The Future of Celeb-Erase & Company

Celeb-Erase & Company is at an important turning point in its history. The decision to become a public corporation or remain a private business is an important one that requires much consideration. Although the pencil erasers have been successful in the private sector, more money is necessary for the company to expand. This money could fund the construction of a new plant. This capital investment would help the company produce more pencil erasers and meet the public’s demand for popular products. The company would move down a path toward increased wealth. Overall, becoming a public corporation would have a positive effect in all aspects and would expand the business into a stronger, more developed company.

Before making the final decision, it is important to consider the disadvantages of staying private. As a private company, open liability means that litigants can sue beyond what the company is worth. Individuals can be sued for their personal wealth. As the company progresses, owners are more at risk for losing their savings. Another disadvantage is that the company can only expand to a certain point. Capital is needed to build factories that would manufacture more products. Currently, there is a demand for more pencil erasers. If the company does not become a corporation, it would limit its potential profit.

It is, therefore, in the company’s best interest to go public. In fact, it is necessary if the company wants to grow in the future. In addition to raising capital more easily, the company could hire specialized management. A financial advisor, for example, could improve the company by expanding revenue sources and streamlining tax procedures. Another advantage to having increased capital is being able to grow its marketing efforts. For example, the company could advertise its products. It could even pay celebrities to endorse their own Celeb-Erasers. Most importantly, the company can still exist after the death or retirement of a Chief Executive Officer. Unlike private businesses, the company would not fall apart.

In conclusion, Celeb-Erasers must go public if it wants a long and profitable future. Since there is a demand for the product, it would be a bad business decision to limit profit by staying private. The only way to increase supply is to make a new plant, which requires a lot of money. Since it is easier to raise financial capital as a corporation, this is the route that Celeb-Erasers must take. If the company ignores this advice, it will have to live with the possibility of being erased from the world of pencil products. However, if it follows these recommendations, it will be a permanent and profitable company in the business world.

Sources:

Notes from the InvestWrite on-line materials and lessons

Notes from U.S. History class