Short-Answer Assignment: Duties of a Party Planner, Franchising, Business Ownership Forms

Introduction

Starting a business requires an entrepreneur to have the basic knowledge of business principles. The information the business owner should be aware of includes his/her duties and business ownership forms. Knowing the duties helps the entrepreneur decide whether he/she has the competency to operate the business. Additionally, the different ownership forms assist in deciding the best form and the subsequent progression of the business, as it expands. The purpose of this paper is to answer questions relating to the duties of a party planner, merits and demerits of franchising, incubator and turnkey options. The paper also undertakes to evaluate business ownership forms and the importance of entrepreneurship. In addition, it aims to answer the questions on the ‘two men and a truck’ case study, the progression of the Ellen Sheet’s business and response to the ‘stopped cold’ case study.

Duties of a Party Planner

A party planner has numerous duties, depending on the clients’ needs. Some of the duties include obtaining the details of the party from the client, the location and the available budget. The planner discusses the details of the party and offers ideas to improve the event with the client. In some cases, the planner is responsible for managing the guests’ invitations. The party planner is responsible for planning the food menu, selecting caterers, and entertainment providers. Once the party is in motion, the planner must be present to coordinate all the activities to ensure that the guests receive seamless services. After the party is over, the planner supervises the cleanup and later meets with the client to evaluate the party and discuss payment options.

Advantages and Disadvantages of Franchising, Incubator, and Turnkey Options

The first advantage of the franchising option is the assistance the franchisee receives from the franchisor. Becoming a franchisee of an established party planning company increases the likelihood of success compared to starting the business from scratch. The franchisor helps the franchisee in managing and marketing the business.

The second advantage is the benefit of using a recognized brand name (Nickels, McHugh, & McHugh, 2012). The use of an operational party planning company’s brand name increases sales and profits. A startup business may take a long time before customers can develop confidence and become loyal.

The disadvantages of franchising include management regulation and shared profits. In the case of party planning business, the franchisor may take a large percentage of the profits from the franchisee.

The assistance that the franchisor offers sometimes becomes the regulations that limit freedom. Although, the party planning corporation may offer assistance to the franchisee, it may limit the actions that the franchisee can take. The franchisee, for instance, cannot sell the business at will.

The first merit of using the incubator option in the party planning business is that office services and business advice is available at an affordable rate (Hooley, Saunders, & Piercy, 2004). Consequently, the business can mature fast. The second merit is the access to a large number of former incubators who became successful. The alumni provide experience and expertise.

The first demerit of using an incubator is that it may take up a part of the business as their fee for providing services. The owner of the enterprise may not be comfortable with the arrangement. The second pitfall with the incubator option is that when the managers decide to take a large share of equity, the owner may lose control of the business and his input may be limited.

One of the advantages of a turnkey option for the party planning business is that the contractor deals with all the bureaucracy involved in obtaining documents and licenses (Kurtz & Boone, 2011). The business operator gets a business that is functional. The second advantage is that the contractor offers training to the staff, which reduces the need for the owner of the business to train his/her employees.

The first disadvantage is that the turnkey option can be very expensive for the party planner, especially when based in a foreign country. Secondly, the details required by the contractor may be leaked to competitors, which would make the owner lose competitive advantage.

The Appropriate Business Ownership Form

A video game rental store requires a sole proprietorship approach because it does not need large capital investment. Secondly, the scope of operation is smaller than other types of businesses.

The best form of ownership for a wedding planning service is partnership because it has numerous parts that cannot be accomplished by a single person. The service may require expertise in several areas, such as catering and interior design.

A software development firm needs a heavy capital investment, which can only be secured through incorporation. The corporate can get the needed funds from its shareholders. The risk involved in manufacturing can also be transferred from the owner to the corporation.

An online bookstore should be a sole proprietorship, while starting, but may progress to become a corporation when its operations expand. The narrow scope of the business at its initial stage does not warrant incorporation.

Importance of Entrepreneurship

Entrepreneurship provides an entrepreneur with an opportunity to implement personal ideas (Mun, 2006). The challenges of operating a business help the owner to grow, as he/she seeks for the solutions to emerging problems. Secondly, entrepreneurship creates employment opportunities for others and contributes to the welfare of the community. The employees of the business use their earnings to improve their living standards and, thus, improve social welfare.

Business Progression

The initial ownership form for Ellen Sheet was a partnership with her sons. Sheet provided the truck, while the sons offered the labor required. Although many people start a business as sole proprietors, Sheet’s partnership with the sons was essential because providing them with earnings was the motivation for starting the enterprise. The progression of the business when the sons went to college changed back to sole proprietorship. Incorporating the company to shift liability from the owner would have been the right decision, but the process was tedious. In addition, Sheet was not sure she had a potential unserved market that would warrant her to incorporate the business. The fact that she was still employed would have made it difficult for her to run a corporation. Had Sheet transformed her business into a corporation, she would have transferred the liability to the business. Consequently, she would have offered other business people a chance to use her corporation’s brand name through the franchising system without fearing personal liability from the business’ transactions.

The Cold Stone Case Answers

The cost could be associated with the company’s problems because it is low, while the ingredients are expensive. The low cost may not be sustainable for the franchisees. Other factors that contributed to the company’s problems include market cannibalism, uncontrolled growth and excessive control of franchisees. Cold Stone should reduce its speed of growth and provide some autonomy to the franchisees to make the decisions based on prevailing conditions within their localities.

Conclusion

In conclusion, a party planner discusses the budget with clients, themes and décor. The planner may invite guests, arrange the site, coordinate activities and evaluate the outcome. The advantages of franchising include marketing and management assistance and use of brand name. The demerits include regulations and profit sharing. Advantages of the incubator option include office services and access to experience. The pitfalls are loss of equity and control of the business. The merits of turnkey include reduced bureaucracy and trained staff. The disadvantages are loss of competitive advantage and high cost. The video game and bookstore should use sole proprietorship while the wedding planning services should use partnership. The software developer should use corporation form of ownership. The relevance of entrepreneurship includes personal growth, employment opportunities, and improved social welfare. Sheet’s business progressed from partnership to sole proprietorship. Sheet should have further incorporated the business. The Cold Stone prices were related to the company’s problem. Other factors that affected the firm were market cannibalism, uncontrolled growth and control of franchisees. Cold Stone should reduce its growth and provide autonomy to the franchisees.