Do you need this or any other assignment done for you from scratch?
We have qualified writers to help you.
We assure you a quality paper that is 100% free from plagiarism and AI.
You can choose either format of your choice ( Apa, Mla, Havard, Chicago, or any other)
NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.
NB: All your data is kept safe from the public.
Introduction
Partnerships create healthy opportunities for businesses to grow. The reason is because of the aspect of shared responsibilities. However, the growth of this form of business depends on the number of partners and the capital they inject into the entity.
The firm “We Guessed, and You’re Wrong” (WG & YW) is a consulting partnership owned and operated by four friends. The business uses computing technology and data mining software to help people predict the future of their ventures. The company has continued to grow over the past few years.
The current state of the firm gives the owners an opportunity to introduce new partners and staff into the company. A new partner would bring the capital of $1,000,000 to the firm. They will also bring additional opportunities.
Alternatively, the firm can hire new NMSU engineering graduates and develop an associate program that would allow the new recruits to grow to partner status. Such growth can be achieved through career development (Schlosser, White, and Lloyd 135).
A potential partner will need to accumulate at least one million dollars to join the business. As a shareholder in the firm, I would make a number of recommendations to the other partners. I will advise them to hire three new NMSU engineering graduates and develop an associate program. The reasons for the recommendation of the option will be discussed below.
Advantages of Allowing more Partners to Invest in WG & YW Consulting Firm
Hiring three new NMSU engineering graduates is recommended as a way of expanding the operations of the business. The process will lead to the development of an associate program that will allow the new students to grow to partner status through career development (Kaplan, Sensoy, and Stromberg 99).
The information provided in the case study indicates that the firm would incur some costs to set up the associate program. However, the firm will remain in control of its operations. The expenses would be incurred only at the start of the associate program. After the initial costs are met, the firm is expected to make more profits.
High-Caliber Partners for the Company
There are a number of advantages associated with increasing the partners in the firm by hiring NMSU engineering graduates. The major benefit is that the move will enhance the quality of services provided by the consulting company (Barber and Odean 790).
The main operations of the firm involve the use of computing technology and data mining software to predict the future of investment portfolios. The graduates will learn more about the operations of the company by working with the original founders of the firm.
It is noted that the business will not assimilate partners directly into the entity. However, after the training period, the graduates will be allowed to join as partners. The strategy is advantageous to the firm, given that it will be absorbing people who know their duties in the business. High-caliber partners will help the organization to grow further (Barber and Odean 801).
The firm will also be able to offer quality services to consumers. As a result, demand for the products would rise. Allowing partners with no knowledge about the operations of the business to join the firm would bring down the company. The reason is that such investors will lack the motivation to maximize their efforts in all possible means (Kaplan, Sensoy, and Stromberg 100).
The other partners should consider implementing this recommendation as it would increase the number of qualified workers in the firm (Kaplan, Sensoy, and Stromberg 100). As a result, the future of the business will be secured.
Increase in Working Capital
The absorption of the three graduates as partners will also see the company increase its working capital by $3,000,000. The money contributed by the new investors will be taken to the reserves of the company. It is indicated that a potential partner will be required to accumulate at least a million dollars to join the firm.
To clarify this point, an example is given of the company’s financial position at the end of the 5th year. The company is valued at $2,634,000. An increase of $3,000,000 would see the company expand its reserves to $5,634,000.
Such expenses as traveling, consulting, and marketing can be catered for using this money. A look into the financial position of the firm reveals that the money in the reserve cannot be used to cover high contingencies.
Consequently, the additional funds can be used by the owners to improve the contingent reserves (Baldwin and Okubo 323). An increase in the reserves of the firm would help the partners to diversify their operations to other markets. Such a strategy will enhance the profitability of the consultancy.
The need to borrow money at interest will reduce if the firm increases its working capital. Diversification of operations through the use of the cash reserves will help the investors to maximize their profits (Kaplan, Sensoy and Stromberg 112).
