Naming a business
(2) 500 word response to discussion question
1. There are many important decisions Shania needs to make before she starts her business. Partners, investors, business organization and franchise options are the main concerns for her future business. While every decision is independent, they each have major implications for the entire business plan and future decisions for the company. Overall, any business is a major undertaking and proper planning to start the business will decide the course of the business overall. I wanted to answer each question independently, but each decision is intertwined with another. I believe that Shania needs to look at the decisions around opening a coffee shop holistically rather than separate choices.
I would first advise Shania that she needs to make an important decision about who she wants to do business with. This is an important deciding factor. Every person interested, or not, in doing business with her brings advantages and disadvantages. Although the Case Study didn’t say, I would assume Shania and her husband share personal finances. If they do, then her husband could have silent role, supporting her with shared finances and not actually be involved with running the operation. If Shania decides not to bring anyone else into the company, she could open a sole proprietorship, but her and her husband would be personally liable for any debts or obligations the coffee shop has, including personal injury. (Kubasek, Browne, Herron, Dhooge & Barkacs, 2016) However if she allows her sister or neighbor to become partners she could form a type of partnership, general or limited. (Kubasek, et al., 2016)
I don’t believe that Shania’s sister would be a good business partner. In general it’s hard to do business with family, but also Kelsey’s husband wouldn’t support her involvement. This would create a divide with Kelsey and her husband. I would instead encourage Kelsey to bring her husband to the faith, leading him to grace. Once he is in a place of grace, he may better understand Kelsey’s need to join an organization or business outside of the home. There could be personal issues that Kelsey is internalizing. Having responsibilities outside of the home may fill a void in her life. Marriage is about working together and honoring each other. If Kelsey, as a new Christian, wants to have a more meaningful life, her husband needs to be a part of that. There seems to be relationship issues that would only be complicated with Kelsey being a part of a new business.
Regardless of prospective partners, I would advise Shania to form a Limited Liability Company. This form of organization offers tax advantages and flexibility to structure management, similar to a partnership. (Kubasek, et al., 2016) If she were to form an LLC, regardless of who invested into the company, they would be awarded shares of the company in return for their investment. Along with the tax and organization structure flexibility, LLC’s also enjoy personal protection against any debts or judgements against the business. (Meier, 2004) This saves the owners of the LLC against loosing personal assets, like a house, personal savings, etc.
With the information we are given, I would suggest Shania not open a franchise, but instead an independent coffeehouse. The primary reason is the type of atmosphere she wants to create in the coffee shop. If Shania opens a franchised coffee shop, the franchise may limit what she does or displays. Franchise opportunities, while at the beginning may seem like a good deal, over time, they may lead to tightening of restrictions and Shania could lose her shops original intent, to serve God while serving coffee. Opening an independent shop offers Shania the creative freedom to operate it as she see fits, mostly in a Christian manner. As Jesus taught his disciples, from Luke 12:8-9 (NIV), “I tell you, whoever publicly acknowledges me before others, the Son of Man will also acknowledge before the angels of God. But whoever disowns me before others will be disowned before the angles of God”. Shania is doing a great service by opening a Christian focused coffee shop. This could be a place to share our faith, ideas and fellowship. While I don’t agree with Shania’s neighbor, who is not a Christian, to leverage the ‘Christian Thing” for monetary gain, I do agree that Christian’s should not be afraid to display our faith in public. Because of that statement from her neighbor, I would not recommend including Carlos’s investment into the coffee shop. In 1 Corinthians 15:33 (NIV) St. Paul talks about the resurrection of Christ and the importance to believe in the resurrection, “Do not be misled: Bad Company corrupts good character”. Simply, bad people corrupt good people. In this case, the idea of using someone’s faith to profit while not believing in the same faith system is not godly. However, in Shania and Carlos’s personal relationship, outside of business, Shania should be a witness to Carlos. Paul also teaches us in 2 Corinthians 5:20 (NIV), “We are therefore Christ’s ambassadors, as though God were making his appeal through us. We implore you on Christ’s behalf: Be reconciled to God.” If Carlos ever accepts Christ, Shania always has the option to allow him to invest in her coffee shop and become a contributing partner.
