An essay on how to set up your own business

Topics: Corporation, Limited company, Limited liability partnership Pages: 7 (2023 words) Published: November 12, 2003
Setting up a new Business

Ownership

The type of ownership for the business will be a partnership. This is the most obvious choice as there are two people involved, my business partner and me. A partnership can involve between two and twenty partners allowing for further expansion and more financial backing if needed. The partnership would be owned in a ratio of 60:40, me owning 60%. This means we would share the cash input and profits and losses in this ratio, which is bad in the short-term for me, but hopefully good in the long-term. A partnership brings additional expertise from all the partners. A formal partnership agreement would have to be drawn up to settle any disputes. The problems with a partnership are that there is unlimited liability meaning that it is possible to lose personal possessions e.g. car and house, and that there is limited cash input. Cash would only be available internally and with loans. The alternative was a private limited company (ltd.) which would have a larger financial backing and limited liability to the value of shareholding, but in the long-term there is less profit and less control when shareholders come in to the plan as well as high set-up costs. Limited companies also have to pay more tax.

Name

The name for the business that I have decided on is Europinia Tours, this conveys the message that the company operates in Europe and it also illustrates tours which can be linked to coach tours as this is the most obvious one. Added to this, the name is quite comprehensive in a number of European countries e.g. Germany, should the business wish to expand in to other countries.

Aims and Objectives

The main aims and objectives of the business are:

Short-term

To survive and break even by the end of year 1.

To cut in to the market and build a good reputation by providing a reliable and efficient service by no later than the end of year 4.

Long-term

To expand to a public limited company and widen the range of services in 10 years.

To be able to compete well with competition and own a large market share of the British market after 15 years.

To possibly expand to European markets e.g. set-up in Italy by the end of year 25.

Staffing/Training

Initially we would need one tour guide to help customers to cope with difficulties and show customers sites and instruct with shopping tours. They will also be required to serve refreshments on trips. The tour guides will have previous experience and preferably knowledge or qualifications in foreign languages and will also need 5 GCSE's. They will need to be young and enthusiastic to portray the company's image. The coach hire company provides the tour guide on hire contract and we will have to cover any additional training costs to make the guide familiar with foreign languages and cities and sites. Training would be off the job at a special training centre for 2 weeks. Ideally there would be an intensive training course for longer, but this would be hard to budget with limited finances. As the business progresses and expands more tour guides will be needed and eventually if the company expands and buys its own coaches, we will have to cover salaries and training.

Initially we will need two coach drivers to drive two coaches. According to european union regulations the driver can only drive for five hours at a time before a 45 minute break and would need a PSV licence. For this reason and for passenger comfort we will take breaks every two or three hours. The coach driver will require knowledge of European roads and will need previous experience and training in basic foreign languages if not already qualified. The coach driver will come as part of the tour with the coach hire company also, on hire contract. This will give an experienced driver with insurance cover provided by the hire company.

Myself and my partner will operate the phones for telephone bookings as well as run the business, when trade increases we...
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