Business Scenario 2
In reading the scenario I found that Sole Proprietor would be the best decision for this inventor. Because they have little to no start up money, financing or net worth sole proprietor is the least to fund out of the three forms of business. Although the initial financial situation of this inventor is not as appealing it would be the least costly to operate. Even with no prior experience and being solely responsible for the financials in the beginning, the sacrifice may be well worth it in the end. If the technology is going to breakthrough to a new market and untapped or untouched market, the concern of only the 2% growth of the saturated market would hold no effect on this product; as this new product will hit the market at 0%. It would not be until this product has overwhelmed its market and consumers with its presence then the saturation rate may climb. Although with this form of business, owners may have limited personal resources, this product will be able to cater to an untapped market. Which means it will be a hot commodity, the advantage is also that it can be used within existing products, causing growth and stimulation.
Partnerships are another way this inventor could go depending on how much control and freedom they are willing to give up. Every aspect of the business would need to be agreed upon amongst all the partners. Although having partners could release the financial burden, as all the partners would be financially obligated to maintain the operation of the business; the inventor would have to share profits that would need to be agreed upon by all the partners. It also still holds each partner individually responsible for any debts and lawsuits it may face.
For this inventor to start up as a Corporation would not be a wise option. Because corporations are high to start up, are double taxed and go through extensive regulations this could potentially create an initial burden of financial woes and obligations. Although it is trusted the breaking technology of this product could breakthrough an untapped market, the risk behind starting a corporation may be too high to initially venture off into.