In regard to naming the coffee shop, Shania cannot use the name, ‘The Gathering Place’. After a search on the United States Patent and Trademark Office database and the State of Colorado Business Database, the name is already trademarked and is the name of a non-profit organization, in good standing in the state of Colorado. The existing organization ‘The Gathering Place’ is a nonprofit organization focused on helping mothers and children though poverty issues and homelessness in Denver Colorado. (The Gathering Place, n.d.) Shania needs to decide on another name, if she wants to open an independent coffee shop. A different name with the same Christian influence could be created. After a short search of the Trademark database, the name ‘Gather Us In’ is not trademarked or a standing business. I believe that name, while still keeping with a Christian connotation, would display what Shania was trying to achieve with ‘The Gathering Place’.
Finally, Shania should always begin each decision with prayer. I would advise her that if she wants to open a coffee shop, based on Christian values, she needs to include God in her decisions. Including picking her partners, business organization and name.
References
Kubasek, N., Browne, M., Herron, D., Dhooge, L. and Barkacs, L. (2016). Dynamic Business Law. 1st ed. [Place of publication not identified]: McGraw-Hill Education.
Meier, D. (2004, August 16). The Many Benefits of Forming an LLC. Retrieved from https://www.entrepreneur.com/article/72134
The Gathering Place (n.d.). Retrieved from https://tgpdenver.org/
2. Shania Jackson is a Christian woman that is interested in glorifying Jesus Christ by opening a Christian coffeehouse near Denver, Colorado. Through this endeavor she will be able to delight in the command of letting her “light shine before others, so that they may see [her] good works and give glory to [her] Father who is in heaven,” (Matthew 5:14-16). This type of business can create a welcoming and serene atmosphere where both believers and non-believers can relax and rejuvenate in a Christian environment. There are a couple of business forms that would meet Shania’s desire, such as sole proprietorship which is easier to establish. With this form she would be in total control of management and profits however she would also have more independent legal obligations. Based on her business goals and her husband’s (Marvin) willingness to make a contribution towards the capital I would recommend establishing her business through a limited partnership.
Similar to all other forms there are advantages and disadvantages in limited partnerships. If this couple builds their foundation on solid rock (Gods word) everything should happen according to God’s plan, even “through the floodwaters and winds that beat against them,” (Matthew, 7:24-27). With Shania as the general partner, Marvin would serve as the limited partner while granting his wish of no obligations towards the business operations or management. “Establishing business partnerships has long been recognized as one of the most effective ways to help firms manage technological turbulence and dynamic market environments,” (Jiang, 2016). While there are many advantages in this options, one of the biggest is taxes. Marvin will have no liability for his portion of the partnership beyond the capital that he invest in towards the business (
Shania spent time researching the coffee business and franchising opportunities. Although she shows interest in running a franchise through her research, as a first round production of this business I would recommend starting out as an independent coffeehouse while remaining prayerful to hear from God on expanding her company. “Do not be anxious about anything, but in every situation, by prayer and petition, with thanksgiving, present your requests to God. And the peace of God, which transcends all understanding, will guard your hearts and your minds in Christ Jesus,” (Philippians 4:6-7). Running an independent business will allow Shania to have more control as she familiarizes herself with the business concept and how to wants to maintain it.
Running a franchise would certainly increase the profit and reputation of her business, however she would need to thoroughly consider her short and long term goals. For instance, if Shania wants a small and intimate business, an independent company is highly recommended. If she later decides to expand the company I would recommend making her coffeehouse a franchise by way of a chain-style business operation. This type of contractual agreement provides a restraint on the franchise partners to help safeguard certain investments and it helps uphold the coffeehouse’s biblical morals and standards. The franchise will “enable the allocation of decision control as formal authority between business partners,” (Hajdini & Windsperger, 2019). Opening a business with a Christian foundation can easily dissolve and loose its reputation if certain research, policies and procedures are not properly put in place.
Performing a corporate name search is vital for every business whether it is for a newly established corporation or a seasoned corporation that is interested in changing its name. Shania is interested in calling her business the “The Gathering Place” however, based on the corporate name search that was performed, Shania will not be able to own this trademark because the name already exist in the state of Colorado. A new trademark cannot be granted with an identical name however she is still able to use it with an understanding of the associated fine prints regarding its reputation and marketing. “A positive and well-earned corporate reputation unquestionably has value in the marketplace,” (“Corporate Reputations Matter,” 1995). Reputations are everything because they can make, break or stunt your growth. Regardless if Shania decides to open as an independent corporation or franchise, every advertisement of the “The Gathering Place” will be associated with all other businesses using that exact name.
