Your SlideShare is downloading. ×
0
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Unit 1.1 Slides
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Unit 1.1 Slides

3,446

Published on

Published in: Business, Economy & Finance
1 Comment
6 Likes
Statistics
Notes
  • brother please unloc ur nice presentation for all the studnet around the world..
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Views
Total Views
3,446
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
0
Comments
1
Likes
6
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Unit 1.1 What do businesses do?
  • 2. Needs and Wants <ul><li>A Need is a basic thing humans have to have in order to survive. I.e. Food, water, shelter and clothes are all needs. </li></ul><ul><li>A Want is something extra we would like to have. They can be luxuries or time saving devices. Cars, mobile phones, computers and CDs are all wants </li></ul>
  • 3. Goods and Services <ul><li>A Good is something you can touch and feel. </li></ul><ul><li>Goods can be non-durable, durable or industrial </li></ul><ul><li>A Service is provided by someone else. A service is non-physical. </li></ul><ul><li>Hairdryer is a good. A Hairdresser is a service. </li></ul>
  • 4. Business Size <ul><li>Small </li></ul><ul><li>Medium </li></ul><ul><li>Large </li></ul>
  • 5. Business Size Employees: 250 + Employees: 50-250 Employees: <= 50 Sells locally, nationally and internationally Reaches locally and/or nationally Sells goods locally Owned by shareholders; run by directors Owned by a group of people Owned by sole trader or partnership Large Business Medium-Sized Business Small Business
  • 6. Business Sectors <ul><li>Private Sector </li></ul><ul><li>Public Sector </li></ul><ul><li>Voluntary Sector </li></ul>
  • 7. Private Sector <ul><li>Businesses driven by profit. </li></ul><ul><li>That profit only benefits the owners and investors. </li></ul><ul><li>Financed by private money from shareholders and bank loans </li></ul>
  • 8. Public Sector <ul><li>Provide goods and services for the benefit of the community </li></ul><ul><li>Run by the Government. </li></ul><ul><li>Public money from taxes </li></ul>
  • 9. Voluntary Sector <ul><li>Not driven by profit but by need to help parts of the community </li></ul><ul><li>Money from donations and gifts </li></ul>
  • 10. Types of Ownership <ul><li>Sole Trader </li></ul><ul><li>Partnership </li></ul><ul><li>Private Limited Company </li></ul><ul><li>Public Limited Company </li></ul><ul><li>Franchise </li></ul><ul><li>Co-operative </li></ul><ul><li>Government-Owned </li></ul>
  • 11. Sole Trader <ul><li>A Sole Trader is a business owned by one person. </li></ul><ul><li>Some examples are: </li></ul><ul><li>Mechanic </li></ul><ul><li>Butcher </li></ul><ul><li>Hairdresser </li></ul><ul><li>Hot Dog Vendor </li></ul>
  • 12. Features of Sole Trader <ul><li>One man/woman business </li></ul><ul><li>Sole Trader owns business. Owner and business are the same </li></ul><ul><li>Owner provides own capital (savings & borrowings) </li></ul><ul><li>Profits go to the owner but responsible for losses (Unlimited liability) </li></ul><ul><li>Owner controls business, all decisions are theirs </li></ul>
  • 13. Sole Trader <ul><li>Advantages </li></ul><ul><li>Owner has total control </li></ul><ul><li>Owner keeps all profits </li></ul><ul><li>Owner has better job satisfaction </li></ul><ul><li>Disadvantages </li></ul><ul><li>Unlimited liability </li></ul><ul><li>Hard to raise capital </li></ul><ul><li>Owner is responsible </li></ul><ul><li>High failure rate </li></ul>
  • 14. Partnership <ul><li>Business owned by 2-20 people </li></ul><ul><li>Examples: </li></ul><ul><li>Doctor </li></ul><ul><li>Dentist </li></ul><ul><li>Lawyer </li></ul><ul><li>Accountants </li></ul>
  • 15. Features of Partnership <ul><li>A business owned by several people 2-20 </li></ul><ul><li>Deed of Partnership – contract dealing with share of profits, roles and duties, capital contributed, dispute procedures </li></ul><ul><li>Owned jointly but not always equally </li></ul><ul><li>Partnership is an extension of sole trader </li></ul><ul><li>Capital provided by partners </li></ul><ul><li>Profit goes to partners, not always equally </li></ul><ul><li>All partners entitled to participate in management (unless silent partners ) </li></ul>
