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forms of business - Coggle Diagram
forms of business
sole traders
A sole trader or sole proprietor is the simplest form of business organization. A sole trader can be involved in a wide range of the activity. In the primary sector, they may be farmers or fishermen. In the secondary sector, they may be small building or manufacturing businesses. Setting up as a sole trader is easy, as there are no legal requirements. However, sole traders do have some legal responsibilities.
- once their turnover reaches a certain level, they must register for value added tax (VAT).
- They may need a license to trade if they are involved in activities,, such as selling in marketplace or street supplying a taxi service or public transport.
- they may have to pay taxes and other government changes.
- they may need planning permission (for example a person may have to apply to the local authority for planning permsision to convert a shop into a restaurant).
- they must comply with legislation aimed at business practice.
example
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Bakso seller 
disadvantages
- Owner capacity to raise capital is limited.
- All the responsibility for making day-to-day business decisions is yours.
- Owner has unlimited liability for debts as there's no legal distinction between private and business assets.
advantages
- owner can keep all the profits
- have a lot of maximum privacy
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limited companies
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disadvantages
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- Your company must be in compliance with strict administrative requirements.
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advantages
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- Claim on limited company expenses
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franchising
starting up your own business carries a lot of risk and most of the start ups ceased to exist after 5 years of trading. One way of possibly reducing this risk is to buy a franchise.
- the franchisor provides a recognised brand name which customers should recognise and trust.
- the franchisor will provide a start up package.
- it gives franchisee a license to make a product that is already tried and tested in the marketplace.
- it is likely to provide marketing support
- there should be ongoing training
disadvantages
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- Lack of financial privacy
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example
mixue
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Indomaret
advantages
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- increased brand awareness
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social enterprises
These organizations trade with aim of improving human and environmental well being, rather than making profit for external owners.
- generate most of theur income through trade or donations
- reinvest most of their profits
- have clear social and/or environment mission
- are not connected to the government
- are majority controlled in the intrests ofther social mission
- are accountable and transparent.
Disadvantages
- Technical skills development
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- The need to constantly monitor your market.
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Online businesses
Online business are like Amazon, Alibaba, Confused, eBay and Facebook. Online businesses are known as using the internet to trade and are likely to have these following features in common.
- there are no formal procedures to follow or legal requirements when starting an online business.
- online business have low set-up costs.
- online businesses collect payments for goods and services electronically.
- customers access the business via the internet
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advantages
- Faster response to buyer/market demands.
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partnerships
A partnership in the UK is defined in the parternship act 1890 as the relation which subsists between persons carrying on business which common view to profit. Put simply partnership has more than one owner. the joint owners will share responsibility for running the business and also share the profits. It is often found in professions such as accountant, doctors etc..
example
Diadora
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Pt trans jakarta
disadvantages
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- the liability of the partners for the debts of the business is unlimited.
advantages
- You'll have greater borrowing capacity.
- more capital is available for the business.
- your business is easy to establish and start-up costs are low.
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lifestyle business
a person running a lifestyle business aims to make enough money and provide the flexibility needed to pay for a particular lifestyle. Some features are like...
- The business will often be small and is likely to have just one owner
- the personal interests of the entreprenuer are likely to influence the nature of the business, so that time spent working is enjoyable.
- an owner may undertake a variety different ventures
- running the business is likely to be home based
- they are likely to have simnilar advantages and disadvantages to those of sole traders
- lifestyle businesses are sometimes considered an alternative to retirement
example
Pt prodia utama
pt PP Properti TBK
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Disadvantages
- Difficulty recruiting top talent.
- Lower chances for large gains.
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Advantages
- being able to pursue personal goals with profits from the business
- having a positive cash flow from early in the business' growth
- being able to control most aspects of the business