LO1 - Understand different types of businesses and their objectives Flashcards
Purpose and Examples
Different types of business activity and their function
- Primary (Production, e.g: farmer)
- Secondary (Buying and Selling, e.g: bakery)
- Tertiary (Service, e.g: teacher)
Define and give examples of
Different sectors of operation
- Public (Government-owned, e.g: Hospital)
- Private (Aim is to make money, e.g: Construction)
- Third (Charity, e.g: Cancer research UK)
Advantages and Disadvantages of
Sole Trader Ownership
+Less paperwork
+More earning potential
-Unlimited liability
-Higher working hours
Advantages and Disadvantages of
Partnership
+Less workload
+More variety of skills
-Unlimited liability
-Profit is shared
Advantages and Disadvantages of
ltd.
+Limited liability
+Lower taxation
-Higher set-up costs
-Harder to control workers
Advantages and Disadvantages of
plc.
+Growth and expansion oppurtunities
+Raise capital by selling shares
-Risk of take over
-Lots of work is required
Advantages and Disadvantages of
State/Government Owned
+Stable funding
+Reduced Competition
-Slow decision making
-Less flexibility
Advantages and Disadvantages of
Charities
+Tax benefits
+Enhanced reputation
-Limited profit
-Limited control
Advantages and Disadvantages of
Community Interest Companies (CIC)
+Enhanced reputation
+Retention of customers
-Limited profit
-Funding challenges
Factors which inform business ownership
- legal status
- liability
- funding
- control/decision making
- legal/administrative requirements
Differing business aims and objectives
- Survival
- Financial
- Growth
- Reputation
- Environmental
