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How Business Develop.

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Unit 2-How Business Develop Ownership There are several different types of business ownership; the owners have different responsibilities and involvement in a business. One aspect of this is who bears the business risk and whether the owners have limited liability. Different types of ownership are: * Sole trader * Partnership * Company * Public ownership * Co-operative * Franchise. Introduction Normally when a business starts, the business is small. This is because the person who starts it hasn't got a lot of finance. A person who starts alone in the business world is called a sole trader. If there are two or more persons involved, e.g. family or friends, then it is called a partnership. These two types of businesses are unlimited liability, because it's not the business that is liable but the owner. This means that, if the business goes bankrupt, the owner's personal assets can be taken away. Sole Trader: Tourist shop Franchise: Safeway Plc Safeway Plc Safeway is one of the top four food retailers in the United Kingdom. This very competitive market includes Tesco, Sainsbury's and Walmart/Asda. Food retailing has undergone many changes in the recent past with the advent of the supermarkets in the U.K. during the late 1950's, and the mobility of the population (increasing car ownership). This sector has prospered over time as shopping habits have changed. The arrival of a new Chief Operating Officer Carlos Criado-Perez some two years ago resulted in a change of strategy, and has transformed Safeway from a "follower" to a dynamic leader in grocery retailing. This statement will be analysed elsewhere in this report. The Safeway brand is an international one born in the USA with outlets in other parts of the Americas and Europe. This report deals especially with Safeway Plc here in the U.K. where the company trades as an autonomous unit. (Quoted on the London Stock Exchange, in the FTSE 100). ...read more.


To become a Public limited Company you need:- * Memorandum of Association * Articles of Association * Statutory Declaration Disadvantages * May face take-over bids almost overnight. * The director's interests may differ from those of the shareholders because ownership and control are separate. * The PLC may be dominated by a few shareholders, e.g. by institutional investors such as pension funds and insurance companies. * Cost of incorporation is expensive. * Shares are subject to fluctuation. * Legal requirements need to be properly addressed and so, lawyers need to be acquired to audit reports annually and ensure they are accurate. * PLC annual reports are available to the general public. Influences on businesses There are many influences on businesses, and in order to be successful a business must be able to respond to these appropriately. Sometimes this involves weighing up different interests, for instance the needs of consumers against the cost and location of premises. Location Businesses locate where they believe they will be successful. The reasons for this can include: * The number of people available to work in particular area and their skills * The cost of premises * Financial help from the government * Transport links for supplies and distribution * The need to be where suppliers and raw materials are based * The need to compete with other businesses in the same activity * The need to be where customers are * History and tradition. Businesses need to find a good location for their business. This is because if they fail to find a good location, they won't attract many customers. The fixed costs have to be paid each month. This includes rent/mortgage, bills and wages. This means that the business is paying money for something that is of no use to them. Relocation and transferring goods to it are costly and not easy. Rent is also expensive and businesses need to make sure that they get it right the first time. ...read more.


By 2000 it contributed less than 2% of the countries GDP (Gross Domestic Product). The Secondary Sector Output from the secondary sector has grown slowly in recent years but its relative share of the GDP has fallen from 40.4% in 1964 to 26.8% by 1999. In 1964 the secondary sector provided around 47% of all employment, 11 million jobs. By 1999 this had fallen below 22%, just under 5 million. Not all areas have been in decline within the secondary sector. Industries supplying chemicals and electrical equipment have seen output grow while those in traditional manufacturing have experienced a rapid decline falling from 38% employment in 1964, (9 million jobs) to 18% employed in 1999 ( 4 million jobs). The Tertiary Sector In 1964 the tertiary sector accounted for almost 54% of the UK output. By 1999 this had grown to over 69%. This trend is identified through employment figures. In 1964 tertiary employment stood at 11 million jobs but by 1999 this had grow to 17 million. The major expansion to this sector can be attributed to the growth in the 'communications' and 'finance, insurance and banking' sectors. The finance industry now accounts for almost 20% of the UK's output. Beware! There is often talk about a quaternary sector. This is sometimes used to group together the jobs working in the communications and information processing area. This sector has grown with the advances in technology. Table 1 Percentage share of GDP in the UK Sector 1964 1979 1999 Primary 5.8 6.7 3.8 Secondary 40.4 36.7 26.8 Tertiary 53.8 56.6 69.4 Table 2 Employment in selected industries (000's) 1990 1998 All industries 22 920 23 237 Selected industries Mining and quarrying 163 80 Energy and water 404 222 Construction 1 143 1 003 Manufacture of office equipment and computers 65 48 All manufacturing 4 708 4 076 Retailing 2 131 2 450 Hotels and restaurants 1 262 1 316 Financial 1 059 1 064 Health and social work 2 317 2 582 Service industries 16 350 17 664 Adapted from Annual abstract of Statistics 1999 ...read more.

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