Business Entity Selection

Running head: BUSINESS ENTITY SELECTION

Business Entity Selection

Kina I. Drummond

University of Phoenix

MSNA0460; LAW 529

Richard D'Ambrosio

November 6, 2007

Business Entity Selection

Many factors have to be considered when entertaining the notion of starting a business including the investment of time, research and capital. From the generation of an idea or concept to its introduction into the marketplace substantial commitment and an entrepreneurial spirit is essential. "Entrepreneurial start-up efforts are a significant and growing force in our nation's economy. Along with this growth, however, is [sic] an increasing number of business failures. One probable reason for these failures is that the people who start them lack pertinent entrepreneurial abilities" (Olson, 1985, p. 30). To aid in alleviating such failures there are a number of articles, books, and research on starting a business, yet there are no fail proof methods. General guidelines and principles are outlined, though. van Gelderen, Thurik, & Bosma (2006) note that there are four phases generally mentioned when starting a business:

(1) determining a business should be started, (2) recognizing an opportunity and creating a concept, (3) assembling sources and creating the organization, and (4) exchange in the marketplace. These steps loosely represent a fraction of the work and research necessary during the preparatory or pre-startup phase of a business. (p. 320)

This paper will address the basic elements of business formation by identifying an idea or vision for a business, disseminating legal and regulatory issues to be considered when creating a business, selecting professionals and mentors for advice, and determining a legal entity for the business.

Business Idea

A business idea can occur at any time. Whether through frustration at job processes, envisioning a better way to handle job processes, or recognizing a need for services the discriminating entrepreneur can visualize a concept that may come to fruition. Such is the case in nursing management and administration. Many nursing organizations and periodicals tout the necessity of nurses managing nurses; however, the development of nurse managers is not in line with this philosophy. Literature expounding the importance and deficiencies of nurse management supports the need for a comprehensive nurse management program or course to develop managerial skills in those nurses seeking to hold management and administrative positions.

Lin, Wu, Huang, Tseng, & Lawler, J. (2007) contend that "nurse managers have come to be regarded as one of the most important assets of a hospital (Aroian et. al. 1997.) They are increasingly asked to do more with less-their managerial responsibilities have increased, but they have not received good training in management principles. This lack of educational preparation among nurse managers has becomes an issue of significant importance (Noves, 2002)" (p. 157).

In addition, Freed and Dawson (2006) state that "past avenues of career preparation are insufficient to prepare new nurse managers to function in today's healthcare systems. Nurses who aspire to ne management positions will need more skills and abilities than in the past" (p.47).

Personal experience is probably the most valuable tool for assessing areas of improvement and the needs of an organization, occupation, or society. In assessing the experience of nurses the contention is that nurse managers and administrators are not equipped to wear all of the hats dictated by a managerial role. The minimum level of requirement necessary to obtain a management level position in nursing is an Associate degree in nursing with significant clinical experience or a Bachelors degree in nursing with some clinical experience. The business and or managerial courses outlined in these programs, if any, are not used in day to day clinical experience and therefore leave the nurse manager at a disadvantage for ways to recoup loss knowledge.

These claims validate the need for a bridge from clinical expertise to managerial roles. As a result of recognizing this area of deficiency, a proposal to establish a managerial consulting service to aid potential nurse managers in developing the skills necessary to act "in interrelated managerial roles consisting of three interpersonal roles (figurehead, leader, and lesson,), three informational roles (monitor, disseminator, and spokesman), and four decision-making roles (entrepreneur, disturbance handler, resource allocator, and negotiator)" (Mintzberg, 1980, as cited in Lin, et al., 2007, pp. 157-158) is necessary and worth exploring as a potential business venture.

Business Vision

Brenner (2007) describes a vision as "your picture of the business as you see it three or more years down the road" (p.14 ). This aspect of defining a business venture is important because it aids in setting goals, benchmarking, forecasting the needs of the business, and taking the business in the direction it needs to go. The primary focus of this consulting firm over the first five years will continue to revolve around management consulting. Mid-term strategies will encompass establishing an outsourced organization for helping healthcare related industries maintain adequate tracking and reporting procedures for Medicare and Medicaid quality initiative payment disbursements and project development programs for hospitals. This action should occur within three years of successful operation of the management consulting firm. Long-term strategies will focus on productivity solutions and strategic planning; to be developed in conjunction with core activities, approximately five to eight years from inception.

Legal and Regulatory Considerations

All businesses are subject to legal and regulatory considerations in some form or another. Federal, state, and local laws influence the way business behave and outline what is acceptable within a business industry. For the start-up managerial consulting operation all licensing and regulatory data must be obtained. On the local level, zoning requirements must be met if the business is to be started in the home. If office space is obtained a business license for the specific city is required. As specified by the Illinois Department of Commerce and Economic Opportunity (n.d.) the following requirements are necessary to establish