“Marketing and management academics have acknowledged the importance of organizational reputation on firms’ competitive advantage,” (Jiang, 2016). Shania must understand that there is a lot at risk by using a name that already exist even if the service and/ or product is different. From people to corporations, a name means a lot and it is often the only initial description known for people to make a judgement. My recommendation to Shania would be to slightly modify the name of her company to help set her coffeehouse apart from any ties associated with companies using the same name. “A corporate name that is shared by other businesses becomes lost in the crowd,” (Javed, 2003). The name should be something simple and distinctive that relates to the business and represents Shania’s intent of service, for example Christian-like services or greetings. A name such as “The Gathering Place Coffeehouse” automatically tells consumers what they can expect at a minimum. Consumers only care about what’s in it for them, not the sentimental value of the name to the owner. Finding a creative, catching and meaningful name to trademark or logo should never become a problem, even if the spelling of a common name has to be revised to stand out. The business name and employees should be a direct reflection of the services offered.
Selection of partnership and employees can be challenging but despite the many factors to be considered, this decision should be done decently and in order (1 Corinthians 14:40). “For we are his workmanship, created in Christ Jesus for good works, which God prepared beforehand, that we should walk in them,” (Ephesians, 2:10). If Shania truly wants to operate her business on a biblical foundation I would advise her to be obedient to God’s will by allowing her husband (the head of her house) limited partnership in the coffeehouse. Being the head of the house in biblical terms generally refers to ‘life’ in a relationship and is necessary to uphold order and unity. Considering that we do not know if Marvin has other obligations, his desire to contribute without being involved is understandable and shows that he has faith in and supports his wife. “Anyone who does not provide for their relatives, and especially for their own household, has denied the faith and is worse than an unbeliever,” (1 Timothy 5:8).
Without considering an unsupportive and non-believing spouse, I would not recommend hiring Kelsey in a key position based on her desire to simply “get out of the house”. As a sister and Christian, I would advise Kelsey to consult with God over the plans for life. Because “God is not a God of confusion but of peace,” (1 Corinthians 14:33) I would only offer my sister a position as a greeter or wait staff until she hears from God and become on one accord with her husband. Although her husband is an unbeliever I would not deny another Christian an opportunity of growth if I have the platform. Shania should counsel her sister and offer advice if asked but she should also give her a fair job opportunity the same as she would another Christian with a desire to serve.
Hiring a non-Christian in a company founded on a biblical mandate could cause a lot of turmoil. “You cannot neatly partition your life into work and personal, or business and pleasure. These two spheres do at times overlap, and what a person does in “company time” often spills over into their private life,” (Lantos, 1999). The coffeehouse employees should not only be capable of getting the job done but also inclined to help carryout God’s word however Shania decides to implement it into her business. I would recommend Shania not bring Carlos onto the team because “there is no fellowship between light and darkness,” (2 Cor. 7:14). Considering Title VII of the Civil Rights Act of 1964, Shania has to be very cautious on her non-selection process for someone that does not share the same religious views. She should be very transparent in the company’s core values and use the same hiring procedures for all applicants, including Carlos.
When opening a business whether starting off big or small has many rewards. On the same token there are many areas to consider such as choosing the form of business, type (franchise vs independent), the business name and even the staff. If Shania continues to “seek the kingdom of heaven first all things will be added unto [her],” (Matthew, 6:33). If her desire is to open a Christian coffeehouse, she must remain focused on her vision while researching and considering the legalities of forming a Christian based business.
Reference:
Corporate Reputations Matter, and Can Be Shaped. (1995). PR News, 1. Retrieved from http://ezproxy.liberty.edu/login?url=https://searc…
Hajdini, I., & Windsperger, J. (2019). Contractual restraints and performance in franchise networks. Industrial Marketing Management. https://doi.org/10.1016/j.indmarman.2019.02.011
Javed, N. (2003). What’s in a name? The art of corporate naming. The CPA Journal, 73(10), 12.
Jiang, W. (2016). Business Partnerships and Organizational Performance, The Role of Resources and Capabilities. Berlin: Springer Berlin. doi: 10.1007/978-3-642-53989-3
Kubasek, N. K., Browne, M. N., Barkacs, L., Herron, D., & Dhooge, L. (2016). Biblical worldview edition of dynamic business law. N. J. Kippenhan (Ed.). New York, NY: McGraw Hill Education.
(1999) “Motivating moral corporate behavior”, Journal of Consumer Marketing, Vol. 16 Issue: 3, pp.222-233, Retrieved from https://doi-org.ezproxy.liberty.edu/10.1108/07363769910271469
