Directions: Be sure to save an electronic copy of your answer before submitting it to Ashworth College for grading. Unless otherwise stated, answer in complete sentences, and be sure to use correct English, spelling and grammar. Sources must be cited in APA format. Your response should be four (4) double-spaced pages; refer to the “Assignment Format” page located on the Course Home page for specific format requirements.
Part A: Jeremy has worked for a large lawn care company for several years. This lawn care company is located in a sunny climate, providing a stable demand year-round. After receiving an Associate’s degree in Business, Jeremy decides that he would like to start his own lawn care service. He is considering if it would be best to start a sole proprietorship or a partnership. Jeremy is considering asking either his father or a co-worker at the current company he works for to be a partner in his new lawn care company. Describe the advantages and disadvantages of a sole proprietorship and partnership in this scenario. Which form of organizational structure do you personally think is best for Jeremy? Justify your opinion with supporting facts.
Part B: Analyze the resources that the lawn care business owner Jeremy will need to start the business. Additionally, what factors might lead to failure with this specific type of business?

Business Structure Case Analysis

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Business Structure Case Analysis

Introduction

Jeremy’s decision to start a lawn care company is a big entrepreneurial decision that requires effective decision-making on the most appropriate structure and resources that maximize the success of the business. The success and profitability of a business idea require integrating essential key success factors, including the structure of the organization, operations or processes, human resource, and financial focus (Mills, 2019). Therefore, Jeremy should consider a limited liability partnership for his startup, integrate a hybrid-changing organizational structure that depends on the growth of the company, and incorporate both human and non-human resources. The success of the business is dependent on the knowledge and preparedness Jeremy has especially on factors from internal and external operating milieus as well as the factors associated with the success and failure of a limited liability partnerships business type.

Sole Proprietorship

Primarily, business structures are legally recognized organizations adopted among companies or businesses that shape business operations and legalize business requirements (Shah, 2018). When deciding on the most appropriate business type and structure, Jeremy must understand the benefits and limitations of sole proprietorship and partnership, which are his primary options. A sole proprietorship is the least complex structure and the most manageable involving a single owner and staff (Skripak, 2016). Advantages Jeremy can harness with this structure include fast and individual decision-making, as he will operate the business on his terms, even though he could seek advice from his colleagues and parents. Secondly, the structure is minimally regulated with less strict formalization, requiring only a permit, license, and probably insurance cover, depending on industrial registration requirements (Skripak, 2016). Financially, Jeremy will benefit from not paying income taxes, as the charges will be paid in his tax return, making it a more relaxed and cheap way to operate and maximize profits. However, possible disadvantages include limited funding capital, as starting the lawn business would require at least $30,000 (TRUC, 2020). Moreover, Jeremy will assume full liability, including debts, if he does not pay; his assets can be taken as collateral damage.

Partnership

On the other hand, partnerships involve an association of two or more individuals; in this case, Jeremy and his father, working as co-owners. A partnership can be general or limited; hence, using this type of business would result in both advantages and disadvantages for Jeremy (Skripak, 2016). Primarily, it is easy to start due to minimal legal obligations and restrictions, including simple accounting processes and beginning documents. Decision-making is better, diverse, conclusive, and partner dependent, whereby, through the father’s perspective, Jeremy can gain unique and essential knowledge. Ownership, control, and liability are joint, hence increased effectiveness and productivity, as they pursue interests as shareholders. Startup capital burden would be lifted, as his father would contribute to the $30,000, besides, profits, losses, and debts are jointly shared. However, the structure provides for dependent legal status, not unless the partnership is stopped, and liabilities are unlimited, as both partners are personally liable. One major disadvantage is susceptibility to conflicting interest, internal control wrangles and partnership differences, concerning strategic focus or direction, operations, and finances (Kamola, 2019). These disputes can harm the business, as relationships of Jeremy and his father would be involved.

Organizational Structure 

An organizational structure Jeremy should consider for his business type, preset operations, and growth opportunities is a flatarchy structure. Organizational structures process leadership nature, span controls, and employment structure to establish essential functions in an organization (Meyer, 2017). Since the lawn care business is a small business and startup, Jeremy can incorporate a hybrid-changing organizational structure, namely, a flatarchy organizational structure (Dobraca, 2015). The architecture combines functional or hierarchy and flat structures, whereby, in a flat structure employee are directly supervised. In contrast, in a functional structure, role-specific hierarchies are developed, thus, increased involvement and effective decision-making among the levels. Integrating this organizational structure will require Jeremy to develop flat teams, skill and job-specific with titles to show the idea or project at hand.  For instance, creating teams in finance, human resource, and services. The structure will help Jeremy’s business operate effectively in the present condition of having few employees and provide for disruptions in the future, as the lawn care company grows and evolves to explore other industries (Dobraca, 2015). Secondly, flatarchy will help Jeremy speed operations, operate better, and empower his employees.

