Type of Organization
Types of Business Organisation
GCSE Business Studies tutor2u™ Revision Presentations 2004
Introduction
A business is always owned by someone. This can just be one person, or thousands. So a business can have a number of different types of ownership depending on the aims and objectives of the owners. Most businesses aim to make profit for their owners. Profits may not be the major objective, but in order to survive a business will need make a profit in the long term. Some organisations however will be ‘not-for-profit’, such as charities or government-run corporations.
tutor2u™
GCSE Business Studies
Key Learning Points
What are the different types of business organisation? What are the advantages and disadvantages of each type? What are the implications of the choice of business organisation on key issues such as:
Ability to raise finance Control of the business Business aims and objectives
tutor2u™
GCSE Business Studies
Main types of business organisation
Sole trader Partnership Private Limited Company (“Ltd”) Public Limited Company (“plc”) Co-operatives Franchises Public sector
tutor2u™
GCSE Business Studies
Measuring size of a business
No one measure of the size of the business Options
Number of employees Number of outlets (e.g. shops) Total revenues (or “sales” per year) Profit Capital employed – amount invested in business Market value
Often need to consider several measures together Business size is “relative” – e.g. how large is a business compared with its main competitors?
tutor2u™
GCSE Business Studies
Sole Traders
A sole trader is a business that is owned by one person It may have one or more employees The most common form of ownership in the UK Often succeed – why?
Can offer specialist services to customers Can be sensitive to the needs of customers – since they are closer to the customer and react more quickly Can cater for the needs of local people – a small business in a local area can build
GCSE Business Studies tutor2u™ Revision Presentations 2004
Introduction
A business is always owned by someone. This can just be one person, or thousands. So a business can have a number of different types of ownership depending on the aims and objectives of the owners. Most businesses aim to make profit for their owners. Profits may not be the major objective, but in order to survive a business will need make a profit in the long term. Some organisations however will be ‘not-for-profit’, such as charities or government-run corporations.
tutor2u™
GCSE Business Studies
Key Learning Points
What are the different types of business organisation? What are the advantages and disadvantages of each type? What are the implications of the choice of business organisation on key issues such as:
Ability to raise finance Control of the business Business aims and objectives
tutor2u™
GCSE Business Studies
Main types of business organisation
Sole trader Partnership Private Limited Company (“Ltd”) Public Limited Company (“plc”) Co-operatives Franchises Public sector
tutor2u™
GCSE Business Studies
Measuring size of a business
No one measure of the size of the business Options
Number of employees Number of outlets (e.g. shops) Total revenues (or “sales” per year) Profit Capital employed – amount invested in business Market value
Often need to consider several measures together Business size is “relative” – e.g. how large is a business compared with its main competitors?
tutor2u™
GCSE Business Studies
Sole Traders
A sole trader is a business that is owned by one person It may have one or more employees The most common form of ownership in the UK Often succeed – why?
Can offer specialist services to customers Can be sensitive to the needs of customers – since they are closer to the customer and react more quickly Can cater for the needs of local people – a small business in a local area can build