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Partnerships, Small Business Funding Options, And Marketing Essay

Partnerships, Small Business Funding Options, And Marketing Partnership as a Form of Ownership: Pros and Cons

In the words of Pride, Hughes and Kapoor (2011), "the U.S. Uniform Partnership Act defines a partnership as a voluntary association of two or more persons to act as co-owners of a business for profit." This form of business ownership has distinct advantages and disadvantages. When it comes to the advantages, it is important to note that unlike most other forms of ownership; i.e. A limited liability company, the establishment of a partnership is regarded relatively easy. Indeed, according to Pride, Hughes and Kapoor (2011), the registration of the business name and securing the relevant permits and licenses are in most cases the only regal requirements for setting up a partnership.

Next, it should also be noted that unlike a sole proprietorship form of ownership, it is much easier to raise funds in a partnership as there are several owners involved. As Pride, Hughes and Kapoor (2011) point out, "this additional capital, coupled with the general partners' unlimited liability, can form the basis for a better credit rating." Third, a partnership could in the long-term benefit from the complimentary skills of its owners. For instance, according to Pride, Hughes and Kapoor (2011), one partner's expertise in an area such as manufacturing could effectively offset another partner's weakness in the same area.

Partnerships also tend to have a number of distinct disadvantages. Sharing of profits according to Gitman and McDaniel (2008) remains one of the main disadvantages of this form of ownership. It is also important to note that unlike is the case in a sole proprietorship, disagreements could easily occur in this case as decisions are typically shared. Indeed, the successful...

It should also be noted that in this form of ownership, general partners have unlimited liability (Gitman and McDaniel, 2008). If the business is unable to settle its obligations, the said partners could be held responsible for the same.
Funding Options for Small Businesses

Small businesses can explore several options in their quest to obtain funding. To begin with, a small business could be funded using the personal resources of the owner of the said business. Personal resources in this case according to Kelly and McGowen (2010) include the owner's personal accounts, donations from friends and family, etc. Other funding alternatives according to the authors include but they are not limited to bank loans and venture capital firms. Bank loans are a form of debt financing in which case a bank lends an individual (in this case the business owner) a sum of money that should ideally be repaid with interest after a certain period of time elapses. Venture capital firms on the other hand provide startups with funding based on their growth potential.

Managerial Accounting and its Relevance to Managers

Thanks to managerial accounting, managers can utilize product costing to make informed pricing decisions. This they could do by largely relying on the cost of products. Given the competitive nature of business, the relevance of setting the right price that will provide a fair profit while at the same time capturing the market cannot be overstated. Managerial accounting also does help managers with incremental analysis. In basic terms, incremental analysis according to Jiambalvo (2009) is "the analysis of the incremental revenue and the incremental costs incurred when…

Sources used in this document:
References

Gitman, L.J. & McDaniel, C.D. (2008). The Future of Business: The Essentials (4th ed.). Mason, OH: Cengage Learning.

Jiambalvo, J. (2009). Managerial Accounting (4th ed.). Hoboken, NJ: John Wiley & Sons.

Kelly, M. & McGowen, J. (2010). BUSN. Mason, OH: Cengage Learning.

Lamb, C.W., Hair, J.F. & McDaniel, C.D. (2008). Marketing (10th ed.). Mason, OH: Cengage Learning.
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