Unit 1.1 Business Aims, Objectives And Organisation Flashcards
What is an objective?
An objective is what needs to be done in order to achieve this aim.
What is a mission statement?
A statement that tells employees, customers and stakeholders what the business’ purpose and aim stand for
What are the benefits of a sole trader?
- Easy to set up and give a personal service
- Owner can make quick decisions (independent)
- Minimal paperwork
- Knows customers - helps to avoid debts
What are the disadvantages of a sole trader?
- Unlimited liability
- Long hours, no cover for holiday / sickness
- Capital may come from savings
- Needs business skills
What are the advantages of a partnership?
- Easier to raise capital
- Problems / ideas can be discussed
- Greater range of skills / expertise
- Cover for holiday / sickness
What are the disadvantages of a partnership?
- Unlimited liability
- Profits are shared
- May be disagreements
- Death of a partner men’s share needs repaying
What are the advantages of PLC?
- Limited liability
- Increased capital, public can buy shares
- Minimum of 2 directors and 2 shareholders
- Shares increase in value if successful
- Operating large scale can lower costs per unit
What are the disadvantages of a PLC?
- Many regulations to comply with
- Public will know accounts and of any problems that occur
- Shareholders may sell shares if dividends poor
- Original owner may lose overall control
What are the advantages of a LTD?
- Limited liability
- Minimum of 1 director and 1 shareholder
- Easy to set up
- Easier to raise capital / borrow from bank
What are the disadvantages of a LTD?
- Cannot sell shares to the public
- More regulations to comply with
- Accounting procedures may be more costly
What are the advantages of a franchise?
- Less risky than starting own business
- Selling a known name
- Advice and guidance available
- Owner keeps most of the profit
What are the disadvantages of a franchise?
- Share of profit goes to franchiser
- Franchisee must abide by legal agreement
- Only franchiser products can be sold
- Success very dependent on popularity of product
What are the advantages of a co-operative?
- Each owner has equal share / one vote
- Profits are shared equally
- Can have limited liability status
- Workers can decide whether to be owners
What are the disadvantages of a co-operative?
- Obtaining finance may be difficult
- Decisions by consensus takes time
- ‘Hard’ decisions may be difficult to make
- Equality can be hard for good leaders / workers
What is an aim?
An aim is what the business is trying to achieve in the end - what the final target is;
