1. types of business and business activities
Post on 07-Jan-2016
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Introduc*on to Business
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Marking
60% of the mark
Final Exam
40% of the mark Case studies prepare them at home in groups of 3 before the lesson
You will be asked to present your case study ndings
Class par*cipa*on also taken into account
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Introduc*on to Business
1. Types of businesses and business ac*vi*es 2. Growth and Strategic Planning 3. Analyzing the compe**ve market and
business analysis 4. Developing a strategy and compe**on in
markets 5. Distribu*on 6. Finance and accounts
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WHAT IS A BUSINESS AND WHAT IT DOES?
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What is a business?
A BUSINESS is the organized eort of individuals to produce and sell, for a prot, the goods and services that sa*sfy societys needs.
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What business do?
Meet the needs of stakeholders Buy inputs (raw materials, machinery, land) Produce outputs (goods and services) Focus on ecient use of resources Generate prots/surplus (non-for prot)
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What business do?
Who are stakeholders: Anyone who has an interest or concern in the organisa6on: - Customers - Local community - Government - Suppliers - Owners - Creditors - Employees
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What business do?
Take Inputs Process/Manufacture Output
Costs Fixed and Variable Revenue
Profit
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Business objec*ves
Businesses exist to provide goods or services to its customers Whether they have to make prot or not they have to sa*sfy the needs and wants of its customers
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Why set up a business?
There can be many dierent mo*va*ons for people to set up a business: - Fed up with working for someone else - Quality of life - Buzz of success - Feel in control - Financial reward - I could do beker than that
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Why set up a business?
Advantages: Ease of Start-up and Closure Pride of ownership Reten*on of all prots Flexibility you are your own boss
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Why set up a business?
Dissadvantages: Unlimited liability Lack of investment money High risk of going under (sta*s*cally)
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Types of businesses
Private Sector: Business ac*vity owned nanced and controlled by private individuals
Sole Ownership Partnerships
Private Limited Companies Public Limited Companies (PLCs)
Co-opera*ves Franchises Chari*es
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Types of businesses
Sole Proprietorship/Ownership: You are the only owner of the company Unlimited liablity Partnerships: General Partners at leat two partners sharing unlimited liability for the all debts Limited Partners General Partner(s) + Limited Partner(s);
- Limited Parner(s) invests money - no managerial responsibility - liability for losses - only his investment
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Types of businesses
Public Limited- Liability Companies: Ownership stockholders Shares available at the stock market Private Limited-Liability Companies: Shares available privately Management Flexibility Tax Benets
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Types of businesses
Co-opera*ves: Associa*on of individuals or rms whose purpose is to perform some business func*on for its members. Franchize: A privilege license granted to produce or sell a good or service under a patented process or trademarked name.
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Types of businesses
Joint Ventures Agreement between two or more businesses crea*ng a separate business en*ty to achieve a specic goal. Non-prot organisa6ons Organized to provide a social, educa*onal, religious, or other service not to earn a prot - chari*es, museums, private schools and universi*es, Ensures limited liability.
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Objec*ves of Private Sector Business
Objectives
Profit Survival
Share Price
Market Power Sales and Sales
Revenue
Efficiency
Quality and Innovation
Image and Reputation
Environment
Satisfaction
Social Issues
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The Public Sector
Public Sector: Business Ac*vity owned, nanced and controlled by the state through government
or local authori*es Government key departments set policy and monitor
implementa*on Local Authori*es County Councils, District Councils, Parish Councils
Health Trusts Public Corpora*ons BBC
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The Public Sector
Objec6ves of Public Sector Ac6vity Access
available to all regardless of loca*on or income Quality
high quality services that do not cut corners Aordability
services oered at prices that are cheaper than private sector or free at the point of use
Equity available to anyone whatever their background, status,
income, class, race, religion, etc
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Range of Business Oered by the Public Sector
Roads Allotments Museums and Arts
Paths and Parks Environmental Health Cemeteries
Planning Street Ligh*ng Licensing
Care of the Elderly Social Services Waste Disposal
Schools Economic Development and Tourism Trading Standatds
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Business Ac6vity
Business ac*vity can be conveniently divided into 4 sectors:
Primary sector Extrac*on of raw materials from earth mining,
quarrying, shing, agriculture, forrestry Secondary sector
Manufacturing processing raw materials into nished or semi-nished products
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Business Ac6vity
Ter*ary sector Service industries leasure, transport, nance,
distribu*on, retailing, wholesaling, communica*ons Quarternary sector
Research and Hi-tech indus*res, training, educa*on, health
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Business Ac6vity
Mul*ple Business Ac*vity e.g. BP involved in:
Oil explora*on and drilling (Primary) Rening oil produc*on of gas, petroleum, bitumen, lubricants, etc. (Manufacturing)
Distribu*on of petrol from reneries to petrol sta*ons and sales of petrol to consumer (Ter*ary)
Research and Development (Quarternary)
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