Business

Sole traders-1 owner (corner shop,café,takeaways)

Benefits: Easy to set up and give personal service -Owner independent so can make quick decisions -Not much paperwork   - Knows customers so can help avoid debts

Drawbacks: -Unlimited liability  -Could lose house, car -Long hours no cover for holidays/sickness -Capital(money)may come from savings -Need business skills and business ends at death.

Partnerships- 2 to 20 partners (vets,restauants,accountants)

Benefits: Easier to raise Capital -Problems/ideas can be discussed   -Greater range of skills -Cover for holidays/sickness -Death of partner means share needs repaying

Drawbacks: Unlimited liability so could lose money -May be disagreements -Decisions/actions are legally binding on all customers

Private limited companies LTD(Akbar’s,)

Benefits: Limited liability so only lose money invested into business not debts -Minimum of 1 director and 1 shareholder -Easy to set up affairs still private -Easier to raise money/borrow from bank -Share transfers need agreement of all -Death of shareholder has no effect on company

Drawbacks: -Cannot sell shares to public -More regulations to comply with -Accounting procedures may be more costly

Public limited company PLC (asda,next,morrisons)

Benefits: Limited liability so only could lose money invested into business not debts -Increased money as public can buy shares -Minimum of 2 directors and 2 shareholders -Shares increase in value if company successful -Operating large scale can lower costs per unit

Drawbacks: -Many regulations to comply with -Accounts are public knowledge -Shareholders may sell shares if dividens poor(profit decreases) -Original owner may lose overall control

Charity (not for profit organisation) (Islamic relief)

Owners are called trustees. Profit is made but does not go to owners.

Franchise (McDonalds, subway, kfc)

Where a business pays to use name if already establishes business.

Good chance of success due to name being known. Payments may be large.

Less control over business 

Primary- Raw materials, cow farm, coal mine, quarry

Secondary- Making products, Seabrook, Cadbury

Tertiary- Selling, Asda, blues, fast food, petrol station

Why businesses start?

-To make money

- Do something they enjoy

- Gap in market

- Give jobs to family

- Launch products

-Meet needs of customers and help others (charity).

-Income level

-How much people earn

– Competitors

-New competitors 

-New products in the market

-Recession

-A downturn in economy usually high unemployment and low growth

-Drop/increase in level of consumer spending

-People spending less or more money

-Changing customers, technology, environment (weather).

-Demand for their products

- Innovation approach (changing)

- Think differently

- Clear leadership and management

- Good organisation

- Workers that work hard

- Product that is unique

- Good marketing

- Good promotion

- Operations

- Customer service     

 -Administration/ ict support, 

 -Marketing/sales,       

-Human resources                                            -Finance and research/development.  

Delivering key functions

In a small business will be done by individuals and in medium/large business will be done by individuals working in functional areas.

Links between functions

All function areas must link together and achieve overall aim. This means good communication and cooperation.  

-Takes care of people

-Main responsibly is health and safety (trips,safe environment)

-Recruitment(hiring new staff, retention and dismissal(letting someone leave)

-Working conditions (temperature, machinery)

-Training development. (what to do and doing it better) 

-Promotion (being put in charge)

-Employee organisations and unions (legal rules).

-Handle job vaccancies 

-Keep staff record of absence

-Write out paperwork to recruit new staff

-Money and future plans

-Preparing accounts (record of money in and out of business), e.g invoices, management accounts, financial accounts for shareholders and inland revenue ( government tax office)

-Preparing wages and salaries

-Obtaining money and resources e.g money for expansion or to pay for resources such as equipment and materials.

