Question

Women have been encouraged throughout the world to be entrepreneurs. Many reasons, some of them being to support themselves and their families; to attain the fulfillment of having started something on their own and to satisfy their desire for financial independence. Women not only create jobs for themselves and others, but also work toward growing their businesses, and constantly innovating new products and services. One such example was the partnership venture of Ms. Rihab, Ms. Shaima, Ms. Yumna and Ms Zahra. This partnership firm was called as “Family Events”. Based in Bawsher since inception in 2009, this SME concentrated on management and arrangement of family functions namely marriage parties, birthday parties etc. Further, they expanded their business and entered into managing events such as pre marriage shoots, new born photography and outdoor catering service. In 2020, this firm has failed to live up to the expectations of their customers in terms of quality, innovation and cost. This has caused huge loss in sales revenue, brand value and profits of the company. Out of the four partners, two opine closure and settlement, while the other two are devising ways to keep the firm afloat.
You are an Independent advisor based in Muscat and are required to explain and critically compare the different situations that crop up on following both opinions individually.

Answer 1

Keeping both views in mind, first to make closure and settlement of the business and second to make plans for keeping the business coming out of debts aroused, it should keenly analysed that which would be more beneficial.

As we already have read that the company is in losses and is facing decline in sales revenue and profit of the company, bringing the company to closure will not coverup all the losses incurred. Infact, clearing all existing debts only a small part would be left to be distributed to the owners or partners. Hence adopting the first method, would not give huge gains. But we should not forget that if there is no way one could start Ober the business all again and plan for things and move towards earning profit, there is no point in investing more in the company, Infact in this situation its better to make settlements and bring the company down to closure.

But if there are chances that making new plans could overcome the current situation, then one should must give their full efforts in planning to tackle the situation and try coming out of this tough situation.

Now selecting between the two needs a good analyzation. Both the methods should be analysed ans it should be seen which is more profitable with future reference.

I would suggest, that the company should make market analysis, know the current demand of customers and accordingly plan their strategies to meet the demand of customers.

Making innovations in their process will help improve the position of the company. As it takes quite time to establish a business, giving up easily should not be the solution to this, if its possible to fight against the situation and gain the lost position.

As an advisor, I would like to suggest the the partners should should change their marketing methods and make innovation in their way of performing the tasks. This would definitely bring profit to the company.