Case Study Start Up Business

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14 August 2008

Case Studies Paper

Many potential business owners start up companies or invest in companies without

conducting the proper research. This causes numerous businesses to fail. I investigated

a business that I as a business owner would like to establish. My analysis of the potential

business will address several important topics. I will research the background of the

industry, trends, how to finance the business and what kind of a business it will be. I

will also look into the organizational structure for the company as well as how many

employees it will take to make this business successful. When reviewing the different

types of organizational structures my business could use I will also discuss the

management, decision making criteria, and problem solving techniques that the business

will adopt. The accounting aspect of the business is the most important part of a

successful business. A potential business owner may have a great idea but without the

accounting infrastructure in place a business will not be stable. I will discuss what

financial and accounting records may be necessary for the business. Also the assets,

inventory, depreciation and how I will price my services.

The world of elementary textbook publishing is dominating by four large publishers.

According to Dirk Smillie, who writes for Forbes Magazine, the industry of elementary

and secondary textbook industry sells over $4 billion dollars each year. California alone


spends over $500 million a year on textbooks. This industry virtually operates

completely under the radar. I found this extremely surprising because of the vast

amounts of federal funding that is giving to each state per year for the acquisition of

textbooks. I have over 11 years experience selling textbooks to school districts. I would

like to establish a consulting company. This company would assist the school districts in

their quest every year to purchase textbooks.

There are generally four types of partnerships, General Partnership, Limited

Partnership, Limited-Liability Company and the S Corporation. For my consulting

company I chose the Limited-Liability Company. In the words of Horngren and

Harrison, “A limited-liability company is its own form of business organization,

neither a partnership nor a corporation. It combines the advantages of both.

The LLC form is perhaps the most flexible way to organize a business because the

owners, called members, have numerous choices.” The LLC business organization

worked for my business for many reasons. In a LLC the members are not personally

liable for the business debts. A partnership or a proprietorship can be personally liable

for the business debts. Also in a LLC the owner has a choice to pay business income tax.

Instead the income would be taxed to the owner or owners. Corporations face double


Financing a business can be daunting, but the start up costs for the consultant

company is fairly low. I will finance the company with personal funding and a loan

from the Better Business Bureau. I will also apply for federal grants for women that

want to be a small business owner.


The company which I will call Stanford Consulting Group will need approximately

three employees to start. These employees will be located in Kansas City, Mo and

Minneapolis, Minnesota. I will be the owner and third employee located in St. Louis,

MO. The employees pay structure will be commissions only. The employees’ are

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