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Aims and objectives are the fundamental components of every organizations. When an organization has aims and objectives, they will not go out of track and stick to their objectives.
Due to Luke's mom friends are reluctant to go back into the workforce, because they got lack of knowledge on the use of internet and e-mail and they think that they are outdated. Thus, Luke has an idea on setting up a business to show people on how internet can be widely used. The aim of Luke's business is helping people who do not know to fully utilize internet in their daily life. In the other hand, for the workaholic, they can even use internet wisely on their workplace.
The objective of Luke is to provide hands on experience of the internet. Luke will show people on how to do an online transaction. For example, online banking, buying goods on internet and paying bills via credit card in internet which saves people time. In the other hand, Luke will also provide hands on the e-mail. E-mail will allow people to communicate to another person in just a second although is in a very far distance between people. E-mail is also very widely used in business world. Hence, for people who are reluctant to the workforce, it is important for them to learn it. Other than that, Luke will also teach them on how to create a website and do correspondence online which will benefit them.
I would recommend Luke to start his business in the form of partnership. Partnership is a type of unincorporated business organization in multiple individuals. All of the partners will be managing the business and are equally liable for its debts. A partnership is the relationship existing between 2 or more persons who join to carry a trade or business but not more than 20 persons. Each person will be contributing money, labor and skills. Partnership is under the Partnership Act 1890 and has to register with Registrar of Business and obey the Article of Partnership which is a written agreement. When the existing partner want to resign, the new partner can replace the partner which already resigned.
I recommend Luke to start his business in form of partnership because he wanted to get his housemate to partner with him to start the business. In the other hand, both of them are fresh graduates. They might have not enough working experience. In the same time, partnership is one of the type of business which suite Luke and Eric. The advantages of partnership is low cost, simple to form and manage and associated with small business. Since Luke and Eric have insufficient capital, partnership will be the best choice for both of them which is easiest to form and the lowest cost is needed. Both of them have their own expertise, Eric's expertise is on business and Luke's expertise is on information technology. Hence, the responsibility of managing and handling the business can divide according to their expertise without and legal requirement which only partnership can be done.
Another advantage of partnership is the taxation advantages. Taxation of partnership is based on personal income and the business income. Furthermore, they also can deduct pro rata losses from the business on the individual tax return. This can reduce a lot cost. They also have salary for each of them every month which amount is controlled by both of them. Besides that, when they feel that their business have earn much profits, they even can share the profits earned according to the shares they have.
In my opinion there are 2 different forces in the business environment which will affect the business which are Controllable Environment and Non-Controllable Environment. Business environment of an organization basically refers to the elements which will affect the achievement of the aim.
Controllable Environment can be say as the internal environment. Internal environment means the environment that the people in the organization can controlled. For internal environment, the objective and the business activities must be clear. It is a guidance for the whole business operation. Luke have to organize his material for teaching according to the objective. The objective has to be well explained to the customers in order to make the business successful. Besides that, the financial resources and cost structure have to be well planned. Before the business start, Luke should plan the cost used to start a class, materials used, place to teach. Then, Luke and Eric should consider how much capital they should use to start this business in order to let their business to run smoothly without having any financial problem half way. The next forces that I think it might affect Luke's business will be the organization skills and capability. Luke and his partner, Eric have to be fully equipped to open their own company. Both of them have to capable in 2 different skills. Luke will be graduating from his Information Technology hence, he will be the person who is going to lecture students and making out the schedule for every classes without any class crashing. Eric will also be graduating from his Business Degree in that time so, Eric will be responsible on managing the company. Such as market their service, looking for a ideal place for classes, the financial of the company.
Moving into the Non-Controllable, which also known as external environment which cannot be controlled by the management of the organization. One if the external environment will be the customer itself. If those elderly people do not want to attend those classes, Luke might have a problem with it. Hence, Luke should enlarge his target group into a bigger group such as some students who is still studying in the high school.
The following external environment will be the competitors of Luke's company. Eric who is responsible of the marketing have to think of some weaknesses of their competitors in order to fight their competitors. For examples, free trial classes for customers, fees promotions etc.
The last external environment will be the Social factor. Some of the students might not know English very well, then Luke might have a problem on the communication part. The another problem is the holiday. Malaysia contained many different races and religion. Hence, when Luke is setting the timetable, he have to consider the races and the types of holiday.
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