision about the appropriate type of entity to form, one should consider factors including the following:
- Creation & maintenance-the effort associated with forming and maintaining the entity
- Continuity-the continuity or stability of the organization upon given occurrences
- Ownership & control-the ownership rights and control of those involved with the business
- Personal liability-the potential for personal liability of those involved with the business
- Compensation-the compensation and division of profits among business owners
- Taxation-the taxation of the organization's earnings and its distributions of profits to the owners
Weighing these and related factors, which vary in consequence depending on the entity, informs the choice of the type of business entity best suited to one's business. Examination of these characteristics will make obvious the effect of these attributes on stakeholders of the business entity. The decision of which entity is right for a particular business impacts many facets of a business's operation, including accounting, management, and finance.
In ASSIGNMENT 1
- Include a title slide, introducing the powerpoint presentation.
- On the presentation slides (narration in the notes for every slide), include only the major bullet points for each issue.
- Accomplish 15 powerpoint slides (not counting title page or references list).
- Cover all the elements of your plan as outlined in Step 1.
- Use written narration to provide the supporting rationale for each major bullet point.
- Include a script of the narration in the notes section of PowerPoint.
- The final slide must present a clear summary and of your major conclusions and any recommendations.
- Include a reference page in APA format citing any sources you used to develop your presentation.
ASSIGNMENT 2 - Determine Your Organization's Structure: Gather and Analyze Information
Now decided on an organization structure. Organization structure determines such things as what departments the organization will need, who will report to whom, how many levels you will have in your organization's hierarchy, and how many individuals will report to each manager (span of control). An effective structure should promote communication and coordination of efforts across the entire organization. See: Organization Structure and Design below.
Answer the questions below reflected in a short that includes the mission statement, organization chart, and the rationale for recommendations.
1. Sunburst's primary goals are innovation and customer responsiveness. How should your mission statement articulate these goals? How can this statement be drafted so that it is clear, concise, and meaningful to organization stakeholders?
2. What key tasks must be accomplished in order to meet the organization's goals? What individuals or groups will have responsibility for delivering these processes or items?
3. Will individuals have titles and, if so, which individuals? What will those titles be?
4. To whom will individuals report? Why?
5. What are the possible impacts of outsourcing the HR function? What are the pros and cons of doing so? Make a recommendation in your paper. If you decide to keep HR in house, make sure its place in your business structure is reflected in your organization chart.
6. Consider all other relevant factors (for example, will your business structure be functional, centralized, or decentralized, etc.).
When you have formulated your preliminary thoughts and questions, begin your research. The resources below are a good start, but you should also conduct your own research to enhance your knowledge and the final product.
When your research is complete, continue to the next step, in which you will write your short paper, which will include a mission statement, organization chart, and summary of the rationale behind your decisions.
Organization Structure and Design
The structure of an organization plays a pivotal role in how everyday tasks are handled, in how resources are allocated, in employee supervision and reporting, and in coordination amongst employees. It impacts employee behavior, demeanor, and psyche in ways that are still being studied by theorists today. Organizational structure may play a role in employee motivation and even productivity.
A primary factor in creating and managing a new business involves choosing the best organizational structure for it. Some types of business are better suited for a clear hierarchical structure, while others are more apt to work within a flatter organizational structure, with fewer or even no levels of authority. From time to time, a business may reorganize, as online shoe retailer Zappos did when moving from a hierarchy to a flatter "holacracy." There were reportedly mixed results spurring from this major shift in business structure.
As the Zappos case and others reveal, business structure plays an integral role in organizational success. Thus, one should clearly define the initial organizational structure at the outset of starting a new business and monitor it through the business life cycle, tweaking it and shifting it as necessary.
References - Reingold, J. (2016, March 4). How a Radical Shift Left Zappos Reeling. Retrieved February 07, 2017, from https://fortune.com/zappos-tony-hsieh-holacracy/
In ASSIGNMENT 2
Assemble a short paper that contains the following:
- mission statement of no more than one paragraph
- organization chart
- the rationale, write five pages (12 point type, double-spaced), for the mission statement and organization structure as displayed in the chart
Be sure to attribute any sources (Cite all source in References and in text) used in the creation of any of the documents you submit.
Include a reference page in APA format citing any sources you used.