3.1 What is Business?

Mission

Explains why the business exists

Vision

Overall aspiration of the business

Aims

General statements of what business intends to achieve

Objectives

More precise and detailed statements of aim/goals

Private sector

Businesses are operated and owned by private individuals and companies

Public sector

Businesses and other organisations are owned and run on behalf of the public

Example: NHS

Fixed Costs

Do not change with output

Variable Costs

Changes with output

Corporate Aims

Long term goals a company wants to achieve

Unlimited Liability

The business and the owner is 1 identity

Limited Liability

The business has a separate identity to the owner

Examples of Unincorporated businesses

Sole trade

Partnership

Examples of Incorporated businesses

PLC

LTD

Non-Profit Organisations

Owners do not keep profits.

They make money through fundraising.

Examples: Charities, Social Enterprises

Social Enterprise

Prioritise social/environmental aims while also generating profit

Shares

Unit of ownership of a company

Dividends

Company pays out for each share

External Factors that affect demand

1. Competition

2. Incomes

3. Fair Trade

4. Environmental factors

5. Demographic factors

6. Market Conditions : Seasonal demand

7. Interest Rates