1. Business Structure

2. Which groups are involved in the
business activity?
• Owners
• Workers
• Managers
• Consumers
• Government
• The community as a whole

3. Work in groups and find out about
each group.
• What does each group do?
• Why is each group important?

4. KEY WORDS
• After working in groups try to form sentences
looking a the key words.

5. OWNER
• put money
• take a share of the profits
• pay for any losses
• taking risks

6. • follow instructions
• are employed
• have part-time or full-time contracts.
• earn money for the work
• need training
WORKERS - EMPLOYESS

7. Managers
• are employed to control the work done by
other workers
• give instructions
• organise
• take decision

8. • customers
Consumers

9. Government
• decides on laws

10. WORKERS - EMPLOYESS
• Workers are employed in the business. They have to
follow instructions given to them by the owners or
managers. They may have part-time or full-time
contracts. These are legal documents which give
details of the hours of work and other conditions of
employment. Workers earn money for the work they
do and this is usually a weekly wage or monthly salary.
Often workers need training to do their work well. If
there is not enough work for all workers in a
business, some may be made redundant
(retrenchment), that is, they may be asked to leave the
business. This could be of great concern to the workers
involved

11. OWNER
• Owners put money into the business to set it up.
Without this capital, no business activity can
begin. The owners will take a share of the profits
if the business is successful. They may have to
pay for any losses made. All owners are taking
risks. Putting money into a business will not
guarantee success. If the business makes the
wrong type of product or does not attract enough
consumers, the owners may lose their money.
Owners are therefore risk-takers.

12. Managers
• Managers are employed by the business to
control the work done by other workers. They
give instructions to other workers, organise the
resources of the firm and take important
decisions. These decisions might include where
to locate the business, what to produce and what
price to sell products for. If these decisions are
successful, the business does well. If managers
make poor decisions, the business could fail.
Good and successful managers often earn very
large salaries

13. Consumers
• Consumers are important to every business.
They are the customers who buy the product
or service that a business makes. Without
consumers buying enough products, a
business will make losses and eventually fail.
Businesses need to find out what products
consumers are prepared to buy. This is called
market research Consumers must then be
attracted to the product by advertising and
other forms of promotion.

14. Government
• The government decides on laws which will
affect business activity. The government wants
businesses to be successful in its country.
Successful businesses will employ more
workers and reduce the numbers
unemployed. When successful businesses
make profits, a tax must be paid to the
government. This money can be used to pay
for the services which government provides
for the benefit of the population.

15. The whole community
• Business activity affects the whole community. Land
and resources are used up during business activity.
Sometimes businesses produce goods which can be
dangerous and might harm members of the
community -such as cigarettes and cars. Factories can
produce harmful pollution. Some products are very
beneficial to the community, such as medicines or
buses for public transport. In addition, business activity
provides jobs for workers and managers and incomes
are paid to these groups. This raises the community's
standard of living. The whole community can
therefore be affected by business activity in both
positive and negative ways.

17. Types of businesses
• Large or small businesses
• Privately owned or owned by the state.
• Owned by one person or by thousand of shareholders.

18. Business Structure
12/04/12
Owners have to decide on the best legal structure for their
business - opting to run as sole traders, partnerships or
private limited companies. As the business expands and
starts to employ hundreds of staff in many locations, it may
decide to become a public limited company or to offer
franchises.

19. Sole traders
A sole trader describes any business that is owned and
controlled by one person - although they may employ
workers. Individuals who provide a specialist service like
plumbers, hairdressers or photographers are often sole
traders.
Sole traders do not have a separate legal existence from
the business. In the eyes of the law, the business and
the owner are the same. As a result, the owner is
personally liable for the firm's debts and may have to
pay for losses made by the business out of their own
pocket. This is called unlimited liability.

20. Sole trader
Advantages
• It is easy to set up as no
formal legal paperwork is
required.
• Generally, only a small
amount of capital needs to
be invested, which reduces
the initial start-up cost.
• As the only owner, the
entrepreneur can make
decisions without
consulting anyone else.
Disadvantages
• The sole trader has no one to
share the responsibility of
running the business with. A
good hairdresser, for
example, may not be very
good at handling the accounts.
• Sole traders often work long
hours. They may find it
difficult to take holidays or
time off if they are ill.
• They face unlimited liability if
the business fails.