Replies that are 300–600 words in response to other classmates’ threads. In each reply, indicate whether you agree with the other classmates’ opinions, why their assessment of the situation is or is not accurate, why the original posting is or is not in agreement with your assessment of the situation, and what should be done differently. For each thread and each reply, you must support your assertions with at least 3 outside sources (other than the text and course materials) and cited in current APA format. Acceptable sources include: books, legal cases, articles, the Bible, etc. Sources should be more substantial than basic internet dictionaries.
Reply to Bethany W
Betty Wilson has to evaluate an assortment of variables when looking to open her Christian coffeehouse in Belmont, N.C. These variables include the naming of the coffeehouse, Betty’s available network, and what type of business she should establish. In evaluating these variables, Betty should look to legal guidelines to ensure that she in compliant with applicable regulations. Since she is a mature Christian who is seeking to open an establishment affiliated with her beliefs, spiritual wisdom should also be examined.
When it comes to naming the coffeehouse, unfortunately the “The Gathering Place” is already in use by two active entities in N.C. For trade marking purposes, it would be wise for Betty to choose a different name for her establishment.
There are three specific connections that could assist Betty in the start up of her business. Her husband, John, has expressed interest in contributing funds without gaining a voice or jurisdiction in return. He is a source of funds but offers no involvement and could possibly fill the role of an angel investor who would invest generously in the crucial “seed stage” (Ramadani, 2012) of Betty’s business. Angel investors are commonly found among family or friends (investopedia.com) and are “wealthy individuals who believe in the entrepreneur or have a close personal interest in the products or missions of the companies they support” (Holaday, Meltzer, & McCormick, 2003). Such investors “play a key role in financing small and medium sized enterprises” (Ramadani, 2012). Thus, Betty should accept her husband’s offer and search for other possible investors who would assist the start up of her coffeehouse.
Two other connections Betty has are Alice, her sister, and her neighbor, Erma. Being family, Alice is a potential employee who would probably start out in a managing position. Alice is a new Christian so Betty would need to establish clear guidelines as to how she expects her Christian affiliated business to be run. Seeking to be a good leader, Betty would most likely need to do this anyway for all of her staff. Alice’s disapproving husband may withdraw her from involvement in the business. Christian or not, the wishes of Alice’s husband should still be respected. 1 Peter 3:1-2 states, “Likewise, wives, be subject to your own husbands, so that even if some do not obey the word, they may be won without a word by the conduct of their wives, when they see your respectful and pure conduct.” (ESV) Betty should encourage Alice to respect her husband’s wishes in regards to her employment at the coffeehouse. In the end, the husband’s eternal destination (i.e. heaven vs. hell) may be impacted.
Erma, Betty’s neighbor, seems to be interested in some kind of partnership in the business. Betty should not agree to this based on 2 Corinthians 6:14 which advises followers of Christ to “not be unequally yoked with unbelievers” (ESV). The second half of the verse states: “For what partnership has righteousness with lawlessness? Or what fellowship has light with darkness?” (ESV) Erma’s thoughts on how the “Christian thing” could be very successful based on certain demographics causes’ one to determine that she is most likely a non-Christian. Betty and Erma’s motivations will be distinctly different based on their spirituality and will eventually cause conflict when certain business decisions would need to be made. From the information provided, Erma’s motivation is clearly to gain money from the business venture while Betty, being a mature Christian, has a higher purpose for starting the coffeehouse. Based on 2 Corinthians 6:14, author Michael Houdmann has made the following observation:
The command implies that a great difference exists between a believer and an unbeliever. Generally speaking, the motivations, goals, and methods of a Christian are incompatible with those of an unbeliever. Faith changes the character of a person. A Christian’s highest ambition in life is to glorify the Lord Jesus and please Him in all things; an unbeliever is, at best, indifferent to such goals. If a Christian’s methods and goals in business are identical to the methods and goals of an unbeliever, the Christian very likely needs to reevaluate and reconsider his/her priorities. (gotQuestions.org)
From Houdmann’s observation and the content of 2 Corinthians 6:14, it can be concluded that Betty should not enter a partnership with Erma. If Erma simply wishes to become an employee at the coffeehouse, Betty should be very clear on how she expects her business to be run.
