WEILAI Online Academic assistant
WEILAI Online Academic assistant
Back to 课程

Business_A-level_Aqa

0% Complete
0/0 Steps
  1. 1-1-the-nature-and-purpose-of-business
    3 主题
  2. 1-2-forms-of-business
    5 主题
  3. 1-3-the-external-environment
    5 主题
  4. 2-1-management-and-leadership
    3 主题
  5. 2-2-management-decision-making
    4 主题
  6. 2-3-the-role-and-importance-of-stakeholders
    3 主题
  7. 3-1-marketing-objectives
    1 主题
  8. 3-2-understanding-markets-and-customers
    5 主题
  9. 3-3-making-marketing-decisions
    2 主题
  10. 3-4-the-marketing-mix
    7 主题
  11. 4-1-operational-objectives
    2 主题
  12. 4-2-operational-performance
    1 主题
  13. 4-3-efficiency-and-productivity
    3 主题
  14. 4-4-quality
    1 主题
  15. 4-5-inventory-and-supply-chain-management
    3 主题
  16. 5-1-financial-objectives
    2 主题
  17. 5-2-financial-performance
    6 主题
  18. 5-3-sources-of-finance
    3 主题
  19. 5-4-cash-flow-and-profit
    1 主题
  20. 6-1-human-resource-objectives
    1 主题
  21. 6-2-human-resource-performance
    1 主题
  22. 6-3-organisational-design
    3 主题
  23. 6-4-human-resource-planning
    4 主题
  24. 6-5-motivation
    4 主题
  25. 6-6-improving-employer-employee-relations
    2 主题
  26. 7-1-mission-objectives-and-strategy
    4 主题
  27. 7-2-assessing-the-internal-position-of-a-business
    10 主题
  28. 7-3-changes-in-the-external-environment
    7 主题
  29. 7-4-the-competitive-environment
    1 主题
  30. 7-5-investment-appraisal
    2 主题
  31. 8-1-strategic-direction
    1 主题
  32. 8-2-strategic-positioning
    2 主题
  33. 9-1-changes-in-scale
    4 主题
  34. 9-2-innovation
    2 主题
  35. 9-3-globalisation-and-internationalisation
    4 主题
  36. 9-4-digital-technology
    1 主题
  37. 10-1-managing-change
    3 主题
  38. 10-2-organisational-culture
    2 主题
  39. 10-3-implementing-strategy
    2 主题
  40. 10-4-strategic-failure
    2 主题
课 Progress
0% Complete

An introduction to the private sector

  • The private sector includes all businesses that are owned and run by individuals or groups — not the government

  • These businesses aim to make a profit and operate in competitive markets

  • Common types of private sector businesses include:

    • sole traders: one-person businesses (e.g. a local plumber or hairdresser)

    • private limited companies (Ltd): owned by shareholders, often family or friends, with shares not sold to the public

    • public limited companies (Plc): larger businesses that sell shares on the stock exchange (e.g. Tesco, Apple)

  • Non-profit organisations (e.g. charities) can also be part of the private sector if they are independent from government and funded by donations or revenue from services

  • The private sector contrasts with the public sector, which includes government-owned organisations such as the NHS or the BBC

The problem of unlimited liability

  • Unlimited liability means the owner of a business is personally responsible for all its debts — even if it means using their own money or possessions to pay them off

  • There is no legal distinction between the owner and the business

    • Sole traders and partners are fully responsible for all debts owed by the business

    • They are also legally responsible for unlawful acts committed by those connected to the business

  • As a result, unincorporated business owners may have to use their own personal assets to pay debts or legal fees

    • E.g. a sole proprietor may need to sell their home to pay creditors if their business fails

Sole traders

  • When an entrepreneur starts a business, they will often start operating as a sole trader

    • This is a business with a single owner (although they may still hire employees)

Examples of sole trader businesses

Example

Description

Ella’s Eco-Cleaning

  • 19-year-old Ella McSweeney runs a domestic cleaning service using biodegradable products

Ben’s Bike Repairs

  • Ben is a mobile cycle mechanic covering suburban south-east London

Taste of Kerala

  • Larissa is a street-food vendor at weekend markets and music festivals

  • Sole traders often run their business alone and so need to have a varied skill set, including:

    • money skills: set sensible prices, keep basic records and monitor cash coming in and going out so the business does not run out of money

    • great customer service: be friendly, reliable and helpful so people come back and tell their friends

    • simple marketing and selling: spread the word on social media or in the local area and feel confident asking for the sale

    • problem-solving and resilience: stay calm when things go wrong (such as late payments or lost inventory) and find quick fixes

Advantages and disadvantages of sole trader businesses

Advantages

Disadvantages

  • Easy and inexpensive to set up

  • The owner has complete control over the business

  • All profits belong to the owner

  • Simple tax arrangements

  • Decisions can be made very quickly so the business can react swiftly to market change

  • High levels of personal satisfaction

  • Unlimited liability, meaning the owner is personally responsible for any debts the business incurs

  • Limited access to finance and capital

  • Limited skill sets

  • Difficult to take time off from the business

  • Over time, sole traders may change the form of their business

    • By forming a partnership or becoming a private limited company with limited liability, they can access more funding or provide more security for the owners