Runninghead:BUSINESS 1
DB3–StartingandNamingaBusiness Liberty
University
BUSINESS
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DB3–StartingandNamingaBusiness Introduction
Shania Jackson is a mature Christian thinking of opening a Christian coffeehouse near
Denver, Colorado.Her husband, Marvin, is open to making a contribution of capital to the
business,buthehasnointerestinparticipatinginitsoperationormanagement.Shania’ssister,
Kelsey,hastoldShaniathatshewouldlovetobeapartofthebusiness.Kelsey’shusband,a
non-Christian,opposeshiswife’sinvolvement.Theneighbor,Carlos,isanon-Christianwhohas also
expressed an interest in participating in the business as a way to earn extra income. In
researching the coffee business, Shania comes across a few franchise opportunities, some of
whichwouldrequirehertoadoptthefranchisenameandtradedress,aswellasothersthatwould only
require her to move into a turnkey facility and agree to purchase a certain volume ofproduct
every month for a period of at least 10 years.
Shania has considered organizing her business as a sole proprietorship, a partnership of
somesort,acorporationofsomesort,anLLC,orevenajointventure.Sheisthinkingofcalling the business
“The Gathering Place.”
Startinga Business
Startingyourownbusinessisexcitingandnervewrackingatthesametime.Thethought of being
your own boss and setting your schedule sounds like anAmerican dream come true.
There are the thoughts of paying bills, employees, and making enough money to sustain your
personallife.Therealizationsetsinwhenworking12-14hourdaysisroutine,andthehandling of daily
complaints from customers, facility issues, product management, and the financial side of the
business.
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ThereanumberofdecisionsShanianeedstomakepriortothinkingofproductandcolor on the
walls.There is valuable information available to her to begin the process to start a business;
www.colorado.gov offers information and a checklist with which to walk a potential owner
through the process.Each item on the checklist has layers below to ensure each step is considered
andcompleted inentirety.Pointsofcontacts are included foreach steptoensureall questions are
answered and understood from the future owner.
BusinessForm
Shania is considering all options for the type of business that she would like to operate
underandregisterwiththeInternalRevenueService.Asherlawyer,itistoherbestinterestto explain the
benefits of each type of business form that may suite her needs.
Sole proprietorship.Thistype ofownershipisthe simplest andquickest tosetup.The
positives are the owner is in control of all daily functions and sole responsibility for financial
decisions.Thenegativesareallincomeofthebusinessandrecordedaspersonalincomefortax
purposes.Allliabilityofdebtsbelongtotheowneraswell,toincludeanylegalactionsbrought against
the owner.I would not recommend this ownership for Shania
Generalpartnerships.Thistypeofownershipiswhentwoormorepeopledesiretobe involved
with the daily business.All profits are shared equally among partners and for tax purposes; and
documented as personal income (Kubasek, Brennan, and Browne, 2013).This would not be
appropriate for Shania, as she does not have an interested partner in the business only an
investor her husband.
Public Corporations.These are the most difficult to establish and require many state
approvedactions.Shaniaisnotopeningalargebusiness,butrathersomethingsmallandeasyto manage.
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Limited Liability Corporations.This type of business allows the owner to have daily
managementofthebusinessandtaxesarecalculatedasapartnership,wheretheyareconsidered personal
income.However, the liability of the company is removed from the owner where all legal issues
are against the company itself and not the owner.Therefore, Shania would not lose her personal
assets should the company be forced to close or be involved in a legal battle.
TypeofBusiness
Franchise.This type of business offers instant name recognition and product quality.It
also removes individual creativity and types of products to distribute.This type offers
experienceinmarketingandpricingofproductsforbestprofitmargin.Martin(2015)writes,“an
important reminder that adistribution (or other) agreement may be afranchise agreement even if
the parties do not intend, or even contemplate, entering into a franchise agreement or that they
will beboundbythe Code”(p.87).When anagreement ismade to enterinto, afranchise there is a set
of guidelines that must be followed accurately in order to keep the franchise open.This type of
business may not be right for Shania. It does offer ease of product recognition and brand name
identity, but it does remove her individual desire to market to a certain audience.Shania’s best
road to take in establishing her business, as she desires with all the creativity she can muster up,
is to open a limited liability company.
NamingaBusiness
Thenaming ofbusinessisthefirststepinestablishingyourplaceinthebusinessworld.
Shania has selected a name for her potential coffee business, The Gathering Place is found as
being registered already in 20 different versions representing various types of business
(www.sos.state.co.us).IwouldrecommendthatShaniaconsideradifferentnamethatismorein tune
with the environment sheis attempting to create and entertain.Shemay wantto consider a
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namethatbringsglorytoGodinitsnameaswellasindicatestocustomers whatthebusinessis about,
such as “His grounds.”1 Corinthians 10:31 reads, “so whether you eat or drink or whatever you
do, do it all for the glory of God” (New International Version).
PartnersinBusiness
Shania has been offered assistance from various family members and friends.I would
recommendtoShaniathatsheshouldacceptthecapitalincreaseherhusband,Marvin,iswilling to offer
and accept his decline in dealing with the day-to-day operations of the business.Their marriage
to one another puts Marvin in the position of encouragement for her and friend for Shania to
bounce ideas off to ensure wisdom is being exercised.
Kelsey, Shania’ssister,sheberefusedherofferofworkinginthebusinessforthesole
ideaofgettingoutofthehouse.Herhusbanddoesnotsupportthisideaanditwouldpossibly cause
conflict in the marriage.Her daughters are an age where mother wisdom and guidance will be
necessary to guide them through the jungle of high school.
Carloshasagoodheartandwantstobeinvolvedwithsomethingtoearnsomemoney.
Heseesyourlocalbusinessasanopportunitytoaccomplishthis.However,youshouldnotenter in
business with Carlos, as his understanding of serving the one true God is not very clear.2
Corinthians 6:14 reads, “Do not be yoked together with unbelievers.For what do righteousness
and wickedness have in common? Or what fellowship can light have with darkness” (New
International Version).
Shanianeedstolistheravailablepositionswithherlocalchurchbodiesthatshareinthe same belief
as her.Her mission and vision statement of the company needs to be clear on her direction of the
company and its purpose.
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References
Colorado.gov.(n.d.).RetrievedAugust16,2016,from
https://www.colorado.gov/apps/jboss/cbe//start-business.xhtml
ColoradoSecretaryofState-BusinessDatabaseSearch.(n.d.).RetrievedAugust16,2016, from
http://www.sos.state.co.us/biz/BusinessEntityCriteriaExt.do
Kubasek,N.,Brennan,B.,&Browne,M.(2012).Thelegalenvironmentofbusiness.New York,
NY:Pearson Education, Inc.
Martin, P. (2015).What's in a name?: Substance is key in franchise agreements.LSJ: Law Society
of NSW Journal, 12, 86-87.Retrieved from
http://search.informit.com.au.ezproxy.liberty.edu:2048/documentSummary;dn=21838255
3561835;res=IELHSS
