1.1 - business, goods/services, FOP, functions in business, types of businesses, sectors

business

• organization engaged in

  • commercial

  • industrial

  • professional activities

• aimed at generating profits

goods

tangible products sold for money

services

intangible goods sold for satisfying needs or wants for money

4 factors of production

• land - natural resources

• labour - human effort

• capital - money and machinery

• enterprise - knowledge, skills and experiences

functions in business

• human resources

• finance and accounts

• marketing

• operations managemet

human resources

• department responsible for

  • managing employee recruitment

  • training

  • performance

  • well-being within an organization.

finance and accounts

• function in a business

• oversees the management of

  • monetary resources

  • financial reporting

  • budgeting

  • accounting practices.

marketing

• function that focuses on

  • promoting and selling products or services

    • market research

    • advertising

    • customer engagement.

operations managment

• function responsible for

  • overseeing the production,

  • delivery of products or services,

  • efficiency and quality in processes.

adding value

• enhancing a product or service's worth through:

  • improvements in

    • quality

    • features

    • customer service,

increasing customer satisfaction

entrepreneur

• individual who starts and runs a business

  • takes on financial risks

    • in the hope of profit

    • driving innovation through new ideas and ventures.

traits of enterpreneur

• innovative

• risk taker

• resilient (able to accept feedback or setbacks)

• communicator

• open-minded

• strategist

challenges for starting a business

• difficulty in securing funding

• lack of market research

• poor marketing

• limited human resources

• competition

• legal problems

• lack of knowledge, skills and experience

opportunities for starting up a business

• G - capital growth

• E - earnings

• T - transference (passing the business to next generation)

• C - challenge

• A - autonomy

• S - security

• H - hobbies

public sector

controlled by the government, providing services and goods to the public.

• health care system

• education

• museum

• emergency services

private sector

private enterprises not owned by the government, focused on profit generation and offering goods and services.

• sole trader

• partnership

• limited company

• franchise

types of for profit organisations

• sole traders

• partnerships

• privately held (limited) companies - LTD

• publicly held (limited) companies - PLC

sole trader

• business structure where

  • individual owns and operates a business alone

  • responsible for all profits and liabilities.

partnership

• business structure where

  • two or more individuals

  • share

    • ownership

    • management responsibilities

    • profits

    • liabilities.

privately held (limited) companies LTD

• company owned by a

  • small group of investors or shareholders

  • shares are not available to the general public

publicly held (limited) companies PLC

shares are available to the general public and traded on a stock exchange

sole trader advantages

• quick and easy to set up

• full control over business decisions

• all profits for the owner

• private accounts

sole trader disadvantages

• limited finance options

• unlimited liability

• high workload

• lack of continuity if owner is absent

• expansion may be difficult

• personal risk in case of failure

partnership advantages

• shared responsibilities and resources

• more capital available

• better decision-making through collaboration

• more ideas and skills

• shared workload

• specialization

• private financial accounts

partnership disadvantages

• unlimited liability

• shared profits

• slow decision making

• potential disagreements

• lack of continuity if a partner leaves

privately held (limited) companies LTD advantages

• limited liability

• private financial accounts

• full control, as shares aren’t sold without agreement of existing shareholders

• easier to raise capital through private investments

privately held (limited) companies LTD disadvantages

• shares can be sold only to the small group of investors

• expensive to operate

• fewer funding options

publicly held (limited) companies PLC advantages

• funds raised through issuing shares

• limited liability

• ability to attract large investments

publicly held (limited) companies PLC disadvantages

• public financial accounts

• annual report

• difficulties in management

• expensive

• potential loss of control over companies direction

social enterprise

• business with specific social objective as its primary purpose

• strive to maximize profits

  • while maximizing positive impacts on society and the environment.

• operate like traditional businesses

  • reinvest profits into social causes.

advantages of social enterprise

• financially self-sustaining

• create social value and impact.

• foster community engagement and innovation

• provide job opportunities

disadvantages of social enterprise

• financial stability can be difficult

• difficult growth

• delicate balance between social mission and making money

not for profit social enterprises

• reinvest surplus/ revenue to further social or community goals

• rely on grants, donations, and membership dues

• must reinvest surplus/ profits into the organization rather than distribute them

-NGOs (parent teacher association, fraternities,homeowners association)

-charities (red cross, WOŚP)

non governmental organisations NGOs

• independent of government

• voluntary, community based organisations

• seek to need a need or provide a service

• rely on government funding/ private individuals

advantages of not for profit social enterprises

• can gain support from wide audience

• tax exemptions and benefits

• ability to focus on social issues without profit concerns

• access to grants and funding opportunities

• can enhance community engagement and trust

disadvantages of not for profit social enterprises

• people can become overdependent on the organisation

• limited resources

• funding challenges - competition for grants and donations

for profit social enterprise

• organization that exists to earn a profit

• can earn revenue through sales or services, secure investments, or raise capital through loans

• can disperse earnings among the owners, shareholders, and employees

• may also support social initiatives or community development efforts.

-restaurants

-airlines

-manufacturers

types of for profit social enterprises

• private sector companies

• public sector companies

• cooperatives

cooperatives

• owned and run by for their members

• equal voting rights

• profits either shared equally or reinvested for their benefits

-employee

-retail

-community

-financial

-producer

-housing

traditional business

a company that primarily focuses on profit generation

intrapreneurship

innovating within an established organisation, where employees act like entrepreneurs but with company backing

• lower financial risk

• greater stability