Advantages and disadvantages of a sole proprietorship and partnership
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?
Part A:
A sole proprietorship is a business owned and operated by one person. The advantages of a sole proprietorship include less paperwork, ease of formation, and complete control over the business. However, the disadvantages include unlimited personal liability for business debts and obligations, limited access to capital, and limited life of the business.
A partnership is a business owned by two or more people. The advantages of a partnership include shared decision-making and workload, shared financial responsibility, and access to more capital. However, the disadvantages include unlimited personal liability for business debts and obligations, potential disagreements between partners, and limited life of the business.
In this scenario, I think that a sole proprietorship would be best for Jeremy because he would have complete control over his business. He would not have to share profits with anyone else and would not have to worry about disagreements with partners. Additionally, he would not have to worry about sharing decision-making responsibilities with anyone else.
Part B:
The resources that Jeremy will need to start his lawn care business include a mower, edger, string trimmer, leaf blower, mowing goggles, safety ear muffs, gardening gloves, gas cans.
Factors that might lead to failure with this specific type of business include poor management skills or lack of experience in running a business. Additionally, competition from other lawn care businesses could lead to failure if Jeremy is unable to differentiate his services from those of his competitors.