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Business Forms 1 - Coggle Diagram
Business Forms 1
Franchising
Franchising is when a Franchisor (the owner of a company or business) allows another business (the franchisee) to promote their business.
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benefits to the franchisor:
- fast method of growth
- franchisees are more motivated than employees so success is likely
Drawbacks to the franchisor:
- poor franchisees may ruin brand reputation
- cost of supporting franchisees may be high
- profit may be shared with franchisees
benefits to the franisee:
- low risk of failure, as there is already an established idea
- gets support from the franchisor
- set up costs are predictable
- can be benefitted from national marketing campaigns
drawbacks for the franchisee:
- franchisees profit is shared with the franchisor
- low flexibility
- lack of independence
Lifestyle Business
a lifestyle business is a type of business with the aim of collecting enough profit to satisfy the business owner.
features:
- the business will often be small and have one owner
- personal interests are likely to be an influence of the business (like a musician or an artist)
- may come under many different ventures. a musician could do concerts, busking, teaching people to play, etc.
- may be home based
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Social enterprises
these are organisations, who mainly focus and aim on developing and improving the human and environmental well being instead of making profit for external owners.
sometimes called: not-for-profit organisations
features:
- clear social or environmental mission
*most incomes are generated through donations or trade
*re-invest most of their profit
*they are accountable and transparent
*not connected to the government
charity: an organisation with specific purposes defined in law to be charitable – and is exclusively for public benefit.
mutual organisations: they are owned by its customers, policy holders, employees or members
co-operatives: They are owned and controlled
by their members. Members can purchase shares that entitle
them to a vote at annual general meetings (AGMs).
Online business
Features:
customers access the business via the internet (e.g. websites or apps)
payments are made electronically (debit cards/ PayPal etc)
*no formal procedures or legal agreements are needed, only the websites have to be secure
benefits and drawbacks:
+reduces costs
+wider range
+reduced staffing requirements
+saturated market place
-support systems (if there is an issue, it might take several days for it to be resolved
-lack of interaction
-internet connectivity