Reference no: EM132618293

Dave always wanted to operate his own business but he witnessed some of his builder friends 'go broke' and realized that he has to thoroughly educate himself on the various and real risks involved in operating his own domestic building business. As humans, we are eternal optimists and we can only envisage good things happening when we open up our business. While optimism is an essential component of business success, harsh reality and statistics prove that failure in small business is endemic and the consequence of failure often leads to broken relationships, bankruptcy and the loss of confidence. Starting again with a bad credit rating can be extremely difficult so it is vitally important that Dave and Melinda think long and hard about going into business and seek the advice of experienced and well-worn business people before taking the plunge. 

As a consequence of owning and operating his own building business, Dave is exposing himself and his family to risk. As part of a sound and considered approach, Dave should be aware of what his risks specifically are and then how best to mitigate these risks. The imminent risks that Dave will encounter as an owner of a building renovation company should be understood before establishing himself as a self- employed. 

Answer the following questions: 

• At the initial stage, identiß' whom do you think Dave should consult to discuss potential business risks and seek information, advice and recommendation from in order to establish his new business successfully and prevent business failure? You must also identify what type of information he must acquire and what issues he should discuss and seek advice for
• Identify the consequences if Dave chooses a wrong legal structure for his new building business? What are the different variables/factors that the legal structures in operating a business depend on and Dave must consider when determining an appropriate business legal structure?
• What are the key things that you think Dave should consider at the initial stage when determining the form, size and legal structure of the business.