-Plan budget for future and moniter them

-Pay any bills

-Ask people who owe them money

-Prepare statements

-Health and safety  

-Cleaning and maintenance      -

-Clerical (office) word e.g mail, record keeping                                 

-Arranging meetings

-Sending emails and letters

-Helping visitors 

-Security 

-Support for software applications, electronic communications and electric transactions 

-Advcie on purchasing computer hardware

-Update software and install new software

-Fix any problems- Failed software

-Keep a back up of data to make sure if something happens business can keep running

-Protect from viruses or hackers

-Set up new user accounts and reset passwords

-Concerned with the main business activities                           

-Obtains and converts resources of the business into goods/services 

-Making a product and checking how it is made

-Identify best equipment and method for making product or supplying service

-Produce product at best price possible

-Test product so it is what it is meant to be

-Make sure customers receive product or service on time by working with distribution function

-Concerned with customer needs

-Market research (what customers want/like)

-Promotion ( Produce advertising campaigns)

-Find out what customers want and how they will keep purchasing from business

-Carry out surveys to check how customers feel about product

-Analyse competitors activities

-Check correct customers are being sent inormation on products

-Think of ways to make customers buy more products to increase sales

-Helps business sell more products

-Oragnise sales advertising 

-Give quotes or demonstrate products

-At events provide advice on best purchases and persuade people to buy

-Agree delivery schedules when orders have been placed

-Maintain contact with existing cusomters to ensure needs are being met

-Contact possible new customers to see if they are interested

-Concerned with customer relationships

-Activities include: Providing information (giving advice)

-Providing credit facilities

-Delivering goods

-Providing after sales service

-Communicating with customers

-Dealing with complaints

-Asking customers of their opinion

-Concerned with developing new goods/services and replacing old ones

-Activities include: -Technological development            

-Scientific research (Drugs/medicine company’s failure is common) –

-Design features –Usability make it easy to use  

-Performance of product (Obsolescence)  

No two businesses are the same

Functions will vary because:

-Size and scale(n.o of customers and workers) of business           

 -Activities of business

-Types of customers

-Needs of customers

-Preferences of owner(s)

It is a goal the business wants to acheive in the long-term.

E.g - Make profit,make money for owners, To survive, to continue to operate business                    To grow, become larger business,To be market leader,Best know business with most customers, Have largest product range, sell biggest variety of products,To raise money for poor,        To be better than competitors, Beat others selling same thing,Sell high quality products 

Importance of business aims

- Gives business a framework to operate- Know what you are doing and why.

-Creates focus for business activity- Know exactly what you are trying to acheive 

-Enhances teamwork- people will work together to acheive the aim

-Gives direction of business and creates sense of community- Provides focus to work towards as a group

-Target you want to acheive, Compnay needs to know when they have acheived it and this is done by having meausurebale objectives. E.g Have 6 new products over next 12 months

Examples of business objectives

-Reduce number of complaints by 5% -Increase sales by 10% -Make 3 new products -To increase market share by 2% -To make 50000 net profit by 2014 -Sell more products then competitors 

Importance of business objectives

-Stepping stone in acheiving as overall goal

-Set realistic targets for each functional areas

-Help to moniter performence and progress

-Enables businesss to measure performence and progress

Specific: Clearly state what is to be achieved, e.g Increases profits

Mearsureable: The desired outcome is a number value that can be meaursed, E.g Increases profits by 10%

Agreed: All staff are involved in discussing and agreeing an aim

Realistic: The target is possible given the market conditions and the staff and financial resources available

Timed: The target will be met within a given period of time, Eg 12 months

- Objectives are important as they allow a business to acheive their overall aims

- If the business had a aim to make profit they could set a different objective to help them acheive this goal. E.g increase branches, sell more items etc...

Business objectives form business aims

Aim is to dominate market and objectives to do this are improve efficiency of advertising, rasie money to develop new products,raise money for new premises, recruit a new marketing manager and raise money to develop new products. To achieve an aim you need to acheive small objectives.

Aim to make profit and objective to do this is sell more products and charge more for products.

Aim to safeguard enviroment and objective is use less material.

Aim to survive and objective is research into competitors.

Aim to improve quality of products and objective is use good quality material and equipment.

It is  main purpose of the organisation "Why it exists?"

E.g Belle vue girls school, educateing the women of tomarrow

Importance of mission statements

Gives business something to aspire to

Sets out a vision for the business

Establishes why business exists

Creates a sense of community