Creating, Financing, and Marketing a Small Business Essay

Pros and Cones of partnership

Pros of partnership
Partnerships are owned by more than one person and this increases the ability to raise funds. With partnerships, partners are more able to contribute more funds for the partnership and have high borrowing capacity (Bragg and Bragg, 2005). The partners are not employees and therefore workers compensation insurance and superannuation contributions are not payable by the drawing and profits from the partners.

Partnership type of business is cost effective as the different partners involved are specialized in different aspects regarding the business. The partnership type of business offer high level of flexibility to its partners. This is because partners are the ones who set up their benefits and responsibilities as they find it fit for their business.

Cons of partnership

In partnership, profits are shared among the partners and each partner must decide on how to value the other partner’s skills and time. Partnership business has a limited life span as it may be terminated upon the death or withdrawal of one partner.

Situations in a partnership business may change leading to a traumatic and dramatic split ups since decisions are shared which may lead to disagreements. Changes in the partnership ownership may be difficult as it will require the establishment of a new partnership.

Funding options for small businesses
Majority of the small businesses are funded using the value of their own homes. This includes the use of their properties to fund their businesses. Small businesses can also be funded using ones savings (Company, 2008). As the business grows, the business records more revenue which can be re invested into the business as a loan to the business and then the business pays the owners for the investment.

A small business owner can also use the funds obtained from an outside investor to fund his or her won business. Involving the money or the funds from the third parties lenders like finance companies and banks is also another option a small business owner can use to fund his or her business (Company, 2008). If a small business person is not in need of large sums of money, he or she can seek for funding from friends and family. Grants can also be used as an option of funding the small business. Grants can be obtained from governments and other institutions.

Managerial accounting in Creating a Successful Small Business

Managerial accounting helps managers with incremental analysis, budgeting and product costing. Managerial accounting is the process in which managers identify, analyze, interpret and communicate information for the quest of the goals of an organization.

Incremental analysis also known as the differential analysis is used by the managers in analyzing the necessary information required for decision making. Product costing is the process in which all the costs and expenses which accrue in the production of product from the raw materials to the finished product are accounted for.

Managerial accounting therefore helps the managers to collect information, process and communicate any information required for control and decision making. In incremental analysis, managerial accounting helps managers to understand the organizations financial dynamics in all activities. For example, managerial accounting helps the managers to determine which activity is profitable and worthy of investment.

In budgeting, managerial accounting helps the managers to understand better which costs should remain if an activity is stopped and which costs should be done away. Managerial accounting also helps managers with product costing. It enables the managers to understand the variable and fixed cost elements associated with the creation of new products and also help them to understand how these costs may be affected by changing volumes.

Basic components of marketing process

Marketing process consists of the 4p’s which form part of the marketing mix. Product involves the design, features, quality, packaging, labeling, branding and the warranties of the product. For example a mobile phone. Product is what the manufacturer intents to sell. Place or distribution involves the delivery of the mobile phone to the customers.

It involves channels, transport, locations and coverage. Promotion is a persuasive way of communicating to customers about the mobile phone brand offered. It involves advertising, sales promotion and personal selling (Bailey, 2003). Price is the valuation or the value of the mobile phone as mentioned by the seller. It involves terms of sales, terms of delivery, pricing polices and discounts.

Roles of Social responsibility and technology in marketing

A socially responsible business is one which shows concern to the environment and people in which it does business (Bailey, 2003). Social responsibility and technology are complimentary and are very important in marketing and its future. Technology highly enables social engagement which leads to social responsibility.

Social responsibility and technology becomes very important in marketing as it enables the marketers reach the people with the organizations brand which may lead to brand awareness. Most consumers are also tempted to buy good and services from those organizations which are socially responsible (Bailey, 2003). Companies nee to use technology to be socially responsible and to align it self with those causes which consumers care about in order to attract more customers.

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