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Chapter: Business Science - Enterpreneurship Development - Business Plan Preparation

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Ownership Structure and Capital - Business Plan Preparation

Evidence suggests that various measures of entrepreneurship capital contribute to output. Regions with a higher level of entrepreneurship capital show higher levels of output and productivity, while those lacking entrepreneurship capital have a tendency to generate lower levels of output and productivity.

Ownership Structure

 

Proprietorship

 

Partnership firm

 

Company

 

Co-operative society

 

Selection of an appropriate form of ownership structure

 

Nature of business- if business require pooling of capital and skill are generally run as partnership

 

Areas of operation- local operation require proprietorship. National and international businesses require company ownership structure.

 

Degree of control – direct control over business operation is required suitable ownership may be proprietorship.

 

Capital requirement- if capital requirement is more so it is better to choose partnership firm.

 

Duration of business – if business have a definite period of time it suitable for proprietorship or partnership.

 

Government regulation- if the owner not like much more government involvement so he can choose partnership or proprietorship.

 

Capital

 

Entrepreneurship capital is defined as "a region's endowment with factors conducive to the creation of new businesses" and it exerts a positive impact on the region's economic output. The production function model is developed to test this positive impact and the model is estimated for various regions in Germany. Data were acquired from a startup panel developed by the Centre for European Economic Research in Mannheim, Germany, and is based on data provided biannually from the largest German credit rating agency, Creditreform.

 

Evidence suggests that various measures of entrepreneurship capital contribute to output. Regions with a higher level of entrepreneurship capital show higher levels of output and productivity, while those lacking entrepreneurship capital have a tendency to generate lower levels of output and productivity. The impact of entrepreneurship capital is stronger than that of knowledge capital.Evidence indicates that entrepreneurial capital plays a very important role in the production function model presented.


Tags : Business Science - Enterpreneurship Development - Business Plan Preparation
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