It has always been your dream to have your own business

| August 31, 2017

Question
It has always been your dream to have your own business. You and your childhood friend Ravi have developed a product called Sunburst that could be used by the growing solar energy industry Tanya, a friend you met through an alumni group, has experience in marketing. The three of you agreed to form the startup team for Sunburst and you gather together one weekday morning to discuss the legal form and organizational structure your business should take.

We’re going to need additional investors and expertise to get this business off the ground, Ravi says. We should develop a business plan that will be attractive to potential investors and partners. They’re going to have concerns about joining a new startup, Tanya says. We should work to address these from the start.

Ravi looks to you. Can you prepare a PowerPoint presentation for potential investors? Let them know what legal form the business is going to take and explain why it works for our company. You should include your analysis on personal liability, taxes, interests of contributing parties, and management of the business. We want them to know we’ve done our homework.

Tanya interrupts, the other thing is we have to decide what organization structure would best serve our goals. That’s right, Ravi says. We’ve already identified innovation and timely customer service as our top priorities for Sunburst. We know we need staff to handle product development, production, finance and accounting, and marketing and sales.

We’re definitely going to need human resources functions, Tanya says. Outsourcing is one option we should look into. We need to do some research before we make a decision. Ravi looks to you again. I think we need to develop a clear mission statement and an organization chart and explain the rationale for our decisions in a short paper. You’re the most detail-oriented. You think you can handle it?

In this project, you are determining the best legal form and organizational structure for your new business. The nature of the organization’s business and the environment the business operates in are factors you must consider. Initially, Sunburst will operate locally, but within five years operations will go national (or international). Read about how you might plan these stages in Creating and Managing a New Business. (Ref 1)

In the first part of this project, you will create a narrated PowerPoint presentation for potential investors and partners in your new company. In this presentation, you will analyze the pros and cons of various forms of business and recommend the best legal form of business to achieve your organization’s goals.

In the second part of this project you will design an effective organizational structure for the business at its inception and in its next phase of growth. To achieve this, you’ll need to create one short paper with three sections: (1) a brief mission statement reflecting the primary goals of the business, (2) a detailed organization chart, and (3) a rationale statement that explains and supports, thoroughly but succinctly, the mission statement and structural decisions reflected in the organization chart.

Step 1: Determine the Legal Structure of Your Business: Gather and Analyze Information

You go to your office to begin the task at hand—the preparation of a narrated PowerPoint presentation to potential investors that will address all of the issues involved in making this decision. For critical background information, see Creating Sunburst: Legal and Organizational Considerations. (Ref 2) You will need this information to make the best legal and organizational decisions for your business.

Since one of the investors will not be able to attend a presentation in person, you need to prepare and record a narrated PowerPoint, so she can listen at her convenience. In order to complete this task, you realize that you must do some research to address the legal and strategic implications if your business is to get off the ground.

What types of business organizations are available to entrepreneurs?

What are the advantages and disadvantages of each alternative?

What are the two best choices and why?

How would you explain your choices to your investors?

Be sure to discuss the following information in your plan (refer to Legal Forms of Business (Ref 3) before you begin writing):

What are the different legal forms of business that you might consider? You remember that there are at least six factors that will influence your choice:

creation and maintenance

continuity

ownership and control

personal liability

compensation and division of profits

taxation

What is your proposed choice for the legal form of business? Include your reasoning based on the preceding six factors and any other relevant factors.

When your research is complete, continue to the next step, in which you will create the Powerpoint presentation for your investors.

Step 2: Prepare Your Presentation

Using the information you gathered in the previous step, prepare a PowerPoint with a transcript. Because you will not deliver this presentation in person, it should follow the form of asynchronous presentations. (Ref 4) Be sure to meet the following requirements:

Include a title slide, with your name on it, introducing the presentation.

On the presentation slides, include only the major bullet points for each issue.

Include no more than 15 slides (not counting title page or references list).

Cover all the elements of your plan as outlined in Step 1.

Use your narration to provide the supporting rationale for each major bullet point.

Include a script of your narration in the notes section of PowerPoint.

The final slide must present a clear summary of your major conclusions and any recommendations.

Include a reference page in APA format citing any sources you used to develop your presentation.

When your presentation is complete, continue to the next step, in which you will gather information about the potential organization structure for your business.

Step 3: Determine Your Organization’s Structure: Gather and Analyze Information

Now that you have decided on a legal organization form for your business, which currently has a single location, you need to decide on an organization structure. Organization structure determines such things as what departments the organization will need, who will report to whom, how many levels you will have in your organization’s hierarchy, and how many individuals will report to each manager (span of control). An effective structure should promote communication and coordination of efforts across the entire organization. See: Organization Structure and Design. (Ref 5)

You begin your research by formulating a number of questions, the answers to which will be reflected in a short paper that includes your mission statement, organization chart, and your rationale for these recommendations.

1. Sunburst’s primary goals are innovation and customer responsiveness. How should your mission statement (ref 6) articulate these goals? How can this statement be drafted so that it is clear, concise, and meaningful to organization stakeholders?

2. What key tasks must be accomplished in order to meet the organization’s goals? What individuals or groups will have responsibility for delivering these processes or items?

3. Will individuals have titles and, if so, which individuals? What will those titles be?

4. To whom will individuals report? Why?

5. What are the possible impacts of outsourcing the HR function (Ref 7)? What are the pros and cons of doing so? Make a recommendation in your paper. If you decide to keep HR in house, make sure its place in your business structure is reflected in your organization chart.

6. Consider all other relevant factors (for example, will your business structure be functional, centralized, or decentralized, etc.).

When you have formulated your preliminary thoughts and questions, begin your research. The resources below are a good start, but you should also conduct your own research to enhance your knowledge and the final product.

When your research is complete, continue to the next step, in which you will write your short paper, which will include a mission statement, organization chart, and summary of the rationale behind your decisions.

Step 4: Integrate Your Thoughts and Material

You’ve formulated your key questions; you’ve done your research; you’ve analyzed and refined your information and thoughts. Now it’s time to put it all together and start drafting your deliverable.

Assemble a short paper that contains the following:

your mission statement of no more than one paragraph

your organization chart

your rationale, no more than five pages (12 point type, double-spaced), for your chosen mission statement and organization structure as displayed in your chart

Be sure to attribute any sources you use in the creation of any of the documents you submit.

Include a reference page in APA format citing any sources you used in your short paper.

When your mission statement, organization chart, and rationale statement are complete, continue to the next step, and submit your work.

Step 5: Materials

narrated PowerPoint with recommended legal form of business

short paper including mission statement, organization chart, and rationale

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