The main advantage is that they can provide a much greater range of skills than a sole trader, as each partner specializes in there own part of work. For example a firm of solicitors one partner might specialize in wills and trusts, another in conveyance and a third in criminal law.
In partnerships you can get up to twenty people which means more profit for the business than when you are a sole trader. It would be easier to raise capital by each partner contributing a share. There are many setbacks despite some partnerships being successful for years; there is a more chance of the partners having arguments than in any other type of business organization. Lots of lifetime friendships have been ended because they did not draw up a deed of partnership. This document says what disagreements you could happen if you set up a partnership. How much capital should each partner provide? How should profits be shared or equally or in proportion to the capital provided? Who should be the boss of the business? Should it be one partner, one vote or the partner who put in the most capital? What arrangements should be made for the partnership to be dissolved or a withdrawal? How should the value of the business in terms of its reputation and its client’s loyalty, e.g. the goodwill, be decided if one of the partners withdraws, retires or dies? If you are going to set up a partnership, all partners are responsible for their partner’s debts. This includes sleeping partners, who invest money or lend their name to the partnership, but take no part in its management. If you do set up a partnership make sure that a solicitor or an accountant draws up a deed of partnership before, or soon after, the business starts.
A co-operative business is different from any other type of business. It is owned and run by everyone who works there. Everyone believes in working together. It ensures that every one in the business has a say in the business.
Membership is open to all workers
Each member has one vote
Any profit is distributed to members in a fair way.
Members are in control, not outside shareholders, through some worker co-operatives employ a general manger.
Supporters of the co-operative society aim to create a happier and better society. They say
The co-operative aim would reduce argument because the worker and the owner is the same person.
Members would have greater responsibilities so that the business will succeed.
Work will become more enjoyable and better job satisfaction.
Better motivation among the workers would provide a better goods and satisfaction for everyone
As the local people are involved the business has to look closer into the local community.
Like other small firms, all co-op workers must take all the profit or else they will fail. Poor management has closed some co-ops in the past. The workers of a big company that closes down an unprofitable plant form co-ops. If the company with all the resources cannot make a profit, now if you are setting up co-op it is most likely going to be a small business. E.g. The Minehead Shoe Co-operative survived only 14 years. Another problem is that it is often difficult for co-operatives to raise finance or to attract business because people think that co-ops are not good businesses. On the other hand the popular ones are mostly in catering, computers, dressmaking and cleaning.
Britain had the biggest co-operative movement in Europe in the 19th century. Rochdale weavers formed it in 1844 it was a consumer co-operative. It bought food at wholesale price and sold it to members at the market price.
Co-ops societies have more than 8 million members and a turnover of £7.5 billion a year. Smaller businesses have troubles competing with big superstores. These local co-op stores are useful because the elderly and disabled customers might have trouble getting to out-of-town stores. The world could be a better place if there were more co-operatives. Such as businesses and banks etc. Marketing has always been a problem for small businesses. One group that has established a marketing co-operative is the Independent Designers Society. It consists of 50 designers of interiors, furniture, fabrics and similar goods who have linked together to form marketing and export organization. The Co-operative Union links the various co-operative organizations in Britain and acts as their spokesperson.
Franchising is another form of co-operation often between a big firm and a sole proprietor. The big firm has well-known products with their own brands such as McDonalds or a special kind of store such as The Body Shop. In return for an initial fee and paying start up costs to start up your business and your brand name.
Franchising is a big firm, which could decide to expand without using large amounts of capital. First you must have a trial run to see if the idea is practical. If the trial franchise is owned and run by the company, makes a good profit excluding investment costs and overheads, then the company is most likely going to get the go ahead in expanding. The company has to set up a training scheme for the franchise based on learning in the trial operation. When the business is ready, it is ready for franchisees. The advertisements bring replies for jobs. The most promising applicants are interviewed but some of them might not be what you are looking for. If they don’t succeed they could ruin the company’s reputation. A few people are granted franchises in the second year. During the third year they start making profit that increases greatly in later years, as the number of franchises grows.
