Business - Public & Private Sector

Primary Sector

Firms that 'extract' natural resources to be used by other firms
Eg. Farming

Secondary Sector

Firms that 'manufacture' + process products from natural resources
Eg. Clothing factory

Tertiary Sector

Firms that provide a 'service' to consumers + other businesses
Eg. Shops

Quaternary Sector

Firms that provide 'information' (technology)
Eg. Google

GDP

Gross Domestic Product
- value of all goods + services produced

Business Cycle

1. Needs and Wants
2. Business provides good/service
3. Consumer buys good/service
4. Wealth for companies + employees
5. Consumers have money to spend from wages

Employment in Sectors Overtime: Primary

Goes down
- Because of mechanisation

Employment in Sectors Overtime: Secondary

Goes up
-Due to industrialisation
Goes down
- due to mechanisation

Employment in Sectors Overtime: Tertinary

Jobs go up
- as needs and wants increase
Creates income

Employment in Sectors Overtime: Quaternary

Jobs go up
- due to reliance on technology

Public sector is

An organisation or service
Owned by National government or Local government

Public Sector Advantages

Provide service to public so profit margins are low
Cost of running service is converted by taxpayer
Directly controlled by Gov, so can't be used inappropriately

Public Sector Disadvantages

All money from taxpayers, not best value for money
Less competition, therefore less growth
Can be very expensive to run + could use a lot of taxpayer money

Voluntary Sector

Non profit companies
Eg. Helper for hero's, SSPCA, Cancer care
Usually granted tax exemptions I registered
Start up fund provided by trustees/members not expecting money back.

Sole Trader

Smallest type of business in UK
Unincorporated - business and owners same thing

Partnership

2 or more people run
Max no. Of partners 20
Unlimited liability
- except sleeping partners
Possible 'Deed or partnership'

Sole trader: Advantages

Easy to set up
Minimal money to set up
Business accounts private
Can respond to customer needs
Owner can have all profits

Sole trader: Disadvantages

Unlimited liability
Owners must work long hard hours
I'll health may close business
Holidays difficult to have

Partnership: Advantages

Less money is needed
Easy to set up
Accounts can be kept private
Decisions can be shared
Money comes from partners

Partnership: disadvantage

Legal cost of drawing up 'deed of partnership'
Unlimited liability
- except sleeping partners
Limited no. Of partners
Possible arguments
Problems if partners leave
Money can be difficult to obtain

Private Limited Company (LTD)

Owned by 2 or more shareholders
Shares sold to friends + family
- receive dividend in return
Limited liability

Private Limited Company (LTD): Advantages

Firm is bigger
Can get money selling shares
Can employ specialists
Limited liability

Private Limited Company (LTD): Disadvantages

Expensive to set up
Have to share profit through dividends
Incorporated
Accounts are not private
Not all decisions made by managers
Shares can't be sold on stock market

Public Limited Company (PLC)

Biggest private business
Shares sold on London stock exchange
Limited liability
Shareholders vote for board of directors

Public Limited Company (PLC): Advantages

Limited liability
Shares can motivate workers
Can get money by selling shares

Public Limited Company (PLC): Disadvantages

Expensive to set up
Firms can be taken over
Have to pay dividends from profit
Snot all decisions made by owners