Modern education should provide students with the knowledge enabling them to own and run their private firms (Hipple 18). Such efforts can be summed up under the word entrepreneurship. Entrepreneurship lets people discover, evaluate, and exploit available opportunities to create future goods and services. Such processes generate economic growth through the innovations they introduce and improve the overall level of life in the society. Entrepreneurship offers new avenues to explore interesting opportunities and in such way contributes to fulfilling inquisitive human nature (Hipple 20). However, the choice between a stable day job and entrepreneurship is not easy to be made, as there are numerous advantages and drawbacks of each of the forms of employment.
Being a hero of the described case, I would address many issues related to starting a new firm and carefully formulate a plan of its development. First, the benefits of participating in the new partnership and risks related to it should be analyzed. Then, an effective plan guiding the activities aimed at promoting the sustainability of the firm should be made based on the knowledge about the specifics of developing a successful company. Careful investigation of the main concerns about the future of the firm related to the viability of the partnership and analysis of the main points that should be included in the plan will help to define the potential of the firm to gain success in the future.
Concerns about the Future of the New Partnership
Though many people across the globe dream of starting and owning a business, just a small percentage follows the intentions and successfully creates thriving business ventures. The low success rate of new enterprises reflects numerous challenges individuals face on the journey to launching new start-ups.
One of the main concerns about the future of the proposed partnership is related to the necessity to provide efficient cash flow by each of the partners to let the business grow. During the infancy stages, many businesses meet challenges in ensuring that the company has adequate cash flow (Burdett and Coles 312). Starting a new firm requires a big amount of investments that should be adequately divided among the partners. Without appropriate investments, the business cannot enter the market and have enough compatibility. Besides, being the owners of the firm, the partners are the last to earn an income since they get paid after expenses and creditors are paid (Burton, Sorensen, and Beckman 234). The damaging effect of the lack of proper cash flow would directly affect me as I will have to accept an inadequate income. Although the partnership has a potential to provide a sustainable and adequate income for the partners in the long-run, I will have to take a risk and accept the monthly income that is much lower than the salary at Engulf and Devour. Therefore, to accept the offer of partnership in the firm, I need to take a risk and give up a secure lucrative salary provided by a stable day job. Besides, I will be outside the protection guaranteed by employment legislations if I enter the partnership (Burdett and Coles 319).
Besides numerous financial issues, I am concerned about the future of the company because of the relatively high risks of failure of the business. Young and new businesses have high chances to fail within the first several years of operation. The risks related to the possible inability of the partners to provide a constant sustainability of the company can result in its unprofitability and, therefore, the initial investments needed to start the firm can remain uncompensated. If things go wrong, and I need to leave the partnership, I will not be insured by issues of minimum notice period and redundancy as in a partnership, as well as in a sole proprietorship, as I will not enjoy statutory rights provided by the employment at Engulf and Devour.
Though there are numerous concerns about the future of the firm, leading the private company gives the person more opportunities to control the direction of his/her career and personal future as a whole (Heckman, Stixrud, and Urzua 421). Being employed requires more working hours and gives fewer benefits, as the employees have fewer opportunities to devote their time to the advancement of the essentials of person’s social life (Backes-Gellner, Tuor, and Wettstein 89). The new partnership would help to avoid such limitations typical for the employment and give more independence and opportunities for specializing in the areas I prefer.
Plan for Developing the Firm
Well-developed and effective business strategy is the key to a successful future of the firm. It is necessary to determine the specifics of the partnership and the way it should function to develop an appropriate plan for the firm.
The described partnership can be successfully embodied in a joint venture form of partnership where the partners enjoy limited liabilities. A joint venture is a partnership where the individuals with common interests come together to establish a business purpose jointly. Upon creation of the partnership, a joint venture agreement will bear the details of the creation and termination of the partnership. According to the partnerships law, after the purpose of the partnership has been reached, the joint venture can be dissolved (Oxenbridge and Brown 264). The joint venture will offer several benefits such as the apportionment of costs and risks amongst the three partners.
The effectiveness of the partnership should be secured to ensure the future success of the business. In order to form a great and successful business partnership in the current competitive business landscape, the partners need to consider the elements minimizing problems while enhancing the chance of success, including conducting regular meetings, developing a solid agreement, knowing the partners, understanding business objectives, and clearly defining the roles (Burton, Sorensen, and Beckman 230). A strong partnership agreement will also act as a recipe for success along with regular meetings that will improve the success rates of the partnership (Heckman, Stixrud, and Urzua 463).
One of the most important things contributing to the efficacious development of the business is clearly understanding and defining the business goals. The partners need to establish strong business objectives that will map the direction of the business into the future. I define short-term business objectives as maximizing the chances of growth and survival and long-term business objectives as achieving leading positions in the market of engineering consulting services and developing a high compatibility of the company.
As the partnership is likely to face numerous challenges in management and unity issues at the beginning, it is necessary to maximize the chances of growth and survival. Establishing constant successful relations with potential clientele will be one of the methods used for supporting the sustainability of the company. Offering exceptional services for low prices at the beginning of the operation of the firm will help to bring a lot of customers. As soon as the big number of patrons is ensured, the prices will be increased gradually to their adequate levels reflecting the real situation on the market. Such pricing strategy will help to enter the market successfully and attract a big number of customers, which is important for ensuring the growth and profitability of the company.
The company needs to employ successful business strategies aimed at ensuring the success of the firm in the engineering consulting field to achieve the long-term goals. With increasingly scarce natural resources, the world requires innovative ways of building infrastructure able to feed the global economy. Therefore, the competition in the market is rather high and should not be ignored. Besides employing the appealing pricing strategy discussed above, the firm should focus on developing a wide range of unique services that can successfully compete with the services offered by the competitors. Continuous searching for appropriate innovations will help to ensure the uniqueness of the provided services and attract more customers.
Many concerns related to entering the partnership in the new firm offering engineering consulting services arise because of the lack of confidence in the financial revenues and compatibility of the new business. However, effective planning of the development of the firm can significantly decrease the potential risks that can be faced by the company. Careful planning of all aspects of the partnership, setting short-term and long-term goals, and defining the ways to achieve them will help to promote the quick growth of the firm and maintain its sustainability.
Backes-Gellner, Uschi, Simone Tuor, and Daniela Wettstein. “Differences in the Educational Paths of Entrepreneurs and Employees.” Empirical Research in Vocational Education and Training 2.2 (2010): 83-105. Print.
Burdett, Kenneth, and Melvyn Coles. “Long-Term Partnership Formation: Marriage and Employment.” The Economic Journal 109.456 (2000): F307-F334. Print.
Burton, Diane, Jesper Sorensen, and Christine Beckman. “Coming From Good Stock: Career Histories and the New Venture Formation.” Social Structure of Organizations Revisited 19 (2002): 229-262. Print.
Heckman, James, Jora Stixrud, and Sergio Urzua. “The Effects of Cognitive and Non-Cognitive Abilities on Labor Market Outcomes and Social Behavior.” Journal of Labor Economics 24.3 (2006): 411-482. Print.
Hipple, Steven. “Self-Employment in the United States.” Monthly Labor Review 133.9 (2010): 17-32. Print.
Oxenbridge, Sarah, and William Brown. “The Two Faces of Partnership? An Assessment of Partnership and Co‐Operative Employer/Trade Union Relationships.” Employee Relations 24.3 (2002): 262-276. Print.