The advantages of franchising that they have a greater chance of success than most small businesses as the product has been tried and tested and it has got a place in the market. Franchises also benefit from brand name that is used widely across the country from advertising. The franchiser gets continuous support. So if there are any problems they can get advice very quickly. There is a better chance of solving problems as they may have been seen to before or overcome from franchises before this one. They will probably find it easier to raise capital from the banks as they are taking less of a risk with a franchise operation than a small business. Some banks will provide medium term loans of up to five to ten years maybe up to two thirds of the start up costs and an overdraft for working capital or money to run the business with.
The disadvantages in franchising are:
You have less independence than a sole trader.
You cannot sell the business without a franchiser’s agreement.
Does not always have the right to renew franchise automatically
Has to make continuing royalty payments to the franchiser
Sometimes has to pay a mark-up, or percentage of the price, on the supplies from the franchiser.
Private limited companies (Ltd) are companies which shareholders own. The shareholders are usually family members of the people that set up the business and also owned by friends who bought shares in the company but has to have proof that he or she is a friend of yours e.g. picture together, went to the same school etc. Some of the profits may be kept back maybe to pay for improvements in the business and some maybe given to the shareholders as a dividend.
The founders of the business are usually the main shareholders and directors of the firm. The chairperson of the board of directors takes a leading part in deciding the company’s policy. The people who started the company are the real owners not the shareholders despite them buying shares to own some sort of the company. The financial liabilities are limited to a normal capital they invested. Unlike the sole proprietor who has unlimited liability the Ltd has got limited liability.
A company may become insolvent and go into liquidation. This means the company has to pay debts out of their own money. The shareholders don’t pay for any of the debts. Their liabilities would be limited to the money invested in the company. If they invested £2000 in the company by buying shares for that amount, they could lose all that money and not gain any money.
Limited liability is the main advantage of forming a company. There are other advantages of an Ltd. A company is legally a separate entity, distinct from the people who run it which means certain rights can be recognized in the courts. It can buy and sell assets, make contracts, sue other people and companies, and can it be sued.
A company’s shares can be bought and sold. Unlike a sole proprietor the business ends with the owners death. A person can carry on after the previous owner has sold it to some one or has died. The shares can be sold to someone else and the company survives. Small companies are always willing to try something new that is better than bigger businesses which have already made there mark in the market. They have provided more jobs in recent years than have much bigger firms.
The disadvantages of forming a limited company (Ltd) are:
It is more expensive to set up a limited business than a sole proprietor business. A company has to be registered with the Companies Registration Office. To do this it has to employ a solicitor, or a firm specializing in this type of work that could cost up to £180.
A company's accounts must be audited, which means that it has to employ an auditor as well as an accountant.
All companies must hold an annual general meeting (AGM) and send the details to the company's financial affairs to the Companies Registration Office every year.
A limited company is less flexible in some ways that a sole proprietor business, this is seen when there is two documents which state the nature of the business should be run.
In a public limited company the public owns all the shares. The shares give them a great influence in the companies polices and the way in which the company is run. All the shareholders vote at the company annual general meetings (AGM) frequently decide who should be elected to the board of directors. If a company is performing badly, the investors/shareholders can force a chairman or even a whole board of directors to resign. Companies can never ignore their immense power. In contrast, the private investor, who may have a few hundred shares, has very little influence in the business.
In a PLC, the two most important people in the business are the chairperson and the chief executive. In general terms, the chairperson represents the company in the outside world and takes a leading part in making policy. The chief executive is responsible for carrying out company policy and the day-to-day management of the business. Sometimes, the chairperson may also be the chief executive. A managing director I then appointed to carry out the routine tasks of running the business day by day.
