The disadvantages of being a sole trader for Radiant hair and beauty is that business at all times - fails to continue when owner dies- this means that they have to be completely devoted to the business – they often can’t have holidays or have breaks and often when the owner dies and no-one wants to take over the business, Radiant hair and beauty would not continue. One of the advantages was you could make your own decisions but that can also be a disadvantage because you are responsible for your actions so you are responsible for all your decisions , you have unlimited liability.
Size
Radiant Hair and Beauty is a micro sized business because they only employ 1-5 people and the owner doesn’t need many employees because he or she knows that they only have a limited number of customers because only local people go there. It is not an international business, it is only in Bermondsey.
Scale
Radiant Hair and Beauty is a local business because there is only one shop and that is in one area- Bermondsey.
Partnership
A partnership is a company that is run by 2 to 20 people who all share the profits and losses, usually equally. In a partnership the owners work together on their business. A partnership is a type of joint investment. There is a deed of partnership which states how the profits and losses will be shared etc. It is easier to set up a partnership than to set up a sole trader business. Most partnerships are small and employ few people but some like D&G are large and employ a lot of people.
Deed of Partnership
A deed of partnership is legally binding documents which all the people involved agree to. It provides information on how the business operates and it states how profit and losses will be shared. It provides information on how much capital each partner contributed.
Business Purposes
The purpose of Ben & Jerry’s partnership is to make a profit from selling high quality ice creams, sundaes and drinks. They became a partnership because they were lifelong friends and they both wanted to do the same thing. One of Ben & Jerry purposes is to increase the amount of customers and they do this by giving out free ice creams once a year every year. Lots of people come to the shop for free ice cream and, Ben and Jerry hope, that they will like the ice cream so much that they will come back and PAY for the ice cream. Another purpose to increase the amount of sales- this is linked to increasing the number of customers but they also want their existing customers to buy more so they set lots of deals like buy 1 get one free etc. One of their other purposes is to advertise their shop so they have their own website and they put up posters on buses and around the world, they also run adverts on TV. They have recently made some hot air balloons with the Ben and Jerry logo on them and one in the shape of an ice cream cone. This created a lot of publicity and increases their customer base. Another of their purposes is to make more profit so that they can increase the quality and the amount of flavours of the ice cream they produce .This in turn will increase the number of customers because the quality is better. Another purpose is to be better than their competitors such as Magnum, Cornetto, Walls, and Tuttifrutti etc.
The advantages of Ben and Jerry’s being a partnership is various ideas/personalities this means that if Ben had a business by himself then he wouldn’t have all the ideas for different flavours of ice cream, advertising ideas and ideas on how to run the business that Jerry would have had- basically the business has benefited from the ideas Jerry has had- which Ben couldn’t have had on his own. More connections are another advantage because Ben might know someone who might invest in them making drinks etc. and Jerry might not have known this person. Another advantage is they divide working hours which is good because they feel less overworked and don’t feel pressurised etc because if they did the business might not run as smoothly as they want it to.
The disadvantage of Ben and Jerry’s being a partnership is Conflict of interest this means that Ben might want to do something which might, in reality make a lot of profit but jerry doesn’t like it Ben might have to back down – and this causes the business to lose profit. If Ben had been a sole trader he could have carried on with his plan and made a lot of profit. Another disadvantage is that they share profit which means that if Jerry wasn’t in a partnership he could be making double that amount of money he is now. This might cause disagreement between the two because Jerry might want to earn more money and Ben is getting in the way of him doing so.
Size
Ben and Jerry is a large business because they employ 2782738918 people. They need this many employees because they have lots of stores worldwide and they have employees all over the world. They make lots of profit-their business is worth around 326 million. They also have lots of customers.
Scale
Ben and Jerry’s is a global business because they have shops all over the world and their products are in most superstores all over the world but they are mostly in the USA, Europe and Asia.
PLC
PLC stands for Public Limited Company. A PLC the largest type of business ownership there is. They sell share to the public. PLCs are usually listed on the stock market – where most PLCs trade their shares (an equal part of ownership.) So if I went and bought a share in a PLC, I would own that part (share) that I bought. The owners of PLCs are called shareholders.
The PLC I have chosen to do is Cadbury’s. Cadbury’s is a chocolate business. They sell chocolate bars, cakes, biscuits, drinks, ice cream and desserts. They also sell chocolates in tins, boxes and jars. Cadbury’s have a wide range of chocolate. They have some shops but mostly they sell through superstores like Tesco. It is the second biggest confectionary business in the world. The purpose of Cadbury’s is to provide its customers with high quality, low cost chocolate products.