  • 16. Partnership <ul><li>Advantages </li></ul><ul><li>Able to specialise </li></ul><ul><li>Do not have total responsibility </li></ul><ul><li>More ideas </li></ul><ul><li>More money </li></ul><ul><li>Can borrow more money easier </li></ul><ul><li>Disadvantages </li></ul><ul><li>Unlimited liability </li></ul><ul><li>Risk of conflict </li></ul>
  • 17. Private Limited Company <ul><li>Shareholders – a part-owner of a business. </li></ul><ul><li>Limited liability – shareholders are only liable for debts equal to value of their shares. </li></ul><ul><li>Dividends – the share of profits received by shareholders </li></ul>
  • 18. Features of Private Limited Companies <ul><li>Organisation owned by a group of individuals </li></ul><ul><li>Memorandum/Articles of Association </li></ul><ul><li>Owned by Shareholders (usually family) whose main function is to elect Board of Directors </li></ul><ul><li>Money raised by share issue or borrowing </li></ul><ul><li>Ordinary Shares & Preference Shares </li></ul><ul><li>Profit shared between shareholders or retained by company </li></ul>
  • 19. Private Limited Company <ul><li>Advantages </li></ul><ul><li>Company is a legal entity </li></ul><ul><li>Easy to raise capital </li></ul><ul><li>Limited liability </li></ul><ul><li>Company keeps going regardless of changes in personnel </li></ul><ul><li>Disadvantages </li></ul><ul><li>Complicated rules to set-up business </li></ul><ul><li>Audited accounts need to be made public </li></ul>
  • 20. Public Limited Company <ul><li>Has plc after the name </li></ul><ul><li>Limited liability </li></ul><ul><li>Minimum £50,000 share capital </li></ul><ul><li>Shares sold by banks and stockbrokers </li></ul><ul><li>Shares can be offered to general public </li></ul><ul><li>Private limited companies become PLCs to raise money for expansion </li></ul>
  • 21. Features of plcs <ul><li>Org. owned by a group of individuals, has plc after name </li></ul><ul><li>Certificate of Incorporation approved by Registrar of Companies </li></ul><ul><li>Shareholders 2+. Shares sold on stock exchange. Prospectus prepared to attract shareholders </li></ul><ul><li>Capital raised by share issue or borrowing </li></ul><ul><li>Profits shared between shareholders or retained by company </li></ul><ul><li>Board of Directors = Divorce of ownership and control </li></ul>
  • 22. Advantages & Disadvantages of PLCs <ul><li>Advantages </li></ul><ul><li>Shareholders limited liability </li></ul><ul><li>Sale of shares raises money </li></ul><ul><li>Shareholders recoup money by selling shares </li></ul><ul><li>Directors may be experts in their field </li></ul><ul><li>Disadvantages </li></ul><ul><li>Number of legal requirements </li></ul><ul><li>Company accounts made public </li></ul><ul><li>Directors report to shareholders at AGMs </li></ul>
  • 23. Charities <ul><li>A charity is an organisation set up to raise funds to help other people or causes. </li></ul><ul><li>Charities have to register and publish their accounts. </li></ul><ul><li>Unlike voluntary organisations, charities employ managers and workers. </li></ul><ul><li>Cancer Research, Save the Children and Oxfam are well known charities. </li></ul>
  • 24. Charities <ul><li>Advantages </li></ul><ul><li>If charity has status of charitable trust it doesn’t pay tax   </li></ul><ul><li>Looks after less privileged and the environment </li></ul><ul><li>Disadvantages </li></ul><ul><li>Less money may be donated due to introduction of lottery </li></ul><ul><li>Relies on voluntary workers who may not be paid for work </li></ul>
  • 25. Franchise <ul><li>A franchise is a business marriage between an existing business and a newcomer </li></ul><ul><li>The franchisee buys permission to copy the business idea of the established company </li></ul><ul><li>McDonald’s is a franchise </li></ul>