In recent years, there have been changes in the ways some companies are managed or run. They are more confident and more open when working as a team. All organizations need leaders who can keep employees working together towards agreed aims or objectives. The three main kinds of leaders:
Autocratic leaders like to tell other people what to do, to make as many decisions as possible, and to keep a firm control over employees. There are many autocratic leaders running big companies.
Democratic leaders like all employees to have a say in how the business works and want to encourage people to work on their own or in a team, and are willing to delegate or give up some of their power to other people. This kind of leader is found in only a minority of companies.
Charismatic leaders have big personalities that appeal to their employees and inspire them to succeed. They delegate much of their work, are easy to approach, and like to be called by their first name. There are only a handful of business leaders of this type.
The main objective of my business is to survive. All businesses main aims are to survive. The only way to make profit in a business is to sell my goods to customers that will be music cds and other things. My company must also:
Pay wages to there workers.
Pay its suppliers so it cannot buy raw materials and services.
Pay interest charges so it cannot borrow money
Pay a dividend (a part of the profits) to its shareholders (people who own a share of the company) so the price of its shares will fall.
Invest money into the business so that it can grow and expand and will also compete with other businesses.
I am locating my business in Croyden in the Whitgift Centre. This will be a good place to set up my business because there is not any music stores in there. Many people live, work and shop in Croyden. It is very the only good music stores in Croyden in that area is Virgin Mega store and HMV. The advantage about this is that these music stores are outside the Whitgift Centre. So any shoppers shopping in the Whitgift Centre. The most important factors are:
Transport Links
Nearness to markets
Work Force
Local Environment
Grants
The good things about having transport links is that I can get my music cds, tapes and other important music things to my store quickly. Transport has given me a greater choice to place my music business. Over 80 percent of my music products are transported by road. There are many roads leading up to the Whitgift Centre. In my business I might need products from abroad so I am hoping there can be a quick link from airports and ship ports to get quickly to my business preferably by road or mail.
My work force will consist of people who are willing to work in my music business and have a little knowledge on the music business. I will pay them a wage which is good and that can compete with my other rivals such as Virgin Mega stores and HMV. All employers will be worked hard at their job. I would preferably employ young people at the age from 16-25 to work in my business
The local environment has to have good facilities and the area must be well populated so that it will be easier to employ people into the music store. There are loads of houses and flats in this area. The houses are at normal size average house. There is a school in the area, which are all state and mix schools and some of them might provide courses for the music business. Their is a college which will be good for people who want to know more about music. There are many shops in their area such as cinemas, fitness clubs and clothes shops and a few clubs. Croyden is very easy to access from anywhere preferably from London and the outer regions of London.
It would not be a good move if I do not have an investment going into my music business. You should not go into a business in an area you don't know just to get a grant because you might not make a profit and maybe your grant will go to waste.
This is where my music store would be situated. The Whit gift center. It would be a two-floor building. The store will take up two floors. The ground floor will have all and r’n’b, rap, garage music etc. The top floor will have the other types of music like pop and rock etc.
I have also thought about using other locations like The Glades shopping centre.
I did not pick this location because the competition is too close to each other like Virgin Megastores and HMV and if I am too close that means that I would not make as much profit as I would of liked to. This is whe
Like my business it is very small and needs simple objectives so that it can achieve its targets very quickly. This may include:
Size and growth- in money invested in the business, turnover, stock market value and the number of employees.
An increase in a company's, or a product's, market share-for example, if the total value of selling cds was £500 million, the music company e.g. Sony, Interscope. They would get about £10 million because there are lots of record companies around the world. The more money you get depends on how many music stuff you sell by the company they would have a certain amount in the market share.
Product development. This will increase turnover and market share.
Keeping customers happy. Companies may see this as an objective or an aim.
All aims apply two small businesses too. In the music business you have to find out what type of music is selling the most and what music is not selling as much. This will give me an idea of what music I should be selling in my business. All objectives should be specific, practical, measurable and easy to explain.
