Nature Of Business - type of businesses Flashcards
4 business sizes
- Micro-business 1-5
- Small 6-20
- Medium 20-199
- Large 200+
3 geographical spreads of business
- Local
- National
- Global
5 Industry sectors
- Quinary
- Quaternary
- Tertiary
- Secondary
- Primary
Primary industry
businesses involved in the collection of natural resources
Secondary industry
taking a raw material and making it into a finished or semi-finished product
Tertiary industry
involves performing service for other people
Quaternary industry
includes services that involve the transfer and processing of information and knowledge
Quinary industry
service based industry that is done in the home
e.g. someone coming to my house and cleaning to get payed
5 types of legal structure
- Sole trader
- Partnership
- Private company
- Public company
- Government enterprise
Transnational (multinational) corporation
is a company that has branches in many different countires (global business)
Small to medium enterprises (SME)
firms with fewer than 200 full-time equivalent employees and/or less than $10 million turnover
Micro business
employs less than 5 people that represents 88% of the entire small-business population
Geographical spread
the presence of a business and the range of it’s products across a suburb, city, state or country or the globe
Local business
has a very restricted geographical spread; it serves the surrounding area
National business
is one that operates within just one country
Incorporated
refers to the process companies go through to become a separate legal entity from the owner/s
eg
Public company
Private company
Uncorporated
doesn’t give the protection of a company
Sole trader
Partnership
Sole trader
a business that is owned and operated by only one person
unlimited liability
the business owner is personally responsible for all the debts of their business
partnership
a legal business structure that is owned and operated by between 2-20 people (aim to make profit)
incorporation
the process that companies go through to become incorporated (other card)
Limited liability
a feature of corporate ownership that limits each owner’s financial liability to the amount of money they have paid for the business shares
private (proprietary) company
an incorporated business that usually has between 2-50 shareholders
Government enterprises
are government-owned and operated businesses
Privatisation
is the process of transferring the ownership of a government business to the private sector
3 Factors that influence the business owner
- Size of business
- Ownership
- Finances
Why would an owner have to increase their business size?
If sales increase and the business need to grow to meet this higher level of customer demand
float
the raising of capital in a company through the sale of shares to the public
prospectus
a document giving details of a company and inviting the public to buy shares in it
venture capital
money that is invested in small and sometimes struggling businesses that have the potential to become very successful
