business studies

Characteristics of an entrepreneur

Persuasiveness, Innovation, Determination, Risk Taking

Number of staff in a micro-business

1 to 9

Turnover of a micro-business

Less than 1.7m

Number of staff in a small business

10 to 49

Turnover of a small business

Less than 5.6m

Number of staff in a medium business

50 to 249 people

Turnover of a medium business

Less than 22.8m

Number of staff in a large business

More than 249

Turnover of a large business

Greater than 22.8m

Advantages of a sole trader

Cheapest to form, fully in control of business, keep all profits, finance is private.

The owner can keep all the profits

The owner makes all their own decisions

Disadvantages of a sole trader

Unlimited liability

Sole traders are responsible for all losses in the business

Lack of continuity

Advantages of a partnership

More capital can be rasied over a sole trader

Specialisation is possible

Workload can be shared

Disadvantages of a partnership

Unlimited liability

Partners have to raise their own capital

Possibility of conflict between partners

What document do you need to create a partnership

Deed of partnership

Advantages of a private limited company

Limited liability

Opportunities for specialisation

The amount of capital available is much larger than partnership and sole traders

Disadvantages of a private limited company

Some of the financial information hast to be shared from the business

Shares are not available for wider sales so expansion may be difficult

The process of forming the company is long as more forms are needed

Advantages of a public limited company

Can sell shares on the stock exchange

Limited liability

The business can secure loans more easily as banks see them as less risky

Disadvantages of a public limited company

Formation is a lengthy legal procedure

Loss of control

Profit has to be shared

What is a franchise?

A franchise allows individuals to buy the right to trade under a well known business name and sell their products/services

Advantages of a franchise for the franchisee

Increased sales as customers know the quality of the brand

Use of a brand name

Nation wide marketing

Advantages of a franchise for the franchiser

Increased opportunities for expansion

A percentage of products from all the shops

Retails outlets run for them

Disadvantages of a franchise for the franchise

Loss of any individuality

Loses the right to choose the product

Must follow all rules set by the franchsier

Disadvantages of a franchise for the franchiser

Management of the day to day running of the shop

If a franchisee makes bad decisions it will impact on their reputation

What is a public sector business

Business which are owned and run by the country or government and run on behalf of the people.

Aims of a public sector business

To provide a service

Who controls public sector businesses

Government

What is a social enterprise

An organisation that aims to provide for the community

Factors influencing business location

Parking

Proximity to materials

Proximity to Customers

Communication Links

Transport Infrastructure

Government Influences

Availability and Price of Land

What are the 6 Business aims?

Survival

Profit and Turnover

Growth

Corporate image

Concern for the environment

Social Responsibility