Types of Business Different businesses attempt to do different things, these businesses fall into 3 main types:  Private Public Voluntary/Third sector (Known as the Sectors of Economy)

Private Sector The following businesses are in the private sector: Ownership Owned by one or more private owners who have invested their own money (CAPITAL) in them Purpose Started in order to provide goods or services Survival In order to survive, a private business must earn more than it spends (make a profit) Research Task The following businesses are in the private sector:

Basic Definition Sole Trader Business owned by one person Can employ other people but run by one person Task 1

Partnership Business owned by 2–20 people Requires a Deed of Partnership (Partnership Agreement) What is this? Rules of the business: how it is run, share of profits, partner responsibilities Homework Task

Private Limited Company (Ltd) Owned by shareholders Unable to buy shares unless you are invited to invest in the company Have limited liability – only lose the money you invested if the company fails Handout on advantages and disadvantages Task 3

Franchise Franchise – the permission given by one business to another to sell goods or services using its name One firm (franchisee) pays for the right to run under the name of another (franchisor) Task 2

Public Sector Ownership Funded by government (central and local) and tends to supply public services rather than produce goods. Funded through taxation Purpose The public sector provides a large range of services, for example: Central Government – national health, police, defence. Local Government – education, libraries, roads

Public Corporations – owned and run by state on behalf of people Public Corporations – owned and run by state on behalf of people. Nationalised industries. Many have been privatised! Central Government Organisations – National services such as Treasury, Defence, and Health Local Authorities – provide services like refuse collection, financed by council tax. Task 4 and 5

Voluntary/Third Sector Ownership These are not owned by any individual people. However, someone will be responsible for ensuring that it sets targets and budgets and does what it was set up to do. Purpose In most instances they try to help particular types of people eg guide dogs for the blind, Oxfam, etc. Survival In order to survive they normally must at least break even (ie spend no more than they take in through fundraising, grants, donations etc.)

Voluntary Organisations – Run and staffed by volunteers. Charities – Government regulates activities and keeps a register of charities. They are exempt from some taxes. Voluntary Organisations – Run and staffed by volunteers. Task 6

Social Enterprise (These can exist in all sectors) Businesses which exist to address social or environmental need, rather than maximising profit for shareholders or owners Co-operatives Credit unions Housing associations Charities Community businesses Task 7