• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Why Businesses Exist

Extracts from this document...

Introduction

Why Businesses Exist A business gets started when somebody decide that they can earn a profit by making a good or providing a service and selling it to people who are willing to pay for it. All Businesses have the same Main Objective An objective is anything that the business wants to achieve. The most important objective is to make a profit in order to survive. If a business does not make a profit it will go bankrupt and have to closedown. The Public Sector Owned by the Government: Army, Police, Schools and Hospitals. These are benefits for everyone. The Private Sector Owned by Private Individuals. Of Benefit to the people who own them. Key Terms Entrepreneurship: means being prepared to take risks and having the flair and skills needed to set up and run a business or other organization. Sole Owner: is an individual who runs a business and is personally responsible for any losses incurred. A Limited Company: is an organisation, which gives its owners or shareholders protection so that they can lose only the money that they have already put in. ...read more.

Middle

Reward Revenue - Cost = Profit Profit is the difference between a firm's revenues from its trading activities and its total costs. It is a reward for the risk and a return on capital invested. There are 3 factors of production: * Land * Capital * Labour Entrepreneurs use these 3 factors to make a profit. Sole Traders Company Legal No legal formalities. A legal structure with a separate identity from those who run it. Profit Requires all profits (Go straight to owner). Profits go to shareholders when costs have been met. Liability Unlimited Liability Personally responsible for all losses Limited Liability Only liable for money that they have put into the company. Capital Only raise capital from own resources such as loans. Selling shares can raise capital. The shareholders are known as equity Flexibility Free to change direction if necessary. Decisions taken by board of directors and shareholders. The Basic Economic Problem Resources are finite, desires are infinite, and thus we must make choices. The real value of what you buy is the sacrifice of what you don't buy. ...read more.

Conclusion

It can only occur when people are in a position to trade. Exchange: refers to the process of getting the things you need by offering someone your product and taking the orders in exchange. Money makes the process of exchange much easier. The Division Of Labour: refers to the practice of organising workers so that individuals specialise in one part of a product process. It generally leads to an increase in output per person. The Contradiction between Specialisation and Motivation Specialisation has enabled society to develop faster. However, if a worker specialises in a certain area for too long then the motivation of the worker will decrease. If a worker has a wider work range then the motivation to finish jobs will rise. If the worker has a greater responsibility then the motivation will increase because there are less repetitive tasks. Key Terms Primary Sector: includes industries involved in mining, fishing and farming. Secondary Sector: includes all manufacturing industries. Tertiary Sector: includes all service industries. Quaternary Sector: includes all finance and insurance. Trade Unions Developed to protect the rights of workers. By working collectively, members of a union have more power to negotiate than they do as individuals. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Structures, Objectives & External Influences section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Structures, Objectives & External Influences essays

  1. The Business Environment Coursework. Describe the type of business, purpose and ownership of ...

    The there is a high population there is a big demand for goods, services and jobs. In China there is a large population but due to rules set out with how many children can be born, in future years

  2. For my portfolio, I was asked to do an assignment on two businesses. I ...

    Tesco used to recycling 55,000 tonnes a year of packaging waste; 350 recycling facilities at stores; cutting packaging waste by 20%; cutting energy use and Carbon dioxide by 20%; removing all CFCs from refrigeration systems. Tesco also plays a part in being environmentally friendly by changing �1 for bags for

  1. Job roles, recruitment, motivation and legislation.

    Job description The purpose of a job description is to allow an employer in relation for all aspects of the job that the business is offering. Details within a job description would be: > job title > who is accountable for the employee; > the location of the job >

  2. Investigating Businesses

    The finance and control in this business will be split 50%-50% between the two owners of the partnership. The main potential risk is that, due to the unlimited liability, the personal belongings of both partners are at risk, should the company go bankrupt or liquidate.

  1. The Legal Eagles

    However, the business is owned by one person and it is they who receive the profits. ADVANTAGES DISADVANTAGES * Business affairs can be kept private except for completing tax returns. * Unlimited Liability - if the business fails and makes a loss, you are responsible for all debts incurred.

  2. Political, legal and social factors impact on businesses The two businesses I will compare ...

    regulations 2003, the employment equality ( sexual orientation ) regulations 2003 and finally the employment equality ( age ) regulations 2006. All of these Tesco's have to comply with to run a successful and happy business. Without these Acts and regulations Tesco might not be as big as they are now.

  1. Investigating Business. Tesco PLC. I will be describing the aims and objectives of ...

    Tesco?s has highlighted this issue and has responded to this by providing these services like drive-thru, home delivery etc. Being the leader in the market is one of the most important factors to describe the success Tesco?s is at today.

  2. Applied Business. Investigating a business Preston Manor High School

    Preston Manor has to have aims and objectives otherwise they will not meet their commitments to the standards set by the Government, and by Ofsted. The school is required to meet strict targets. To ensure these targets are met; they have to constantly review how they are performing against aims and objectives.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work