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Deciding on a Business Structure

Deciding on a Business Structure
During your first year at University you were part of a team who developed an electronic device. You were all rather pleased with it and one or two of you wondered about the possibility of mass producing it and selling it for profit. One evening you decide to raise the matter with the local barman.
Barman Well you will never get rich working for someone else. You should take that electronic gizmo you’ve got there make loads of them and sell them.
You Yes, but if it was that simple everyone would be doing it, and they’d all be rich too. I don’t know anyone who runs their own business
Barman Yes you do. Bill has his own lorry, he does haulage work. He seems to be doing alright.
You Doesn’t look very rich to me, doesn’t come in here much either. Seems to spend a lot of time working or sorting out books or accounts for the VATman.
Barman Well electronics is different isn’t it? Especially if you are a boffin doing electronic design at Huddersfield University. You could make loadsamoney.
You I could probably lose loadsamoney too. Anyway I need to find out how to set up a business first.
Barman Well Bill did it. Think he started as a sole trader or something then decided he was better off being limited or a plc or something. I don’t know, you should talk to him.
You The trouble is there are a few of us involved with this design and we have a few more ideas between us.
Barman Well why don’t you talk to Debbie, Jane and Marie? They’re partners.
You I thought they were hairdressers?
Barman Yes and they work for themselves, got their own premises and everything, they’re not a franchise.
You Didn’t realise how many people ran their own business, but none of those you mentioned involve design and manufacture. I think it would need a lot of careful planning, but you’ve given me something to think about….
Learning Outcomes
Following this PBL cycle you should be able to:
o List the type of business structures that exist in the UK today.
o Discuss the relevance of the different possible structures and explain which structures are appropriate under different circumstances.
o Choose an appropriate business structure for designing, manufacturing, marketing and selling your electronic device.
o Explain your reasons for this choice (as opposed to some other structure).
Library Catalogue
Small Business Guides
How to start ad run your own Business etc

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