sac 1A - AOS 1 managing a business Flashcards
Types of businesses
sole trader, partnerships, private listed companies, public listed companies, social enterprises, government business enterprises
sole trader business (sole proprietor)
a sole trader is owned by a single person who is responsible for all debts and decisions of the business and holds an unlimited liability.
ADS-cheap to set up, owner has control, owner can keep profits, no conflict
DIS-personal assets at risk, long hours and high reliability on owner, work life balance may be affected, financial risk
partnership businesses
a partnership business is owned by 2-20 people who share the responsibility and decisions of the business, also has an unlimited liability.
GENERAL PARTNERSHIP-all Partners are equally responsible for the management of the business and each have unlimited liability.
LIMITED PARTNERSHIP-where the liability for one or more of the partners is limited, will have one or more general partners who have unlimited liability.
ADS-cheap to set up, shared world, debts shared, easier to raise more capital, different skills, can continue is partner leaves
DIS-personal assets at risk, profit shared, potential for disagreements, allowable for each individuals actions
private limited companies (proprietary limited company)
restricted to 50 shareholders
limited liability meaning th shareholders legal liability is limited to the extent of the value of there shareholding.
shares are sold privately and are not publicly traded, needs permission from shareholders. Pty ltd after name.
ADS-limited liability, company is a seperate legal entity from shareholders, capital can be raised by offering more shares, pay company tax rather than income tax on profits
DIS-more expensive to set up, more reporting requirements, restricted number of shareholders, shares cannot be traded freely
public listed company
company is listed on an exchange such as he Aus securities exchange and it shares can be traded (brought and sold) by the general public. company can raise money by offering shares and shareholders own part of the company and gets to share any profit through dividends and capital gains in share price.
ADS-greater ability to raise large amounts of capital through share offers, limited liability, seperate legal entity from shareholders, company tax rather than income tax
DIS-large expense to set up, current ownership is shared to thousands of people, don’t have full control, large reporting requirements, loss of control over who owns shares in the company.
social enterprise
a social enterprise is a business that exists primarily to fulfil a vision that benefits the public or community other than shareholders. different t the many organisation that have social objectives which are generally to help it be more financially valuable. not a charity. it’d also not non-profit, it does aim to make a profit but a profit that put towards a social or community cause instead of for personal gain. eg thankyou water
government business enterprise
a government business enterprise is an organisation that undertakes commercial activity on behalf of the government. owned and run by the government. run just like any other organisation and aims to make a profit. eg Aus post
vision, mission and objectives
vision- what the business wants to become
mission- what the business stands for, its purpose and how it intends to get there eg. Starbucks mission statement is to inspire and nurture the human spirit- one person, one cup and one neighborhood at a time
objectives- specific goals that will help the business and its employees achieve the mission and vision eg profit or market share
business objectives
to make a profit: revenue-expenses=profit
increase by increasing revenue or minimising expenses
allows business to grow and expand and gives employers more job security
increase market share: the proportion of the market controlled or owned by a particular business or product
to fulfil a market or social need: as customers always have changing needs and wants, business want to try and fulfil those needs and wants to attract customers to them
to meet shareholder expectations: shareholders are those who own the business and they expect to make a return on their investment through capita gains and dividends.
improve productivity: how efficiently an organisation is anew to produce its goods or services.
customer service
stakeholder interests in business
employees- income and good workplace
suppliers- rely on them for their own business to continue running
customers- good service, cheap prices, reliability
owners- profit, high market share and good reputation
competitors- want a higher % of market share so don’t want them to do too well
government- want to make sure al laws and regs are followed and good treatment of customers
stakeholder conflicts
between customers and government:
customers want efficient service, low costs ad reliability but the government want also a great service to be provided but also want a profit out of it which can be hard when they are paying for all costs which are high, while they have customers who are wanting low costs
between employees and owners:
employees want high income but owners want high profit so by looking at the employees interests it comes out of the owners interests causing conflict.
management responsibility- operations
all about getting the input to the output in the best and most efficient way possible.
eg, ordering and sourcing stock, minimising waste, ensuring expectations are met and redesigning the sequence of production
management responsibility- finance
an area of responsibility concerned with controlling the activities to do with spending and receiving money within the business. activities include budgeting, financial planning, managing day to day payments and receipts and auditing the business accounts.
management responsibility- human resource managers
an area of responsibility concerned with managing the employees and all aspects of their working relationship with the business. activities include the recruitment, selection, training, motivation, and ultimate termination of employees as well as employment terms and conditions and labour laws
management responsibility- sales and marketing
an area of responsibility connecting the goods and services produced with their end consumers.
activities include determining the product features, pricing, promotion, distribution, consumer service and after sales support.
