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Understanding Business - Coggle Diagram

- - - - The extraction of raw materials, oil reserves etc.
    - - The manufacturing of a product using raw materials, car manufacturing etc.
    - - The service sector that consists of services rather than goods, banks and hairdressers etc.
    - - These are businesses that provide information services, ICT etc.
  - - - Public sector organisations are owned and controlled by the government on behalf of citizens. These are financed by taxation.
    - - Private sector organisations are owned by private individuals and investors. Run by board of directors and financed through the selling of products and services.
    - - Third sector organisations are set up to raise money for good causes or provide services for their members eg, Comic Relief.
- - - - Advantages
        
        It is easy and cheap to set up as there are no legal formalities
        
        The owner has complete control and can make all the decisions
        
        There is no division of the profits
        
        Profits are kept by the owner
      - Disadvantages
        
        It can be difficult to raise finance - the soletrader may have to rely on savings and or finance and support from relatives.
        
        The owner of the business is solely responsible for all the financial commitments
        
        There is nobody to share responsibilities with
    - - If the business were to fail then, the owner would be held responsible for it's debt, even to the extent of them having to sell everything they own. This means they could face bancruptcy if the business fails.