On its part, enhancing the earnings will increase the dividends paid out at the end of the year. The main goal of many business enterprises is to make profits and increase the wealth and value of their owners (Min and Galle 1232).
WG and YW will easily achieve this objective by allowing more competent partners to join the firm. In light of this, the other partners are urged to consider taking this option to expand and grow the company.
Sharing of Responsibilities in the Firm
The initial number of partners in the WG & YW firm was four. To analyze their responsibilities, a comparison is made between the number of activities that the firm engages in and the size of the management team (Min and Galle 1230).
WG & YW is involved in five major activities. The tasks include consulting, traveling, marketing, making sales calls, and attending professional conferences. Covering all these operations tightens the schedule of the four partners (Barber and Odean 800).
The problem of tight schedules can be addressed by adopting a number of strategies. One of them entails an increase in the number of partners. A total of seven partners would participate in the firm after the increase. The existing responsibilities will be shared among this group (Nicolaou 101).
For example, the management can assign each of the seven partners a specific role to carry out. Sharing the work would address the problem of overworking some of the employees. In addition, the distribution of responsibilities will help investors to minimize risks.
Decision Making in WG & YW
Decision-making processes would also be enhanced as a result of the increase in the number of competent partners. In addition, the rise in the number of associates would help the investors to solve the various problems that may affect their business in the future. The addition of shareholders also provides room for diversification of ideas. It is important to note that the firm will not bring in any type of partner.
On the contrary, the new investors would be competent professionals (Schlosser, White, and Lloyd 135). The company will end up with a team of highly qualified decision-makers. As a result, the firm will grow in terms of future developments (Baldwin and Okubo, 330).
A large number of companies fail due to the poor decisions made by the management. The seven partners will play an important role in correcting each other. In addition, they will help the company to achieve its goals effectively.
Conclusion
Business owners should consider increasing the number of partners in the firm. WG & YW is growing steadily, and it will be serving a large base of consumers in the near future. It will reach a point where the four partners will be overwhelmed by the operations of the business (Baldwin and Okubo 323).
Measures should be put in place to address this issue. The best thing do is to hire three new NMSU engineering graduates. The entrants will familiarize themselves with the operations of the company before they are absorbed as partners.
According to Kaplan, Sensoy, and Stromberg, the new partners will also increase the value of the firm (79). In case an investor is interested in purchasing the firm, the partners will sell it at a high price. The value will be as a result of the value added by the new stakeholders.
Works Cited
Baldwin, Richard, and Toshihiro Okubo. “Heterogeneous Firms, Agglomeration, and Economic Geography: Spatial Selection and Sorting.” Journal of Economic Geography 6.3 (2006): 323-346. Print.
Barber, Brad, and Terrance Odean. “All That Glitters: The Effect of Attention and News on the Buying Behavior of Individual and Institutional Investors.” Review of Financial Studies 21.2 (2008): 785-818. Print.
Kaplan, Steven, Berk Sensoy, and Per Stromberg. “Should Investors Bet on the Jockey or the Horse?: Evidence from the Evolution of Firms from Early Business Plans to Public Companies.” The Journal of Finance 64.1 (2009): 75-115. Print.
Min, Hokey, and William Galle. “Green Purchasing Practices of US Firms.” International Journal of Operations & Production Management 21.9 (2001): 1222-1238. Print.
Nicolaou, Andreas. “Firm Performance Effects in Relation to the Implementation and Use of Enterprise Resource Planning Systems.” Journal of Information Systems 18.2 (2004): 79-105. Print.
Schlosser, Ann, Tiffany White, and Susan Lloyd. “Converting Web Site Visitors into Buyers: How Web Site Investment Increases Consumer Trusting Beliefs and Online Purchase Intentions.” Journal of Marketing 70.2 (2006): 133-148. Print.
Do you need this or any other assignment done for you from scratch?
We have qualified writers to help you.
We assure you a quality paper that is 100% free from plagiarism and AI.
You can choose either format of your choice ( Apa, Mla, Havard, Chicago, or any other)
NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.
NB: All your data is kept safe from the public.