After graduation, I would like to start a coffee shop business. Coffee shop business is a growing industry given that coffee and other related beverages are most popular in the world. Coffee is one of the most appealing drinks appreciated by communities all over the world. In addition, the beverage is easy to prepare. Thus, with the right plan and marketing strategy, coffee shop business will be a profitable and easy to operate.
Need for the Business
New York City has a large population with ready customers. Coffee shops are a major meeting point for business and social events. The large traffic of customers will ensure the enterprise makes profits thus enabling growth. Additionally, the business will take advantage of the popular coffee houses such as Starbucks, which offer the same menu at higher prices. The new coffee shop will be more flexible in its products and offer a variety of coffee products at fair prices (Lottie, 2015). Through this, the business will ensure maximum profits and quality products.
To ensure diversity and sharing of the initial capital, I would form a partnership with a willing individual. The Partnership is beneficial to the business since income tax does not bind it. In this case, only the individual files their tax returns thus ensuring maximum business profits. Moreover, partners will bring their knowledge, contacts, and, skills, improving business management and sustainability. However, in this formation, the partners are not separate from the entity, and the business assets may be seized to recover a debt of a partner. In case of withdrawal or death of a partner, the business may be dissolved, leading to its collapse (SCU, 2017).
Sole proprietorship business is difficult to start due to the huge capital required and inadequate business knowledge. However, it may be profitable for the owner takes all the profits. Corporation, on the other hand, poses more challenges since there is double taxation, where an investor and the business are taxed separately. However, in corporations, the shareholders are liable for the amounts invested and they are independent of the business (SCU, 2017). A coffee shop business is not a large entity. Thus, it is not viable to form it under a limited liability corporation (LLC). The LLC ensures the protection of all the business members, unlike a partnership, which protects limited partners only.
As affirmed by Dyre (2017, p. 6), the city has several requirements for the formation of a partnership, which include;
- Choice of a business name
- File the fictions business name
- Draft and sign a partnership agreement
- Obtain permits, licenses, and zoning clearance
- Obtain an Employer Identification Number