types of business org.pptx

Different types of business organisation

1. https://www.youtube.com/watch?v=gpO91cxnndw https://www.youtube.com/watch?v=nsV461YIr6c https://youtu.be/OmwjKTYtLiA

2. WHAT IS A BUSINESS PLAN? A Business Plan is a written document that defines the goals of your business and describes how you will attain those goals. A Business Plan is worth your considerable investment of time, effort, and energy. A Business Plan sets objectives, defines budgets, engages partners, and anticipates problems before they occur.

3. WHY DO YO U NEED A EED A BUSINESS PLAN? If you are starting a new project or venture If you are looking for a business partner To manage your business better To measure actual performance compared to what was planned

4. TYPES OF BUSINESS ORGANIZATION

5. Sole Trader/Sole Proprietorship A business organization  owned and controlled by one person . Sole traders can employ other workers, but only he/she invests and owns the business.

6. Advantages Easy to set up Full control Sole trader receives all profit

7. Disadvantages Unlimited liability Full responsibility Lack of continuity

8. Partnerships A partnership is a legal  agreement between two or more  (usually, up to twenty) people to own, finance and run a business jointly  and to share all profits.

9. Advantages Easy to set up Partners can provide new skills and ideas More capital investments

10. Disadvantages Conflicts Unlimited liability No continuity

11. Joint-stock companies these companies  can sell shares , unlike partnerships and sole traders, to raise capital. Other people can buy these shares (stocks) and become a  shareholder  (owner) of the company. Therefore they are  jointly owned by the people who have bough it’s stocks. These shareholders then receive  dividends  (part of the profit; a return on investment).

12. These are two types of companies: Private Limited Companies : One or more owners who can sell its’ shares to only the people known by the existing shareholders (family and friends). Example:  Ikea . Public Limited Companies : Two or more owners who can sell its’ shares to any individual/organization in the general public through stock exchanges.

13. Advantages Limited Liability : this is because, the company and the shareholders have separate legal identities. Raise huge amounts of capital :

14. Disadvantages Private Limited Companies cannot sell shares to the public . Public Ltd. Companies may have managerial problems

15. Franchises The  owner of a business  (the franchisor)  grants a licence to another person or business  (the franchisee)  to use their business idea  – often in a specific geographical area. Fast food companies such as McDonald’s and Subway operate around the globe through lots of franchises in different countries.

16. Advantages TO FRANCHISOR Rapid, low cost method of business expansion Gets and income from franchisee in the form of franchise fees and royalties Franchisee will better understand the local tastes and so can advertise and sell appropriately

17. TO FRANCHISEE An established brand and trademark, so chance of business failing is low Franchisor will give technical and managerial support Franchisor will supply the raw materials/products

18. Disadvantages TO FRANCHISOR Profits from the franchise needs to be shared with the franchisee Loss of control over running of business If one franchise fails, it can affect the reputation of the entire brand Franchisee may not be as skilled

19. TO FRANCHISEE Cost of setting up business No full control over business- need to strictly follow franchisor’s standards and rules Profits have to be shared with franchisor Need to pay franchisor franchise fees and royalties

20. Joint Ventures Joint venture is an  agreement between two or more businesses to work together on a project . The foreign business will work with a domestic business in the same industry. Eg : Google Earth is a joint venture/project between Google and NASA.

21. Advantages Reduces risks and cuts costs Each business brings different expertise to the joint venture The market potential for all the businesses in the joint venture is increased Market and product knowledge can be shared to the benefit of the businesses

22. Disadvantages Any mistakes made will reflect on all parties in the joint venture, which may damage their reputations The decision-making process may be ineffective due to different business culture or different styles of leadership