1. Organisations 30/08/10

2. Small Businesses We can tell a small business by: We can tell a small business by: How many branches it has or if it has only one How many branches it has or if it has only one It employs less than 50 people It employs less than 50 people It doesn’t make a big profit It doesn’t make a big profit It doesn’t have a wide variety of products to sell or produce. It doesn’t have a wide variety of products to sell or produce. They tend to be local businesses and sell their goods in the local area They tend to be local businesses and sell their goods in the local area

3. Show examples of local small businesses Yell.com Yell.com Florist, hairdresser, corner shop Florist, hairdresser, corner shop Put their name Put their name Picture of what they do. Picture of what they do.

4. Medium sized businesses May have more than one branch – they may be seen in more than one place and may be national. May have more than one branch – they may be seen in more than one place and may be national. Employs up to and around 250 people Employs up to and around 250 people It makes fairly good profits It makes fairly good profits It has a variety of goods and services It has a variety of goods and services It is quite well-known across the country It is quite well-known across the country

5. Examples Next Next Bells Bells Barrs Barrs Kwik Fit Kwik Fit BHS BHS SPAR SPAR

6. Large Organisations Large organisations employ more than 250 people and can employ hundreds of thousands of people Large organisations employ more than 250 people and can employ hundreds of thousands of people Known world wide Known world wide Branches across the world Branches across the world They make very large profits They make very large profits They produce a wide variety of goods or services They produce a wide variety of goods or services Sometimes they are known as multi-nationals Sometimes they are known as multi-nationals

7. Examples of Large organisations Nike Nike Adidas Adidas RBS RBS BP BP McDonalds McDonalds Burger King Burger King KFC KFC HSBC HSBC Santander Santander

8. Types of Organisations The businesses we have in the UK range from very small organisations to very large organisations. The businesses we have in the UK range from very small organisations to very large organisations. Firstly we are going to look at small organisations Firstly we are going to look at small organisations

9. Sole Traders One person owns and controls these types of organisations. One person owns and controls these types of organisations. This one person makes all the decisions about the business. This one person makes all the decisions about the business. The owner will employ people to help with the work of the organisation. The owner will employ people to help with the work of the organisation. Examples – local hairdresser, corner shop, local butcher, plumber Examples – local hairdresser, corner shop, local butcher, plumber

10. Advantages The sole trader is their own boss – job satisfaction The sole trader is their own boss – job satisfaction The sole trader makes all the decisions so runs the business the way they want to The sole trader makes all the decisions so runs the business the way they want to Sole trader gets to keep all their profit Sole trader gets to keep all their profit Easy to set up there are no legal requirements Easy to set up there are no legal requirements Can be quite inexpensive to set up Can be quite inexpensive to set up Can develop their own ideas Can develop their own ideas

11. Disadvantages No one to cover for the owner if they are sick or want to go on holiday. No one to cover for the owner if they are sick or want to go on holiday. No one to help make the decisions and bounce ideas off No one to help make the decisions and bounce ideas off Difficult for sole traders to raise money from bank loans as they are seen as a risk Difficult for sole traders to raise money from bank loans as they are seen as a risk

12. If the business makes a loss the sole trader has to cover this loss. If the business makes a loss the sole trader has to cover this loss. If the business goes bankrupt then the sole trader may have their personal possessions sold off to cover the debt – this is called UNLIMITED LIABILITY If the business goes bankrupt then the sole trader may have their personal possessions sold off to cover the debt – this is called UNLIMITED LIABILITY

13. Partnerships (6/9/10) A sole trader may decide to become a larger business by bringing in a partner or some businesses may start off as a partnership. A sole trader may decide to become a larger business by bringing in a partner or some businesses may start off as a partnership. There is a minimum of 2 partners and a maximum of 20 with the exception of lawyers, dentists and architects. There is a minimum of 2 partners and a maximum of 20 with the exception of lawyers, dentists and architects.

14. Advantages More than one person to share the workload – helps with holidays, illness etc. More than one person to share the workload – helps with holidays, illness etc. More ideas – as the partners can bounce ideas off each other More ideas – as the partners can bounce ideas off each other Some of the partners may be specialists in certain areas eg finance or marketing so they improve the business Some of the partners may be specialists in certain areas eg finance or marketing so they improve the business More money in the business as each partner will have invested money More money in the business as each partner will have invested money

15. Advantages cont Partners will share the loss of the organisation – not just one person having to take all the loss. Partners will share the loss of the organisation – not just one person having to take all the loss.

