1. Identify the pro and cons of partnership as a form of ownership.
Partnership is a form of ownership in which there are two or more people managing the business and who are all personally liable for the company’s debt. In common law countries under partnership it is common to understand general partnership, where all partners participate in the management of the company and are liable for its debts. However, most countries have additional types of partnerships. Thus, limited partnerships allow some of the partners to relinquish their management rights, thus limiting their liability for company’s debt. Limited liability partnership goes even further and allows all partners to be only partially liable for the debts of the company.
The main advantage of partnerships is the ease of opening them, as in some cases even a written agreement is not required to establish a partnership. Moreover, taxation procedures are relatively easy for partnerships, since the income is taxed directly from partners and not the entity itself. The flexibility of the conditions and rules within the partnerships is also an important argument in favour of this form of ownership. Partners can regulate the level of involvement of individual partners, remuneration and organisational structure through the partnership agreement.
The major cons of partnerships relate to the potential conflict of interest between the partners and their personal liability for debts. This fact makes partnerships a very risky undertaking. Furthermore, it is hard for partnerships to acquire funding and in the majority of cases it is only possible to finance the company through debt. However, due to the personal liability of partners the amount of debt available is limited.
2. Discuss funding options for small businesses.
There are a number of funding options available for small businesses, however it is important for entrepreneurs to consider carefully the benefits and costs of each of them in order to select the most appropriate option for the particular company. The most straightforward way to obtain funds is debt financing. In this case lenders carefully analyse the potential of the firm in order to determine the most appropriate level of interest and the amount of money to give to the company. Equity financing is an alternative to debt financing. This option should be chosen if entrepreneurs don’t want to pay the interest associated with debt financing. Equity financing gives investors an ownership stake in the company in return for the funding provided. The main disadvantages of this method are the dilution of the company’s ownership and the impossibility to use this kind of funding only more than once.
Venture capitalists could be also an opportunity for financing small businesses, however in this case it is important to make sure that the business has already evolved and possesses strong performance and growth indicators.
3. Discuss the roles of social responsibility and technology in the marketing function
Marketing is an organizational function that is mainly engaged in buying and selling products in the company. As the scope of marketing activities is continuously increasing, the complexity of the field is augmented as well. Therefore, technology is starting to play an increasingly important role in marketing activities. Firstly, technology serves as an interface with clients that allows marketers to engage in dialogues with customers, to advertise products and services, as well as to receive feedback from the clients. Secondly, technology is crucial for analyzing the market, as they help to streamline processes within the function, introduce sophisticated models of demand forecasting.
Social responsibility has also become an integral part of the marketing function. With the increase of information transparency, people are more willing to buy from companies with strong orientation for social responsibility. Therefore, marketers should always consider the impact of social responsibility on the brand image of the company in order to attract customers and to gain their loyalty.