Business
Forms of ownership
Functional areas of business
and there responsibilities
Break even analysis
sole traider
partnership
partnership agreement
limited availability
unincorporated business
incorporated businesses
shareholders
franchise
A business owned by one person only.
a form of business in which 2 or more people jointly own a business
a written and legal agreement between business partners. It is not essential to have this but is recommended
The owners of a limited company. They buy shares which represent part of the company
Companies that have separated legal status from their owners
one that does not have a separate legal identity. Sole traders and partnerships are unincorporated businesses
A business based upon the use of the brand names, promotional logos and trading methods of an existing successful business. The franchisee buys the license to operate this business from the operator
the liability of shareholders in a company is only limited to the amount they have invested
No functional area in a business organisation can work in isolation. In a small firm, links and interactions between people responsible for different functions are usually informal and continuous. Sales people know which customers still owe money and must not be sold any more goods on credit until a bill has been paid; the manager knows which members of staff are keen and hardworking, without being told, and a customer query can quickly be solved by asking everyone in the office for advice
different functional areas of a business
Sales and Finance
R & D and Production
Sales and Production
HR and other functional areas
Sales and Marketing
Distribution and Finance
Finance and other depts
Customer Service, Sales and Marketing
HR and Finance
Distribution and Sales
Sales must know production schedules and agree delivery dates of orders with Production so customers are not promised dates which cannot be met.
Production must tell Sales about production problems which will affect customers
Finance must know about customer enquiries to check their credit rating before sales are made. Finance will be involved when discounts are agreed or when there are problems with customer payments
Finance must know when goods have been despatched so that invoices can be sent out
Sales must be able to inform customers when deliveries are due and be aware of any problems
Must liaise over sales promotions and adverts so that sales staff can expect/handle enquiries
Finance monitors departmental spending and the achievement of financial targets
Will liaise over salary increases and bonuses
Customer Service must pass on customer feedback that could affect future product developments or future sales
Liaise over new product developments and methods of production
HR handles job vacancies, promotion opportunities, training courses and CPD for all areas/staff
break even charts
graphs which show how costs and revenues of a business change with sales. They show the level of sales a business must made in order to break even
break even point
The level of sales at which total costs = total revenue
break-even level of output
The quantity that must be produced/sold for total revenue to equal total costs (also knows as break-even point)