Resources

The success of the lawn care business is dependent on both human and non-human resources, including financial, human, educational, physical, and technological resources (Henderson, 2019). Financial resources include startup capital, which will be achieved through a budget. For instance, if Jeremy’s budget is $30,000, he needs to show a budget for other resources and find ways to acquire the capital. If Jeremy decides on partnership business, the father can contribute equally or the highest share depending on their agreement, which makes it easier to acquire funds. Human resources Jeremy requires considering are employees with skills, talent and strength to form productive and engaged teams. Educational resources are also necessary, forming part of the non-human resources to include skills, specifications, qualifications and experience (Henderson, 2019). If Jeremy or his father decide to mow lanes and lack the training or expertise, they can choose to take up development and training on skill acquisition. Physical resources form the highest need, including equipment, machines, protective gear, materials, insurance, and a facility or premises for proper business operations and coordination. Finally, technological resources required include intellectual properties, if they are necessary today or in future.

Factors Leading to Failure

The success of the business depends on the above-discussed factors as well as effective business management and alignment of business processes or systems with the chosen business structure (Ward, 2020). Partnerships provide many business advantages as they provide diversity in decisions, operations, and skills. However, poor management may result in ultimate failure even before leaving the growth stage of maturity. Primary factors leading to failure include mixing personal relationships with business, which Jeremy and his father are susceptible to, as the business will be a family business (Ward, 2020). Unequal commitments pose a source of failure, as starting the business requires extensive personal and financial responsibility. Thirdly, lack of patience and perseverance due to increased failures and lack of a breakthrough can result in business failure, as psychological support among partners may vary resulting in conflicting interests and values (Ward, 2020). Disputes, in the alignment of values, and personality differences among partners can result in disagreements and business failure, which should be addressed using long-term strategies, mission, and vision statements to eliminate personal interests and biases. Concisely, lack of unison and comprehensive partnership between Jeremy and his father can result in a lack of trust, an essential component of business success in a partnership.

Conclusion

When deciding on the success and operation of the lawn care business, Jeremy should put in consideration these factors, conduct effective industrial and market research, and conduct a SWOT analysis of his options in choosing the most effective and appropriate business type and organizational structure. These form one of the three most essential components of a successful business, including a business hypothesis (lawn care services), conceptualization (business and organization structure), and operationalization (implementation and business onset).

References

Dobraca, M. (2015, March 28). Dictionary: Flatarchies & Holacracies. Retrieved from LinkendIn: https://www.linkedin.com/pulse/dictionary-flatarchies-holacracies-madalina-dobraca

Henderson, K. (2019, February 5). 5 Resources You Need to Succeed to Start a Business. Retrieved from Chron: https://smallbusiness.chron.com/5-resources-need-succeed-start-business-23.html

Kamola, S. b. (2019). Types of Partnership. Retrieved from https://www.economicsdiscussion.net/partnership-firm/types-of-partnership/31961

Meyer, N. D. (2017). Principle-Based Organizational Structure: A Handbook to Help You Engineer Entrepreneurial Thinking and Teamwork Into Organizations of Any Size. N D M A Publishing.

Mills, K. G. (2019). Fintech, Small Business & the American Dream: How Technology Is Transforming Lending and Shaping a New Era of Small Business Opportunity. Boston: Palgrave Macmillan.

Shah, L. J. (2018). Introduction To Business. 12th Media Services.

Skripak, S. J. (2016). Forms of Business. Virginia: Pamplin College of Business and Virginia Tech Libraries.

TRUC. (2020). THE LAWN CARE BUSINESS PURCHASING GUIDE. Retrieved from TRUC: https://howtostartanllc.com/business-ideas/lawn-care/purchasing

Ward, S. (2020, January 29). Why Business Partnerships Fail and how to Succeed. Retrieved from https://www.thebalancesmb.com/why-business-partnerships-fail-4107045