Business Studies OCR Good Notes

Business Studies

 

Why do businesses exist

·      to make a profit

·      increase wealth

·      provide jobs

·      improve lifestyle of customers

·      to supply goods and services to customers

·      for growth of a business to satisfy the needs and wants of a business

 

Enterprise

·      another word for business/ company

 

 

 

Risks of an enterprise

Rewards of an enterprise

Money runs out

big and small profit

Overspending

Self-respect and recognition

Failure

Wealth

Stressful

Growth in a business

Terminating staff

Being your own boss

 

 

 

 

 

 

 

 

 

 

 

Sole trader

·      unlimited liability

·      owner keeps all profits

·      stress of running business on their own

·      hard to get capital

·      all problems fall on the owner

·      cheap to set up

·      financial information is private

·      illness and death stops business

·      may be required to work long hours

·      complete control over decision making

 

Partnership

·      unlimited liability

·      minimum 2, maximum 20

·      profits are shared amongst partners

·      work can be specialised

·      if there are losses they are split between them all

·      disagreement over possible decisions

·      funds are easier to raise

·      imbalance in whole load

 

 

 

 

 

 

 

 

 

 

 

 

 

Private Limited company

·      separate legal identity

·      limited liability

·      accounts can be accessed by public but cost

·      no share price

·      shares sold privately

·      profits shared amongst owners

·      more access to profits

 

 

 

Public limited company

·      shares are sold on the stock market

·      limited liability

·      take over risk

·      easy to raise funds

·      accounts are public

·      access to greater sources of finance

·      biggest size of business

·      public can become shareholders

·      dividends are paid to shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchising

·      a franchise is the right given by one business to another business to sell their goods or service using its name and logo.

·      The franchisor is the business that gives the right to sell its products or service in the return for a fee

·      The franchisee is the business that manufactures and distributes or sells the franchisors product or service

·      The franchise will get help from the franchisor by

ÞProvide training

ÞProviding specialised equipment

ÞProvide local/national advertisement

·      The franchisor charges an initial fee and also takes a share of the franchisee’s profit

·      The franchise agreement helps the franchisor control the quality and production of their product or service

·      The support provided a franchise allows people…