how to classify businesses Flashcards
profit
a. ) For profit - the goal of most businesses is to make a profit by supplying goods/services to meet customer demands/to make money. To be successful, a for-profit business must earn more profit while keeping both expenses and costs down. Revenue - Expenses = Profit/Loss
b. ) Non profit - the goal is to raise funds for a purpose. Charities, etc.
c. ) Not for Profit - surplus funds are used to improve services for members.
d. ) Cooperative - a group of people who own a business together and share in the decision making.
size
Most businesses are medium sized, meaning less than 500 people. There are 1,000,000 of these in Canada, employing over 60% of the Canadian population.
- Form of Ownership
sole proprietorship: features: one owner of the business/ company easy to start/ end pros: be your own boss profits to sole owner financing difficulties cons: limited liability owner may not be familiar with all aspects of business
partnership: features: 2< partners written partnership agreement pros: more capital & financing shared responsibilities cons: unlimited liability in general partnerships partner disagreement
corporate: features: mainly shareholders 1 vote/share has a board of directors pros: limited liability transfer of ownership is simple cons: timely and costly startup people who own only a few shares don’t have influence on how the company is run
co-op features: owned by members 1 vote/share has a board of directors pros: less expensive goods/services easily set up cons: decision making process can be difficult
franchise: features: hybrid type of ownership pros: brand recognition shared marketing corporate training & support cons: franchise fee monthly fee requirement to buy from franchises
- Goods/Services
a. ) Goods are tangible items.
b. ) Services are not tangible, people do things for you.
- channels of distribution
How businesses get their goods/services to clients or customers.
6.Types of Jobs it Provides
low skill low pay, high skill high pay, etc.
