1 st lesson unit 2 n.
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1 ST Lesson – UNIT 2. This is soooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooo exciting! ’’That’s what I go to school for’’ BUSTED, 2005. You will investigate the setting up of a small business, which provides a service to the local area only .

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1 st lesson unit 2

1ST Lesson – UNIT 2

This is soooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooo exciting!

’’That’s what I go to school for’’ BUSTED, 2005

slide2
You will investigate the setting up of a small business, which provides a service to the local area only.

Examples of services include providing desk top publishing, printing logos on clothes, running a school shop, offering a cleaning or valeting service, supplying food or other items for special occasions.

create your own glossary of terms
Create your own glossary of terms
  • Service
  • Liquidity/ solvency
  • Assets
  • Liabilities
  • Revenues
  • Expenses
  • Current liabilities
  • Long term liabilities
  • Current assets
  • Fixed assets
  • Budgeting
  • Fixed costs
  • Variable costs
first thing
First Thing
  • What service are you going to choose?
  • Where will that service be located (has to be somewhere on the island - local)?
  • Very briefly who will your target market be?
  • Briefly why have you chosen this (you will do lots of analysis, so give your opinion from a local person’s point of view)
business ownership
Business Ownership

Business Ownership can be categorised by the following:

  • Businesses with unlimited liability
  • Businesses with limited liability
  • Other forms of business organisation
businesses with unlimited liability
Businesses with Unlimited Liability
  • Unlimited liability means that the finances of the business are treated as inseparable from the finances of the business owner
  • If the business owes £1,000,000, the owner owes £1,000,000 and can be forced by court to pay for it themselves. This means selling their own private houses and cars etc.
  • There are two types: Sole Trader, Partnership
sole trader
Sole Trader
  • An individual who owns and operates their own business
  • There may be employees but there is only one owner who benefits financially from the business
  • Despite the financial dangers involved, sole traders are the most common form of ownership adopted by UK businesses
  • Builders, plumbers and many independent shopkeepers will be sole traders
  • Disadvantages include little finance available, long hours of work (including difficulty of taking a holiday), difficulties of running a business with ill health
partnerships
Partnerships
  • Similar to sole trader but with more owners. Between 2 and about 52
  • There are advantages and disadvantages of a partnership owned business. Draw up a table of list what you think they are
businesses with limited liability
Businesses with limited liability
  • Limited liability means that the legal duty to pay debts run up by the business stay with the business.
  • The debt is not the owners personally
  • If the company owes £1,000,000 that the company cannot pay. The courts can order the business to sell all of its assets and if that is not enough the business will then be closed.
  • The owner will have no personal liability for those debts
businesses with limited liability1
Businesses with limited liability
  • Limited liability companies have to go through a legal process to become a company – process of ‘incorporation’
  • 2 types of limited company: Private limited and Public limited
private limited companies
Private Limited Companies
  • Still relatively small companies
  • Owned by shareholders but the shares are not listed on the stock market
  • Shares are sold with the permission of the directors
  • ‘Ltd’ appears after the company’s name
public limited companies
Public Limited Companies
  • When a private limited company expands past a share capital of £50,000 it can convert to a ‘Plc’
  • This means the company will be ‘floated’ on the stock market, which allows any member of the general public to buy shares
  • This gives the company access to much more money to then further invest in the company
other forms of business organisation
Other forms of Business Organisation
  • Co-operatives – These can be owned by the staff of the business e.g. John Lewis/ Waitrose
  • Not-for-profit Organisation – These include charities
homework unit 2
Homework Unit 2
  • Briefly describe what your company does?
  • What type of ownership is it?
  • What are the advantages and disadvantages of your choice?
  • Why did you choose this form and not others?
  • Make sure you have discussed: sources of finance, management, unlimited liability
4 5 6 7
4, 5, 6, 7
  • What are aims?
  • Why are aims important?
  • What is your business’ aim?
  • What is a mission statement?
  • Why do you have a mission statement?
  • What is your mission statement?
  • What are objectives?
  • Why do you have objectives?
  • Why have you chosen these objectives?
  • Who are stakeholders?