16. Disadvantages Sharing in decision making might be difficult if partners have different ideas about how the company should progress. Sharing in decision making might be difficult if partners have different ideas about how the company should progress. Partnerships still have unlimited liability but they share the liability Partnerships still have unlimited liability but they share the liability Share the profits between them – if one partner has invested more than another they will get a bigger share of the profit. Share the profits between them – if one partner has invested more than another they will get a bigger share of the profit. Creating a partnership means creating a Deed of Partnership and so can be expensive as lawyers need to be brought in Creating a partnership means creating a Deed of Partnership and so can be expensive as lawyers need to be brought in

17. Partnerships cont They have to draw up a Deed of Partnership detailing how much each partner puts in, their share of the profit etc. They have to draw up a Deed of Partnership detailing how much each partner puts in, their share of the profit etc. If one partner invests more money than another they may get more profit. If one partner invests more money than another they may get more profit. If one partner wishes to leave the business has to be closed down and started again. If one partner wishes to leave the business has to be closed down and started again. There may be a sleeping partner who invests money in the business but are not involved in the running of it. There may be a sleeping partner who invests money in the business but are not involved in the running of it.

18. Private Limited Companies Medium-sized organisations – Ltd Co in its name. These organisations have limited liability and the owners only lose how much money they invested in the business if it goes bust. The owners are called shareholders at least 2 shareholders. The shares are not sold on the stock market, the shares are usually owned by family members or the people who originally set up the company. If a shareholder wishes to sell their shares then the others have to agree to whom the shares are being sold to. Medium-sized organisations – Ltd Co in its name. These organisations have limited liability and the owners only lose how much money they invested in the business if it goes bust. The owners are called shareholders at least 2 shareholders. The shares are not sold on the stock market, the shares are usually owned by family members or the people who originally set up the company. If a shareholder wishes to sell their shares then the others have to agree to whom the shares are being sold to.

19. Advantages No unlimited liability No unlimited liability New shares in the company can be issued and so raise more money for the company. New shares in the company can be issued and so raise more money for the company. Easier to get bank loans Easier to get bank loans Can bring in new shareholders if the company wants to grow Can bring in new shareholders if the company wants to grow Shareholders may specialise in certain areas of the business eg finance and so this will help the company to improve Shareholders may specialise in certain areas of the business eg finance and so this will help the company to improve

20. Disadvantages Can be expensive to set up – a Ltd Co has to register their company at Companies House – also legal procedures to go through Can be expensive to set up – a Ltd Co has to register their company at Companies House – also legal procedures to go through Not as easy to set up a Ltd Co Not as easy to set up a Ltd Co More difficult to make decisions as all the shareholders will have a vote on decisions More difficult to make decisions as all the shareholders will have a vote on decisions

21. Public Limited Companies Plcs These are very large well-known organisations – have Plc after their name. Their shares are sold on the stock market, this gives them their title - they can be sold to the public. They can have thousands of shareholders. Each year they hold an AGM (Annual General Meeting), shareholders are invited to attend and put across their points of view about the organisation. These are very large well-known organisations – have Plc after their name. Their shares are sold on the stock market, this gives them their title - they can be sold to the public. They can have thousands of shareholders. Each year they hold an AGM (Annual General Meeting), shareholders are invited to attend and put across their points of view about the organisation.

22. Plcs cont Shareholders vote on the Board of Directors at the AGM, then a Managing Director is voted on and takes responsibility for the running of the organisation. Shareholders vote on the Board of Directors at the AGM, then a Managing Director is voted on and takes responsibility for the running of the organisation.

23. Advantages of Plcs Shareholders have limited liability Shareholders have limited liability Easy to raise finance as banks trust Plcs to be able to pay them back Easy to raise finance as banks trust Plcs to be able to pay them back Unlikely to be a start up business so they are more secure Unlikely to be a start up business so they are more secure

24. Disadvantages Expensive to set up Expensive to set up Accounts have to be published, therefore everyone can see the organisation’s financial situation Accounts have to be published, therefore everyone can see the organisation’s financial situation Have to register with Companies House and go through a legal process Have to register with Companies House and go through a legal process Organisation has to prove itself before its shares can be sold on the stock market Organisation has to prove itself before its shares can be sold on the stock market

25. Public Sector Owned by the government on behalf of the public Owned by the government on behalf of the public Controlled by government ministers and trusts Controlled by government ministers and trusts Financed by taxation, government borrowing Financed by taxation, government borrowing Examples – National Health Service, Armed Forces, Education Examples – National Health Service, Armed Forces, Education

26. Private Sector Owned by private individuals or groups of individuals Owned by private individuals or groups of individuals Controlled by owners/shareholders Controlled by owners/shareholders Financed by bank loans, owners investments, new share issues Financed by bank loans, owners investments, new share issues Examples – Next, Marks and Spencers, BP, local corner shops Examples – Next, Marks and Spencers, BP, local corner shops

27. Voluntary Sector Not really owned by anyone, set up by individuals who want to help others Not really owned by anyone, set up by individuals who want to help others Controlled by Trustees Controlled by Trustees Financed by donations from the public Financed by donations from the public Examples – Oxfam, Red Cross, British Heart Foundation etc Examples – Oxfam, Red Cross, British Heart Foundation etc