Before Betty begins to hire employees or take on investors, she really must decide what type of business she would like to run. One option she is currently interested in is joining a coffee franchise. Seeing as she has expressed a desire to name the coffeehouse herself and bring in a religious theme, it would not be in her best interest to take on the franchise that would have her adopt the franchise’s name and trade dress. A legitimate option based on Betty’s vision for her business would be to take on the second type of coffee franchise. From the information provided, this venture would only require her to work out of a turnkey facility and to agree to purchase a certain volume of product periodically for a minimum of ten years. This option seems to be a little too good to be true as franchises in general require the owner to take on the brand name of the franchising company (Sautner, 2000). The purchasing agreement would also be a financial risk for Betty as she may not require the amount of inventory she would have agreed to purchase during certain months. In addition, to join/buy a franchise, Betty would have to “pay fees for a license, attend training courses, sign an agreement the length of a small novel and then start a business that doesn’t even have [her] own name on it” (Sautner, 2000). There are some benefits however as good franchise companies do not only teach and regulate how their products are produced but also educate owners on how to make money producing their products (Sautner, 2000). If Betty is not already familiar with owning and operating a business, a franchise may be a good option for her.
Some other options for Betty are to form some sort of corporation, an LLC, or to engage in a joint venture. On a positive note, corporations spread or displace liability (Fitzpatrick). In other words, “the corporation itself, not the shareholders that own it, is held legally liable for the actions and debts the business incurs” (SBA.gov). Forming a corporation also has the following advantages: capital gained from sale of stock, corporate tax rate is usually lower than personal income tax rate, and corporations can offer certain benefits that attract first-rate employees (SBA.gov). Unfortunately, there is a down side as corporations can be “costly and time-consuming ventures to start and operate” (SBA.gov). Corporations are also highly regulated therefore require a lot of paperwork and may be subject to double taxation (SBA.gov). In Betty’s case, to form a corporation seems excessive and not needed for such a small business venture.
An LLC is a form of a corporation that might be an alternative for Betty. An LLC would offer Betty limited liability, separate allocation of profits and losses, and the ability to choose between partnership or corporation tax rates (Fitzpatrick). An LLC would give Betty less control over her business if she were to take on other members who could potentially mitigate the purpose of the coffeehouse and its religious affiliation. For Betty’s business, an LLC is a good option but not the best avenue to take.
Likewise, a joint venture does not seem to be in Betty’s best interest. Much like a partnership, it can be difficult to maintain as studies reveal that only 7 out of 10 joint ventures last (Park & Russo, 1996). One source shares that “one reason that so many joint ventures end is that they are meant to-that is, they are designed with a finite goal or set of tasks in mind, with dissolution anticipated thereafter” (Park & Russo, 1996). Thus, this type of business venture seem irrelevant to what the type of business Betty wants to begin.
Betty may also evaluate the options of opening a sole proprietorship or a partnership. The main setback for each of these options is that the debt liability is placed on the owner(s) of the business (Fitzpatrick). However, advantages of starting up these types of businesses is that they are “[s]imply and inexpensive to create and operate” (Fitzpatrick). As the owner of a sole proprietorship or partnership account for “profit or loss on his or her personal tax return” (Fitzpatrick), the amount of paperwork required is significantly less than that of a corporation or LLC. However, partnership can be tricky and difficult to maintain. Forbes reported that some 80% of partnerships ‘end in divorce’ (Neville, 2013). Seeing as Betty has a vision for her coffeehouse, it would be in her best interest to start her business as a sole proprietorship where she would have more control over forming an image and dictating how the business will be run.
From a spiritual perspective, the Bible does not necessarily deem one type of business evil and another good. However, the Bible does provides guidance on how business should be run in relation to consumers, lender, borrowers, employees, etc. Seeing as Betty wants to form a Christian affiliated business, she must be very attentive of her business practices to make sure she is representing Christ well. While commonly used, Colossians 3:23-24 still holds valuable principles for business owners: “Whatever you do, work at it with all your heart, as working for the Lord, not for human masters, since you know that you will receive an inheritance from the Lord as a reward. It is the Lord Christ you are serving.” (NIV) Whatever avenue Betty chooses to take, she must always be sure that she is seeking to please God with her actions and business decision
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