Decion-making Worksheet

Decision Making Worksheet
Student’s Name
Institution of Affiliation
Decision Making Worksheet
Step Three: Creating Alternatives
Alternatives: explanation of how the group applied the model to the case study
As per the module, the alternatives that the entrepreneur considers are limited to the constraints that the business may encounter because of the decision-making process. According to the case, James and Allison have a couple of alternatives such as asking for help from relatives and friends. Despite being able to afford the costs that may be incurred by such a move will not be credible as the support may be lacking when needed the most. Taking a bank loan is another idea but considering their retirement age, banks may not be willing to comply. Machines are expensive and this brings uncertainty on whether the business will be profitable in the long run (Romano, Tanewski& Smyrnios,2001). Apart from this, FNS can choose to add a shareholder to the business to share risk incurred and set up recruitment advertisement in the media for the public.
Step Four: Consequence Table
Consequences: explanation of how the group applied the model to the case study
Having an extra partner will mean that they profit will be divided amongst three people while recruiting from the public will mean that they will have to stick to the rates stipulated by the market. For a small business, this may be detrimental as it will increase the costs of production hence reducing the profit margin.

Loans have interest rates attached and some collateral which can be subject to receivership once the client fails to make the payments. The consequence of machines is that they are vulnerable to depreciation hence requiring upgrading to keep with new technology. FNS is a family business and having an outsider as a shareholder may be cumbersome especially if the goals are not aligned.

Step Five: Decision Matrix
Explanation of Rating and Choice
. One of the major trade-offs for the enterprise is dropping the ‘family tag’ that may be unattractive to potential investors. Considering James and Allison are in their retirement age it would be advisable to bring external partners on board for the purpose of expansion. This will ensure that the business has a strong capital base and as such acquisition of manpower and machines will be achievable. As mentioned earlier, sharing the risks boost the survival period of the company.
Step 6: Linked Decisions
Linked Decisions explanation of how the group applied the model to the case study
When it comes to acquisition of machines, the company will require staff that is well qualified to operate them. This decision will be linked to that of employing extra workforce and as a result, James will be forced to use a bigger chunk of the savings to fiancé the project. The decision not to use the house and their 401 accounts as collateral eliminates the alternative to apply for a loan.
Reference
Romano, C. A., Tanewski, G. A., & Smyrnios, K. X. (2001). Capital structure decision making: A model for family business. Journal of business venturing, 16(3), 285-310.