Learning Outcome 1

Question 1

Private Sector

Answer 1

-made up of businesses that are owned and operated by private individuals or companies.
-These businesses are driven by the goal of making a profit

Question 2

Key Features of Private Sector

Answer 2

Profit Motive: primary goal is to generate profit for the owners or shareholders.
Private Ownership:
Less Government Control: While still regulated by laws and industry standards, private sector companies generally have more freedom to make decisions compared to public sector organizations.
Competitive Market: Operates in a competitive environment, often striving to offer better products or services than competitors.

Question 3

Examples of Private Sectors

Answer 3

Sole Traders: Small businesses owned by a single individual (e.g., a local hairdresser or plumber).
Partnerships: Businesses owned by two or more people (e.g., a law firm or dental practice).
Private Limited Companies (Ltd): A business owned by shareholders but not publicly traded (e.g., IKEA).
**Public Limited Companies (PLC): **Larger companies whose shares are traded on the stock market (e.g., Tesco PLC).

Question 4

Public Sector

Answer 4

-consists of organizations that are owned and operated by the government (local, regional, or national). Their primary purpose is to provide services to the public rather than to make a profit.

Question 5

Key Features of Private Sector

Answer 5

-Funded by taxes collected from **citizens and businesses.
-Focuses on providing essential services like healthcare, education,** transportation, and public safety.
-Operates under the control and regulation of the government.
-Often has a** monopoly** in certain areas** (e.g., the police force, military).**

Question 6

Examples of Public Sectors

Answer 6

-NHS (National Health Service): Provides healthcare services to the UK population, funded by taxpayer money.
-Public Schools: Offer free education to students, funded by local and national taxes.
-Transport for London (TfL): Manages public transport in London, such as buses, trains, and the underground.

Question 7

Third Sector

Answer 7

-also known as the voluntary sector/non-profit sector.
-key focus is to** provide services, support, or advocacy without a profit** motive, often addressing social, environmental, or community needs.

Question 8

Key Features of Third Sector

Answer 8

Non-profit Orientation: These organizations reinvest any profits back into their cause rather than distributing them as profits or dividends.
Voluntary Involvement: A significant part of the workforce may consist of volunteers.
Diverse Funding Sources: Funding may come from donations, grants, fundraising, membership fees, and government support.
Social Mission: They are mission-driven, focusing on creating social value rather than financial gain.

Question 9

Examples of Third Sector

Answer 9

Charities: Oxfam,The British Red Cross
Community Interest Companies (CICs): Empanda Care and Support, Funky Fitness and fun

Question 10

Sole Trader

Answer 10

Owns and runs the business (Business, Hairdresser)

Question 11

Advantages of Sole Trader

Answer 11

Full Control: The owner makes all decisions independently.
Easy to Set Up: Less paperwork and fewer legal formalities.
Keep All Profits: The owner retains all the profits made by the business.
Confidentiality: Financial information does not need to be published
Can hire whoever

Question 12

Disadvantages of Sole Trader*

Answer 12

**Unlimited Liability: **The owner is personally liable for all debts of the business.
Likely to work long hours
Lenders may be reluctant to give them finance as its risk
Wont benefit economies of scale