Running head: Discussion Board 3
Discussion Board 3: Starting a Business
Gordon
Liberty University
Running head: Discussion Board 3
Abstract
In the medium sized town of Denver, somewhere in Colorado, Mrs. Jackson is thinking of
starting a business, namely a Christian coffee shop. The options available to Shania includes a
sole proprietorship, a corporation, a LLC or a Joint venture. My job is to advise her based on the
available options and business partner interest as to the best course she should take.
Running head: Discussion Board 3
Business Forms Selection
Mrs. Jackson do have a few options to consider in making a final selection because of the
potential business partners including her husband who is willing to inject capital into the startup
funding. She also have the options of her sister Kelsey, who is willing to work and her neighbor
Carlos, who is an opportunist to get involve with the business.
The business venture that Mrs. Jackson would like to consider is a “Christian coffee
house”, reviewing the case and looking a the motive of each partner, I would suggest sole
proprietorship. Kubasek, Brennan & Brown (2015) identifies sole proprietorship as a “business
owned by one person who has sole control over management and profit “(Kubasek et al, 2015).
Additionally, the formation of this type of business venture can be the least expensive with the
least complications in some cases.
In the case of the other types of business formations, a partnership can be complicated to
start-up and difficult during the business and problematic for the retiring of the business (Brown,
2015). However, on the contrary a sole proprietorship the owner can exercise his discretion at
any time including the sale of the business with ease.
Franchising versus Independent
The franchising option is considered a trade agreement between the entities (Kubaseck et
al, 2015). It is also argued that a franchising opportunity is the easiest way to start a business.
Within a franchise, it comes prepackaged with a set of rules and processes as set out by the
franchising company. If the franchise is doing well in one area, it will sometimes transcend to
your business. The franchise has pre-packaged products and services is having “widespread
success and recognition, this is indeed an advantage of independent startup” (Klein, 2012). The
Running head: Discussion Board 3
customer base is also established and the products in most cases are well known. on the other
hand the opposite is also true, if the franchise brand is affected, your business is also affected in
most cases.
On the other hand, starting an independent coffee house also have its advantages as well.
One of the pro-independent cases, is the fact that she does have connections with the large
churches in the area. These connections can lead to a lot of promising potential as an independent
business owner. This also benefits you if you can be creative in the start-up process to build your
own brand and market your ideas effectively to suit your passion and style. Some of these home-
made innovations will not be accepted if you are in a franchise. Welch (2011) presented an
argument against franchising, he stated that based on research conducted by Bates (1995),
independent business owners compared to franchised businesses in the US, the independent
owners have a much higher rate of survival.
Taking these considerations in effect, Mrs. Jackson should consider starting an
independent business, because although franchises can be better capitalized results indicate that
the first year of such businesses are likely to be profitable with higher revenues, but over the
period these” franchise based- businesses have lower profit margins than existing independent
business” (Welsh, 2011).
Business Name Search
When choosing a business name, it is important to do so with wisdom. One of the
mistakes the new business owner should be mindful of, is the fact that previous business that are
now defunct may have used those names before, it is therefore wise for the business owner to
research on the names they are choosing. Additionally, a business name that is too close to a
Running head: Discussion Board 3
competitor may cause legal battles and unnecessary law related issues. In this scenario, this is
called a “trademark infringements”.
Each business that wants to register its name, do so with the Secretary of State (SOTS)
within that jurisdiction or state. The name registered will then be recognized within that
jurisdiction or state, and no other entity can use the same name to do business. A trademark
however, is a property. “A trademark is used to protect your brand name and can also be
associated with your trade name” (Beesley, 2016). A trademark will also protect the businesses
logos and slogans at the federal level. Your name is one of your most valuable business assets, so
it’s worth protecting. Beesley (2016) write that it is very vital to know the differences between
trade names and trademarks, “because if a business starts to use its trade name to identify
products and services, a perception could be concluded that the business is now functioning as a
trademark (Beesley, 2016).
After reviewing the SOTS website, it was seen that the name “gathering place is already
used”, but she may still have a possibility to use the name based on the rules that govern that
jurisdiction. Also, the other business is not a similar business, she can therefore go ahead and
register.
Selecting a Partner in Business
In reviewing all the potential candidates (Marvin, Kelsey and Carlos) to partner for this
venture, Mrs. Jackson have a few possibilities to use a combination of skills to make it work. As
a Christian, we are called to be caring and sharing. In the book of Philippians, Chapter 2 and
verse 4 states “do not merely look out for your own personal interests, but also for the interests
of others” (The Bible, NKJV). If she considers opening as a sole proprietor, I would suggest
starts with two employees, namely Carlos and Kelsey. The capital injection from her husband
Running head: Discussion Board 3
can be treated as a loan, in this way he would not necessarily have a day to day hands on
relationship with the business.
References
Beesley, C., (2016), The Difference Between a Trade Name and a Trademark – And Why You
Can’t Overlook Either. Retrived from : https://www.sba.gov/blogs/difference-
between-trade-name-and-trademark-and- why-you-cant-overlook-either
Kubasek, N. K., Browne, M. N., Barkacs, L., Herron, D., & Dhooge, L. (2016). Biblical worldview
edition of dynamic business law. N. J. Kippenhan (Ed.). New York, NY: McGraw Hill
Education.
Klein, K, (2012). When Is the Right Time to Trademark Your Company's Name?, Retrived from:
https://www.bloomberg.com/news/articles/2013-07-05/when-is-the-right-time-to-
trademark-your-companys-name
Welsh (2011), Franchising a business with the Franchise maker.
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