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LO1 Knowledge Organizer (Legal ownerships (Partnership (*Minimum of 2,…
LO1 Knowledge Organizer
Types of Business
Secondary
Manufacturing materials into something
Tertiary
Providing a service
Charities are also in this sector
Primary
Raw material production
Business Sectors
Private
Intention to make profit, funded by profits.
Third Sector
(Not For Profit) Not Government owned, funded by donations, fundraisers & Grants to pay salaries (Don't have to pay VAT and get Tax relief)
Public
Owned, Control & Financed by Government Public Services
Privatisation
Introduced in mid 80's. Alot of public sector work sold to private organizations.
Legal ownerships
Partnership
*Minimum of 2, Legal Document needed, Simple & Minimal paperwork, Jobs can be shared, Easier to raise finance, Harder Decision making, One partner leaves = Partnership fails, Shared Profits, Partnership Agreement
Private Limited Company
Raise Funds through Family & Friends, Shares aren't listed on Stock Market. Limited Liability, Can sell shares, stable structure (People can leave), Owners can retain control, shareholders must agree on profit, Finance limited to Private Investment, Legal duties = Stricter, Certificate of Incorporation.
Sole trader
*1 Person, Employs others to work for them, Legal responsibilities on Owner. Keep all profit and more choice over business, Difficult to raise finance & Heavy workload, no Document needed
Public Limited Comp.
Complicated & Expensive to set up, Raise funds easily through stock market, Shareholder is publicly available, Limited Liability, Shareholders have to agree on profit distribution, Big administrative cost, Risk of takeover
State/Government owned
Government = Majority shareholder, Board of Directors, 1 Provider in most areas, Better survival, Cost effective for consumer, Doesn't answer to shareholders, May lose sight of cost control, exploitation - political gain
Charity/Not-for-profit
Voluntary, Limited companies with this aim, Charities commission control registration, Easy to setup, Big ones benefit from being limited company, Tax reduction, Hard to get volunteers, inconsistent funding, annual accounts to Companies house & Charity comission
Community Interest Company
Objectives>Profit, Funds need to be raised, 50% of surplus money reinvested, Limited company that benefits community over Shareholders, Need: Community Interest statement, Asset Lock and Dividend Cap
2 Types - LLP & Partnership
Incorporation
Process of registering a business as a formal entity
Business Plans
Why
Survive, Develop ideas, Avoid Unnecessary risk, Meet Objectives, Set/Explain Objectives, Support Finance Growth
What's in it
Name, Aims & Objectives, Products/Services, Market Analysis, Competition, Budget, Sales & Cash flow Forecast, Profit & Losses, Funding, Location, Staffing
Factors to inform Ownership
Funding
Who has Control
Liability
Limited or Unlimited
Legal/Administrative Requirement
What Document is req. to set up business
Legal status
Corporated or Incorporated
Financing
Factors
Amount, Reason, Circumstances, Legal status
Internal Sources
Retained Profit (Long term), Savings (Long Term)
Why is it needed
Start-up/Running costs, Expansion, Replacements, Development
External Sources
Trade Credit (Short Term), Overdraft (S.T.), Credit Card (S.T.), Hire Purchase (L.T.), Bank Loan (L.T.), Mortgages (L.T.) New-share Issue (L.T.), Venture Capital (L.T.)
Marketing Strategy
Promotion
People
Place
Process
Price
Product
Marketing Mix
Ansoff Matrix
Physical
Marketing & Sales
Marketing
Analysis
Mix
Research
Sales
Customer Retention
Analysis
Customer Engagement
H.R.
Pay & Benefits
Legal Compliance
Training
Redundancy & Dismissal
Recruitment & Selection
Grievance & Discipline
Production
Job Production - Product is produced to meet specific customer requirements
Flow Production - Continuous movement of items through production process, use production lines
Production - Turning raw materials/materials into goods/services that can be sold
Batch Production - Many similar items produced together, each batch goes through 1 stage process before moving to the next