Case Study Business Structures
Joe and Maria are long-time friends and have always had conversations about opening a space that combines both their passions: good food and ocean views. Joe is currently studying hospitality and Maria works as a chef in a restaurant in the city. They decided to start a business together - a cafe on the Northern Beaches of Sydney.
Neither Joe nor Maria had a sufficient amount of money or assets of their own to invest in the business. They went to the bank together to get approval for a loan so they could get the business started but were told that they needed to find a guarantor for the bank loan. The other option they had was to obtain $100,000 either in the form of a loan or an investment from a private investor who would be willing to help them to start the project. Joe had a former boss that could help them with the funding but he wanted the arrangement to be formally documented and asked them to come back with a proposal.
Northern beaches are known to be a very competitive area in the café market and Joe and Maria needed to identify what they can do to differentiate their business from other cafes in the area and use the USP to develop their customers base. Joe makes and surfboards and he wants to get some surf-related merchandise to sell in the shop and create an open space that combines both of his dreams: surfing and food. They have four friends that want to work with them. Some are open to the idea of becoming partners, but Joe and Maria are not sure about bringing in more partners. They will still need to get three more employees to start the business.
Maria would work helping with the menu and marketing and Joe as the manager - responsible for the front-of-house. Both Joe and Maria will manage the finances. Maria can’t work during the weekends because she would like to continue working as a chef in another restaurant in the city and she needs one day off during the week. Joe studies on weekday evenings and does not like to wake up early on the weekends.
Questions
Describe the types of Business Structures that are available to Joe and Maria. What are the advantages and disadvantages of each of these business structures?
Joe and Maria have asked you to advise them on the best business structure for their circumstances. What would you advise them and why?
What personal issues do think Joe and Maria need to consider before they go into business together? What are the potential problems that can happen in the future?
What risks or potential complications are there if Joe and Maria borrow money from Joe’s friend?
If Joe and Maria asked you for advice on how to best formalize this loan arrangement and what should be in their proposal. What would you suggest?
What are the risks or implications of Joe and Maria allowing Joe's friend to come in and become one of the owners of the business in exchange for his investment of $100,000?
What are the advantages and disadvantages of Joe and Maria sharing all the business tasks? Do you have any advice for them?
Instructions:
Answer all the above case study questions.
Support your responses to the case study questions with reference to relevant secondary sources.
Do not copy the scenario case study in your submission. Only include the questions and your answer to each respective question.
Adhere to the APA formatting and referencing standards.
All research and referencing should be taken fro legit australian goverment website.
pls copy the question before the answer.