Organization for a business activity, managing, liabilities
You and three of your close friends have discussed plans to open a pizza restaurant with a delivery service. You intend to attract to your business young professionals who live and work near the downtown area and who are healthy and fitness-minded. You and your co-owners agree that each will invest equally in terms of time and money. However, in addition to contributions and “sweat-equity” made by each of you, another $400,000 is essential for the restaurant to succeed.
1. What type of organization is best suited for this business activity?
2. What steps would you take to manage the restaurant during times that you and your co-owners are not present?
3. What liabilities do you and your co-owners face?
Be sure to draft your answers in paragraph form, discussing each question thoroughly. You will also need to reply substantively to a classmates’ posting. Remember that the questions may be asking you for your opinion, and not necessarily a specific answer from the text. Use your new knowledge to work it out!
ANSWER
Organization for a Business Activity, Managing, Liabilities
- What type of organization is best suited for this business activity?
A partnership will be suitable for this business operation. A partnership business entails two or more individuals who have combined resources to form a business and settle on sharing the profits, risks, and losses. The partners may contribute capital, time, and expertise. The partnership offers unlimited liability, which means that the parties pledge their capital contribution and their assets used in case the business suffers a loss (Robison, 2021). Therefore, the partnership will allow all the parties involved in the business activity in terms of investment to jointly operate and manage the business operations. The partnership will allow mutual sharing of resources, expertise, and contribution to running the business, thus lightening the responsibilities and workload.
- What steps would you take to manage the restaurant during times that you and your co-owners are not present?
To successfully manage the restaurant, there is a need for a restaurant manager who will oversee the operations when the partners are not available. The restaurant manager can coordinate the daily restaurant management operations, manage employees, manage inventory, check on the safety regulations of the restaurant, as well as handle employee and customer complaints and all the management roles within the restaurant. One of the main benefits of having a restaurant manager is that they will facilitate continuity of the restaurant operations and eliminate loss of opportunity. The restaurant manager will ensure that the restaurant runs efficiently and smoothly by managing employees and safeguarding the restaurant’s profitability.
- What liabilities do you and your co-owners face?
The partners face unlimited liability for all the actions taken in the venture, including all the liabilities and debts accrued by the business. If anything goes wrong, the partners are responsible for the compensation (Robison, 2021). The liability of the partners is not limited to capital investment since they pledge not only their capital but also their wealth. The partners are liable for all the restaurant’s losses and the employees’ actions. For instance, all the partners are liable for the restaurant’s debts in equal shares or any obligations incurred through the business operations.
References
Robison, L. (2021). Alternative Forms of Business Organizations. Financial Management for Small Businesses, 2nd OER Edition.