  • 26. Franchise <ul><li>Advantages </li></ul><ul><li>Franchisor provides a lot of support; training to start business, equipment, materials, advice, brand name </li></ul><ul><li>Take over a successful, winning formula </li></ul><ul><li>Disadvantages </li></ul><ul><li>Franchisee doesn’t have complete freedom </li></ul><ul><li>May not agree with decision placed upon you </li></ul>
  • 27. Co-operative <ul><li>A co-operative is a business owned and operated by its workers </li></ul>
  • 28. Co-operative <ul><li>Advantages </li></ul><ul><li>Members in control </li></ul><ul><li>Members have interest in business doing well </li></ul><ul><li>Members share profits </li></ul><ul><li>Disadvantages </li></ul><ul><li>New workers need to buy shares </li></ul><ul><li>Often pressured to sell if successful </li></ul><ul><li>Need new workers to expand </li></ul>
  • 29. Government Owned <ul><li>Central </li></ul><ul><li>Local </li></ul><ul><li>Public Corporations </li></ul>
  • 30. Central Government <ul><li>Advantages </li></ul><ul><li>Shareholders limited liability </li></ul><ul><li>Easy to raise finance </li></ul><ul><li>Disadvantages </li></ul><ul><li>Expensive to set up </li></ul><ul><li>Accounts need to be made public </li></ul>Provides services to public for nothing or a fee. NHS is paid for by tax ( income tax , VAT, National Insurance )
  • 31. Local Government <ul><li>Advantages </li></ul><ul><li>In touch with local needs </li></ul><ul><li>Disadvantages </li></ul><ul><li>Can be politically driven </li></ul>Run by local councils providing a variety of vital services to the area ( police, fire, roads, libraries ). Can be done by local council or contracted out .
  • 32. Public Corporations Set up by an Act of Parliament and directors appointed by the Government. Very rare. ( BBC, Post Office, Bank of England)
  • 33. Public Sector Organisations <ul><li>Businesses set up by an Act of Parliament </li></ul><ul><li>Government provides capital through Treasury </li></ul><ul><li>Govt. appoints Chairman and Board </li></ul><ul><li>They may be natural monopolies </li></ul><ul><li>May be unattractive to private sector due to enormous capital investment </li></ul>
  • 34. Public Corporations <ul><li>Reasons for being set-up: </li></ul><ul><li>To avoid wasteful duplication and confusion </li></ul><ul><li>To set up and run important non-profitable services </li></ul><ul><li>To prevent exploitation of consumers </li></ul><ul><li>To protect jobs and key industries </li></ul>
  • 35. Privatisation <ul><li>The selling off of Public Corporations to the private sector </li></ul><ul><li>Why Privatise? </li></ul><ul><li>To improve efficiency by introducing competition </li></ul><ul><li>Shareholders in Modern Society </li></ul><ul><li>Privatisation raises huge monies for government </li></ul>
  • 36. Factors of Production <ul><li>Land – all natural resources used in production </li></ul><ul><li>Labour – all people used in production </li></ul><ul><li>Capital - all items used to make other things in production </li></ul><ul><li>Enterprise – the art of bringing together the other factors of production and being successful </li></ul>
  • 37. Types of Production <ul><li>Primary </li></ul><ul><li>Secondary </li></ul><ul><li>Tertiary </li></ul>
  • 38. Primary Sector <ul><li>This covers raw materials which are straight from land, sea and air </li></ul><ul><li>Mining </li></ul><ul><li>Farming </li></ul><ul><li>Fishing </li></ul><ul><li>Oil and gas </li></ul>
  • 39. Secondary Sector <ul><li>This uses the raw materials and turns them into finished goods </li></ul><ul><li>Car manufacturing </li></ul><ul><li>Engineering </li></ul><ul><li>Shipbuilding </li></ul><ul><li>Electronics </li></ul>
  • 40. Tertiary Sector <ul><li>This covers all services : </li></ul><ul><li>Insurance </li></ul><ul><li>Education </li></ul><ul><li>Fire Service </li></ul><ul><li>Health Service </li></ul><ul><li>Leisure Industry </li></ul>
  • 41. Production Chain <ul><li>Production is the transformation of raw materials into the finished product </li></ul><ul><li>IPO or Input – Process - Output </li></ul>
  • 42. Creating Wealth <ul><li>Wealth is created by adding value to each stage of the production process </li></ul><ul><li>Selling Price = Cost of materials + Value </li></ul>

×