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business ownership & economies of scale

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Introduction

I am going to do some research into the types of ownership and the advantages and disadvantages to each. Sole trader The advantages of being a sole trader are: * It's easy to set up * Sole traders can make decisions quickly * All the profit can be kept The disadvantages to being a sole trader are: * Sole traders have a unlimited liability which means they can lose their personal possessions to pay off any debts the business might have run up * Sole traders do not have the advantages of economies of scale that a large business has * Small businesses are seen as more of a risk by financial institutions, so it can sometimes be difficult to raise money to help start up a business or exp[and later on Partnership The advantages ...read more.

Middle

The disadvantages of being a private limited company are: * The accounts of the company cannot be kept private * It is more difficult and more expansive to set up a limited company * The limited company cannot sell there shares on the stock market Public limited company The advantages of a public limited company are: * Share holders have limited liability * Its easy to raise capital by issuing more shares * Its much easy to raise capital as bank are more will to lend money to large more established companies as there is less risk The disadvantages to a public limited company are: * Setting up a public limited company can be expansive. There is a lot administrative work involved and act least �50,000 has to be raised befor it can be set up * Public limited companies have to issue a lot more information about itself which is very expansive to produce. ...read more.

Conclusion

every day which can lead to low job satisfaction, poor quality products, a problem with one group of workers may halt production in the hole business and workers can also become over-specialized which could make it difficult finding enough job if their skills are no longer needed, occupational immobility may result. Economies of scale An economy of scale is the reduction in average costs that comes from producing on a large scale. Purchasing economies is when large firms buys in bulk so gets it cheaper then smaller companies. Marketing economies is when a larger companies pay less per a unit on advertising its products because it want to advertise in a lot of the advertising company's products which means they will end up paying less than a smaller company would. ?? ?? ?? ?? Chloe Morgan ...read more.

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