Question

Mike has developed a low-cost GPS device that can be implanted into pets so that they can be easily located when lost. He would like to build a small manufacturing facility to make the devices and then sell them to veterinarians across the country. Mike has no savings or personal assets. He wants to maintain control over the business.

what is the form of organization that the business is likely to take? and please explain why.

Answer 1

In this case,as mike will own the organization.This is a Sole Propritorship Form of business.

In Sole propritorship,the owner is entitled to keep all profits after tax has been paid and liable for all losses; a sole trader.Mike is founder of the organization and he can form with minimun cost as he has no personal Asset.

The sole proprietorship is a popular business form due to its simplicity, ease of setup, and nominal cost.

The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts.The owner of a sole proprietorship typically signs contracts in his or her own name, because the sole proprietorship has no separate identity under the law.

Mike also wants to maintain control over the business so sole propritorship is the best form of business that suits him.He can also sell through E -commerce or online business.As online business is low cost and easy to handle the business.In online business,Mike can also make distributors,wholesellers etc.Even he can directly sell to Retailers and customers.

There are millions of people searching the internet every day, looking for products and services. Online retail continues to grow, year on year, as customers seek out the convenience that eCommerce offers. Convenience like being able to search and make purchases whenever and wherever they want. It’s no surprise that modern consumers are doing more and more of their shopping online. By selling online, Mike can tap into this market of online shoppers and expand your consumer-base.

In online business,There is no demographic restriction and their are great chances of increasing  market share of a product which has a low-cost GPS device that can be implanted into pets so that they can be easily located when lost. There are number of applications and websites which provide free of cost listing as mike has no savings or personal asset.This is the best option for him to sell the products with lots of benefits.