Business

AIU |

Legal, Social, and Economic Environments of Business |

Business Scenario |

“Inventor Interested in starting up a Business” |

Vanessa |

1/6/2012 |

|

Abstract

The Business Scenario discusses the interest of an Inventor to start up his own business who has very little knowledge on the fundamentals required to start up a business. The Inventor, who is best described as a “handyman”, has come up with a great idea for a new kind of home appliance that meets everyday consumer needs and knows that there are similar products that meet the consumers’ needs but are inherently dangerous. The Inventor has very little knowledge in the financial and management skills required funding the start of a business. The new product is quite saturated with annual growth of only 2%.

When starting a new business, determining how fast your company will grow or the annual growth can be a difficult task. Growth rates for businesses can vary significantly depending on the situation. When a business takes off, it could double or triple in size within the course of a year. At the same time, it might struggle at the beginning and only grow at a rate of 1 or 2 percent for the year (Arthur, 2012). Saturation is a term used to describe a situation in which a product has become distributed within a market the actual level of saturation can depend on consumer purchasing power as well as competition, prices, and technology. (Arthur, 2012)

A management decision will be considered based on the (3) forms of legal businesses; sole proprietorship, partnership and corporation.

Keywords: saturation, annual growth, sole proprietorship, partnership, corporation

Legal, Social, and Economic Environments of Business

In the previous business scenario, we learned that an Inventor is interested in starting up a business without having the knowledge of the important business fundamentals required to make this a successful approach. In business there are 3...