Business Idea
Purpose and Funding
The name of the business is S.A.M. Closet, and its primary focus is the sale of casual wear for all genders. The business is located in the United States, and the target customers are young people of all genders between eighteen and thirty-five years of age. In terms of funding, the initial outlay will be sourced from the bank as a loan.
Legal Form
In addition, the legal form of the organization is a partnership. A partnership is a business entity that is defined by the co-ownership of two or more individuals. However, unlike a company, a partnership is not separate from its owners and cannot own assets (Gaspar et al., 2020). Further, in most cases, partners’ liability is unlimited, meaning that creditors may take their assets as payments for any unfulfilled obligations by the partnership.
Business Model
Revenue Model
The revenue model for this partnership will involve sharing profits and losses among the partners in proportion to the ownership stake in the business. In particular, from the profits or losses made, eighty percent will be shared among the partners, while twenty percent will be reinvested back into the business.
Cost Structure
The cost structure for the partnership will include costs such as the cost of goods sold, utility bills, insurance, rental fees, and employees’ wages. Other costs related to burdens that the partnership is expected to bear involve marketing, development, advertising, and legal costs.
Growth Strategies
To grow the business, the partnership must acquire additional funding from a strategic investor and open several stores. The partnership can also diversify its products and product sources to ensure value for money and to be able to diversify the range of customers.
Risks
The main business model risk for the partnership is a disagreement between the partners. Conflicts between the partners can lead to the premature disbandment of a partnership.
Reference
Gaspar, J. E., Bierman, L., Kolari, J. W., Hise, R. T., Smith, L. M., & Arreola-Risa, A. (2020). Introduction to business (3rd ed.). Academic Media Solutions.