Business Studies OCR Good Notes
- Created by: trinnycs1
- Created on: 10-06-17 11:33
Business Studies
Why do businesses exist
· to make a profit
· increase wealth
· provide jobs
· improve lifestyle of customers
· to supply goods and services to customers
· for growth of a business to satisfy the needs and wants of a business
Enterprise
· another word for business/ company
Risks of an enterprise
Rewards of an enterprise
Money runs out
big and small profit
Overspending
Self-respect and recognition
Failure
Wealth
Stressful
Growth in a business
Terminating staff
Being your own boss
Sole trader
· unlimited liability
· owner keeps all profits
· stress of running business on their own
· hard to get capital
· all problems fall on the owner
· cheap to set up
· financial information is private
· illness and death stops business
· may be required to work long hours
· complete control over decision making
Partnership
· unlimited liability
· minimum 2, maximum 20
· profits are shared amongst partners
· work can be specialised
· if there are losses they are split between them all
· disagreement over possible decisions
· funds are easier to raise
· imbalance in whole load
Private Limited company
· separate legal identity
· limited liability
· accounts can be accessed by public but cost
· no share price
· shares sold privately
· profits shared amongst owners
· more access to profits
Public limited company
· shares are sold on the stock market
· limited liability
· take over risk
· easy to raise funds
· accounts are public
· access to greater sources of finance
· biggest size of business
· public can become shareholders
· dividends are paid to shareholders
Franchising
· a franchise is the right given by one business to another business to sell their goods or service using its name and logo.
· The franchisor is the business that gives the right to sell its products or service in the return for a fee
· The franchisee is the business that manufactures and distributes or sells the franchisors product or service
· The franchise will get help from the franchisor by
ÞProvide training
ÞProviding specialised equipment
ÞProvide local/national advertisement
· The franchisor charges an initial fee and also takes a share of the franchisee’s profit
· The franchise agreement helps the franchisor control the quality and production of their product or service
· The support provided a franchise allows people…
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