Their purpose is to make a good profit from selling chocolate bars, cakes, biscuits, drinks, ice cream and desserts. They want to increase the target audience of their audience so that their sales will be boosted and they will become more recognisable to different groups of people. They also what to advertise their products so that everyone knows that there is a new Cadbury product etc. Another business purpose is to have more market share even though they have the biggest share of the market (35%). They also want to be bigger and better than their rival like Lindt, Kit Kat, Bounty, and Thornton’s etc. They do this by making their products more attractive to the consumer than other brands. They also want to increase the quality and quantity of their chocolates. Another purpose is to bring their products and services to new countries.
The advantage that Cadbury is a PLC is that they various ideas/personalities which mean that because they have so many shareholders all these shareholders have new and different ideas from each other. It also means that they can have many more different ideas than other types of ownership. Another advantage is business unaffected by unfortunate events so if one shareholder dies or is ill, the Cadbury’s carries on functioning with all its other shareholders. Can sell off / transfer shares easily is also an advantage because this means if ever Cadbury’s is in debt etc. then they can easily get out of those debts because it is easy to raise money by selling shares so if they want to fund a new product e.g. Cadbury’s making chocolate drinks then they can sell off some shares and start the project
A disadvantage of Cadbury’s being a PLC is that you earn less money (share profits) because all the shareholders share the profits evenly so if there was just one owner for Cadbury’s then they would be mega- millionaires but because it is being shared among potentially hundreds of shareholders, these shareholders are not very rich even .A disadvantage is overall loss of ownership so because there are so many owners this means that they are all in control so there is no one person who can overrule everyone else (this could be a disadvantage too) but in cases of emergency it is good to have a leader. Another disadvantage is difficult to reach decisions / decisions take longer which is the cons side of having so many ideas and personalities. Loss of Privacy can also be a disadvantage because Cadbury’s have to publish how much they are paying everyone while other types of ownership don’t.
Size
Cadburys is a large business because it employees several hundred people and its profits just this year are $937 million.
Scale
Cadbury’s is worldwide- its bestselling chocolate bar, Dairy Milk is sold in over 30 countries.
Franchise
A franchise is when a business, usually a well known, global business sells the rights to use its name, products, or services to another person who wants to set up a store i.e. If somebody let’s say Bob wants to set up a beauty shop and one of the ways he knows he will definitely get lots of customers is if he uses the name of a well know company so he buys the rights to buy the name and products of Body Shop.
A franchisee is the person who buys the name, product etc. in this case Bob. They must follow rules and guidelines set by the franchisor (see below) and keep up the standard of the business. They might have to buy the same products that they have in all they shops
A franchisor is the business who sells the rights to the name product etc. In this case Body Shop. They are the owner of the name. They own the company overall, products and trademarks etc. They get a percentage of the profit made by the franchisee.
The franchise I have chosen to do is Subway. Subway is a franchise based in America but it is worldwide. They mostly sell submarine sandwiches (hence the name) salads and pizzas. They also sell It is the second largest restaurant chain in the world after Yum! Brands. Subway has about 33,556 restaurants in 92 countries worldwide.
One purpose of Subway is to attract more and more customers to their shops which in turn will fulfil one of their other business purposes – to increase the amount of profit they make. They also want to increase the quality of their sandwiches and salads- they want more of their existing customers to be satisfied so that they will stay at Subway and they want new customers to come to Subway because their [Subways] quality of sandwiches is so high. Another purpose is to increase their market share because they don’t have the biggest market share- they have the second largest, though. They also want to attract customers from other sandwiches shops (or places that sell sandwiches) such as M&S so to do this they have to see what M&S are doing that they aren’t and try and apply this to their shops i.e. if Marks ad Spencer’s are selling tuna sandwiches Subway might try and sell tuna sandwiches in order to attract customers who go to Marks and Spencer’s to buy their tuna sandwiches.
Another business purpose to is to have more shops worldwide and although they are the second fastest growing franchise, they want to be first. They also want to have cheaper prices that their competitors - to attract more customers.
The advantage for Subway to be a franchise is that they will have instant customers because the customers know what kind of food they are getting, the level of service and roughly the amount of money they will be paying. Also they are instantly recognisable .Also it is easier for Subway to advertise their products because they don’t have to make one advert saying “come to the subway on ……” and another saying “come to the subway on……….” Because they can say “come to subway stores all over the world”.
Another disadvantage is that they will have to share their profits with the franchise while that money could have gone into making more interesting burgers. Also they are under pressure to keep up the standard and if it is a world famous franchise their standards will be quiet high. A disadvantage is that it is difficult for the franchisee to sell off the franchise because it can only be sold to someone approved of by the franchise.
Size
Subway is a large business because it has a large amount of business share, it employs many people and makes a large amount of profit.
Scale
Subway is a global business, the biggest restaurant chain in the world after Yum! Yum! Brand.
THE END
