business unit 1 (copy)

Primary Sector

Businesses involved in extracting natural resources, such as farming, fishing, and mining.

Secondary Sector

Businesses that manufacture goods or construct infrastructure, including car manufacturing and construction.

Tertiary Sector

Businesses that provide services, such as retail stores, healthcare, and education.

Private Sector

Businesses owned by individuals or groups for profit, like Apple and Tesco.

Public Sector

Organizations funded and operated by the government to provide services, such as the NHS and public schools.

Third Sector

Non-profit organizations focused on social or environmental goals, such as Oxfam and RSPCA.

Sole Trader

A single owner business, easy to set up with full control but has unlimited liability.

Partnership

A business owned by two or more people, sharing responsibility and having unlimited liability.

Private Limited Company (Ltd)

A business structure where shares are privately owned, offering limited liability.

Public Limited Company (PLC)

A company whose shares are traded publicly, with limited liability and significant regulation.

Community Interest Company (CIC)

A type of business that combines profit-making with social goals and reinvests profits.

Franchise

A business model where individuals operate under an established brand, such as McDonald’s.

Control

Refers to how business ownership affects decision-making power; sole traders have full control.

Liability

Refers to the legal responsibilities of business owners; sole traders and partnerships have unlimited liability.

Taxation

The process of taxation differs; sole traders and partnerships pay income tax, while companies pay corporation tax.

Finance

Larger businesses often need significant capital, impacting their choice of ownership type.

Growth Potential

Public Limited Companies (PLCs) can raise significant capital through public investment.

Profit

The surplus revenue generated after all costs have been covered.

Growth

The aim of expanding operations, either internally (new stores) or externally (mergers).

Survival

The objective of ensuring a business continues to operate during challenging times.

Customer Satisfaction

Providing quality products and services to build customer loyalty.

Reputation

The perception of a business's brand, built through ethical practices and quality.

Sustainability

The commitment to reducing environmental impact while maintaining profitability.

Marketing

The functional area responsible for running campaigns, market research, and managing brand identity.

Human Resources (HR)

Handles recruiting, training, and managing employee relations within a business.

Customer Service

The department that manages customer queries, complaints, and provides after-sales support.

Operations Management

The function overseeing production processes and ensuring operational efficiency.

Finance

Responsible for managing budgets, monitoring cash flow, and preparing financial reports.

Purchasing

The function focused on sourcing materials and negotiating with suppliers.

Hierarchical Structure

An organizational structure with a clear chain of command, although it can lead to slower decision-making.

Flat Structure

An organizational model with fewer management levels, enabling faster communication but may overstretch managers.

Matrix Structure

A structure that combines functional and project-based teams, promoting collaboration but can cause confusion.

Costs

Expenses incurred by a business, such as rent, wages, and raw materials.

Revenue

Income generated from the sale of goods or services.

Profit/Loss

Profit arises when revenue exceeds costs; loss occurs when costs surpass revenue.

Break-even

The point where total revenue equals total costs, resulting in neither profit nor loss.

Stakeholders

Individuals or groups affected by the business, including owners, employees, customers, suppliers, local communities, and government.

Stakeholder Conflicts

Disagreements that arise when different stakeholder interests, such as profit versus wages, collide.

PESTEL Analysis

A strategic tool used to analyze external factors affecting a business, including Political, Economic, Social, Technological, Environmental, and Legal factors.

Corporate Social Responsibility (CSR)

The practice of businesses adopting ethical practices that benefit society and the environment.