Week 1 - Business Objectives and Strategies Flashcards
What are the three different business sectors?
- private sector
- public sector
- voluntary sector
What is the public sector?
- commercial organisations who aim to profit from their business
What is the private sector?
- non-commercial sector who aim to provide education and services to people
What is the voluntary sector?
- non-commercial but rely on sponsorships or memberships for4 income
In the private sector, business can be categorised into which two categories?
- unincorporated businesses
- incorporated businesses
What are two examples of incorporated businesses?
- Private Limited Company (LTDs)
- Public Limited Company (PLCs)
What are two examples of unincorporated businesses?
- sole trader
- partnership
What are the characteristics of a sole trader?
- Any business owned and controlled by one person
- Provides specialist services
- They have UNLIMITED LIABILITY (personally responsible for all debts run up by company and have no legal entity)
How many people own a sole traded company?
- Business owned and controlled by one person
What type pf services do sole traded companies provide?
- specialised services
What is meant by unlimited liability?
- an owner of a company personally responsible for all debts run up by the company which has no legal entity
What are the characteristics of the partnership business structure?
- Any business owned by two or more people
- benefit from shared expertise
- They have unlimited liability
How many people are partnership businesses owned by?
- Any business owned by two or more people
What are some pros of being a sole trader?
- Easy to setup
- Full control and ownership
- Data is kept private
What are some cons of being a sole trader?
- Work long hours
- No shared responsibility
- Unlimited liability
What are some pros of having the partnership business structure?
- Specialisation
- Less time pressure
- Decision making
What are some cons of having the partnership business structure?
- Shared responsibility
- Shared profits
- Unlimited liability
What are the characteristics of limited companies?
- Have their own legal identity (incorporated)
- Owners are not liable for debt (limited liability)
- Divided into shares
- Owned by shareholders
What are some pros of private limited companies (LTDs)?
- Limited liability
- Incorporated
- Easier to setup than PLCs
What are some cons of private limited companies (LTDs)?
- Less capital than PLCs
- Auditing costs
- Conflict with friends/family
What are some pros of public limited companies (PLCs)?
- Limited liability
- Incorporated
- Access to more investors
What are some cons of public limited companies (PLCs)?
- Auditing costs
- Greater public scrutiny
- Loss of control and ownership
What is meant by the aims of a business?
- What the business wants to achieve
- Outlined in a vision statement
What is meant by the objectives of a business?
- Targets and steps taken to achieve business aims
- Outlines in mission statement
What is meant by the strategy of a business?
- Allocating business resources to achieve a long-term goals
Where are the aims of a business outlined?
- In the vision statement
Where are the objectives of a business outlined?
- In the mission statement
What are SMART targets?
- Specific (What is your goal?, How often/how much?, Where will it take place?)
- Measurable (How will goal be measured? allows feedback and accountability)
- Attainable (Are goals achievable)
- Realistic (Is goal and timeframe realistic)
- Timely (Is there a timeframe listed for goal)
What are 3 types of business strategies?
- Annual plans (short0term plans)
- Intermediate plans (medium-term plans)
- Strategic plans (long-term plans)
