Jonathan owns and operates a successful sole proprietorship. A friend, who owns a similar business, suggests that they combine their businesses and form a new partnership. Which of the following should Jonathan consider before making a decision?(1 point)

Question

Responses

When Jonathan and his friend pool their resources, they will each gain some control over the decision-making process; however, the new business will likely grow slower than the sole proprietorship.
When Jonathan and his friend pool their resources, they will each gain some control over the decision-making process; however, the new business will likely grow slower than the sole proprietorship.

When Jonathan and his friend pool their resources, the business will likely grow faster than it otherwise would; however, the significant regulatory burden of operating a partnership would be far greater than that of a sole proprietorship.
When Jonathan and his friend pool their resources, the business will likely grow faster than it otherwise would; however, the significant regulatory burden of operating a partnership would be far greater than that of a sole proprietorship.

When Jonathan and his friend pool their resources, the business will likely grow faster than it otherwise would; however, Jonathan will lose some of the control over decision-making that he currently enjoys.
When Jonathan and his friend pool their resources, the business will likely grow faster than it otherwise would; however, Jonathan will lose some of the control over decision-making that he currently enjoys.

Jonathan will gain more control over decision-making by partnering with his friend; however, the significant regulatory burden of operating a partnership would be far greater than that of a sole proprietorship.
Jonathan will gain more control over decision-making by partnering with his friend; however, the significant regulatory burden of operating a partnership would be far greater than that of a sole proprietorship.

Answer 1

Jonathan should consider the following statement:

"When Jonathan and his friend pool their resources, the business will likely grow faster than it otherwise would; however, Jonathan will lose some of the control over decision-making that he currently enjoys."

This option best summarizes the key factors Jonathan should weigh. Combining resources might lead to increased growth due to shared skills, customer bases, and investments. However, transitioning from a sole proprietorship to a partnership generally means sharing decision-making authority, which can lead to conflicts or compromises that Jonathan is not accustomed to. Thus, understanding the implications of lost control while also considering the potential for business growth is crucial in making this decision.