In: Economics
s an entrepreneur, you want to start a business. You know that the first step is to consider drafting a business plan to organize all of your ideas. For this assignment, you will be submitting a business plan for your imaginary business. For research purposes, you can choose any state for the location of your business. Your business plan should include the following:
Ans:-
Introduction of proposed business: The business that i am planning to start is a play school for children in the age group 2 years to 6 years and an activity center for children in the age group 4 years to 12 years.
The play school will follow a play way method of teaching children using an eclectic mix of different teaching methodologies like montessori method, and activity oriented method. The school will run during 9 am to 1 pm in the afternoon.
The activity center will provide different activities like art and craft, handwriting classes, music classes etc. The activity center will run during 3:30 pm to 6 pm in the evening.
The business is targeting around 150 students for the play school and around 200 students for the activity center.
Type of business entity: The business entity would be incorporated as a partnership. Since, the business is in the business of providing educational services, partnership method of running it will be more suitable compared to a corporation. Advantages of running the business as a partnership are: (i) easy formation - Unlike a corporation, registration is not compulsory. It is simple to form as well as to operate (ii) flexibility in operation - there will be flexibility in operation as the number of partners are limited. (iii) sharing of risk - each partner will bear the risk individually.
Disadvantages - (i) unlimited liability - liability of every partner is unlimited. (ii) limited capital - restriction on the maximum number of partners puts a limitation on the capital that can be raised (iii) instability - death or insolvency of a partner will lead to the dissolution of the partnership firm.
The state in which i will be starting my business is California. The following steps will be required to start my business in California:
(i) Choosing a business name - The business name should be distinguishable from the name of any other company currently on record. The name that i have shortlisted is "NEWGEN EDU and ACTIVITY". I have checked the availability of the name on California Secretary of State database as well as the U.S. Patent and Trademark Office.
(ii) File the name - the next step is to file the name in the office of the concerned county clerk.
(iii) Drafting of the partnership agreement - A partnership agreement will have to be drafted and signed. It will have the following details - contribution of each partner, allocation of profit and loss, duties and authorities of partners.
(iv) Obtain licences - The next step is to obtain licence from the department of education.
(v) Obtain employer identification number - The last step is to obtain employer identification number (EIN). This will be issued by the IRS. My business will have employees like teachers, drivers, janitors, attendents etc.
Valid contracts: As my business is in the doamin of providing educational services, there will not be many suppliers. My business will have to initially procure educational equipments and toys, which will be purchased from the open market. Recurring purchases will be for books and art/craft kits. Contracts will have to entered with suppliers regarding the quantum of discount and credit terms.