Running head: Case Study 3 1
Discussion Board 3
Harold Walker
BUSI 561
Liberty University
There are many different considerations to account for as Shania chooses how to move
forward in her new business venture. Although her husband doesn’t want to have any day-to-day
control over the company being that the two are married they are in essence partners by default.
When advising people on how to start a business one must think of what the owner wants as a
lifestyle, and how they want their lives to look like in the years following the opening of the
business. When answering these questions early and allowing yourself to face these issues in the
beginning its easy to figure out if this is going to be a long term passion project or a means to
provide for your family. The way these questions are answered significantly changes the way a
business should be laid out foundationally and financially.
Sole Proprietorship or LLC:
Starting off as a sole proprietor and moving to an LLC in the future is the easiest option
for Shania. The risk/reward factor of this option is night and day but as long as Shania is willing
to go out and put forth the effort and put in the time this is the best option for her to start with.
The reason that this is the easiest way to start a business is because the cost are minimal with the
owner only having to pay the legal cost associated with licenses and permits. With the initial cost
being low and the complete control gained from a sole proprietor I would have Shania put in the
time to make the business profitable and then explore moving to an LLC. The risk associated
with being a sole proprietorship will cause Shania stress because, “Unlike a corporation, a sole
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proprietorship poses the risk of personal liability. There is no legal separation between personal
and business assets, so if the owner defaults on business obligations like loans, her creditors may
have a right to claim personal assets for payment” (Joseph, 2015). After becoming profitable and
gaining a deeper understanding into the effort it takes to run a successful business I would have
Shania limit her risk by filing to become a limited liability corporation (LLC). This would move
the risk from that of the individual to that of the corporation, which would limit the potential
risks, associated with Shania’s personal assets. “Under corporate law, a corporation is only liable
for the total start-up investment in the company. So, if your company is currently worth $20
million, but you had a start-up of five million dollars, you cannot be sued for more than five
million dollars” (Limited Liability Company, n.d.). With the limited risk associated with moving
to an LLC Shania could focus on aggressively building her business. I don’t mean this in terms
of expansion per se but this freedom would allow her to focus on proper marketing and customer
building strategies.
Franchises:
When it comes to franchise opportunities Shania is in a tough spot because she wants the coffee
shop to be a “destination” in the area that identifies itself as a Christian business. If she were to
franchise her shop with a company such as Dunkin Donuts or Caribou she would have to adopt
their signage and organizational practices. However, if she were to franchise her organization
through a company such as Coffee AM which would have no problem with her having her own
individual identity I would think that would be the best route to go. The reason I think this is the
best route is because of the training these bigger companies could provide as well as the
wholesale equipment and supply pricing that Shania would be able to gain access too. This
would also help her to maintain the image and environment she seeks.
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A study done for the Journal of Small Business Management states that, "A franchisee
has a four times greater chance to succeed than an entrepreneur who launches a new independent
business” (Bates, 1995). This information makes me believe that the benefits provided by a
franchise will outweigh any negatives and the training and supplies provided will make a
sufficient difference in the overall prospects of Shania’s business.
The Gathering Place:
There are many instances of “The Gathering Place” used within the state of Colorado.
There are multiple effective trademarks, and trade names, while they aren’t the exact same as
Shania’s chosen name I would advise her to either pick a different name or add what her business
is into the title. I feel as though a name like “The Gathering Place: Coffee House” or anything
with a focused name would be a better choice. Not only would changing the name help to
differentiate her business from others but it would also help to provide potential customers with a
distinct description of the business. In regards to trademarks choosing a more distinctive name
would also help to ensure success as Shania goes through the trademarking process.
Partners/ Employees:
When it comes to Marvin, Shania must consider what his expectations are for his
investment and if he would like for it to be considered a loan or if he is just willing to dip into
their “collective” earnings to start the business. It’s important to differentiate the source of these
funds because in most marriages money is not completely separated between the individuals. If I
were Shania I would try to find a clear definition of what “no interest in participating in its
operation” really means. If Marvin has designs of the money being given as a loan than the two
should set expectations and sign paperwork so that there is no confusion as to what is expected
of either party.
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In regards to Kelsey I believe that she has a responsibility to do what’s right for her
family. Now I do understand that verses such as 1 Corinthians 11:3 (2009) state, “But I want you
to understand that the head of every man is Christ, the head of a wife is her husband, and the
head of Christ is God” but in my opinion scripture can’t be the sole reasoning behind her
continuing to be a stay at home mother. Her children are at very important ages and with the
amount of activities that children do these days and their familiarity with their mother always
being available I would be hard pressed to recommend Kelsey to work at the coffee shop.
When it comes to what Shania should do in regards to Carlos there are many different
avenues for her to consider. If I were Shania I would allow Carlos to work at the shop to make
the extra income he desires but I would have to make sure he understands that the Christian faith
is not a thing to take lightly. Shania must make sure that Carlos understands that while she is
open to suggestions on how to make the business run better she ultimately is the decision maker
for the organization. Because Shania’s main desire is for the coffee shop to be a meeting place
for like-minded Christians to fellowship with each other she should explain to Carlos that while
“the Christian thing” does have the potential to explode in their area it is not her desire to reach
out to the other faiths in the area. She should educate Carlos that the beliefs of those religions
differ from hers and let him know why her faith is important to her. If he can understand the
meaning of the business and work with her after she tells him how she feels; then she should
allow him to work in the coffee shop as it will fulfill one of Gods wishes as proclaimed in
Matthew 5:16 (2009) which states, “In the same way, let your light shine before others, so that
they may see your good works and give glory to your Father who is in heaven”.
In conclusion there are many factors at play when developing a business and there isn’t a
set way to properly start a business. What Shania has to do is find which ways work for her in
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advancing her personal ministry and becoming a successful business. It’s important that as a
Christian, Shania doesn’t forget about her responsibility to minister to those who don’t know our
Lord and Savior. I would advise Shania that starting a business is hard work but if she put her
heart into it and stayed focus she could accomplish all of the goals she’s set for herself.
“And whatever you do, in word or deed, do everything in the name of the Lord Jesus, giving
thanks to God the Father through him” (ESV Colossians 3:17).
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References
1 Corinthians 11:3 (2009). Retrieved from https://www.biblegateway.com/passage/?
search=1+corinthians+11&version=KJV
Colossians 3:17 (2009). Retrieved from https://www.biblegateway.com/passage/?
search=colossians+3+&version=ESV
Bates, T. (1995). Analysis of survival rates among franchise and independent small business
startups. Journal of Small Business Management, 33(2), 26. Retrieved from
http://ezproxy.liberty.edu:2048/login?url=http://search.proquest.com/docview/221001535?
accountid=12085
Colorado Secretary of State (2015). Retrieved from
http://www.sos.state.co.us/biz/BusinessEntityCriteriaExt.do
Joseph, C. (2015). Risks in Starting a Sole Proprietorship. Retrieved from
http://smallbusiness.chron.com/risks-starting-sole-proprietorship-4448.html
Limited Liability Company (n.d.). Retrieved from http://business-law.freeadvice.com/business-
law/partnerships/common_partnerships04.htm
Matthew 5:16 (2009). Retrieved from https://www.biblegateway.com/passage/?
search=Matthew+5&version=ESV
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