Comparing Hobson's (a private limited company) and Mr. K. Day (a sole trader).

Authors Avatar

Matt Halden  Applied business

8125

16201

Comparing Hobson’s (a private limited company) and Mr. K. Day (a sole trader).

Terms of reference:

We need to conduct an investigating of two organisations. The companies are Hobson’s and Mr. K. Day. Hobson’s are a private limited company and Mr. K. Day is a sole trader.

Procedure:

In order to investigate both Hobson’s and Mr. K. Day, I will need to be able to do the following:

  • Complete a questionnaire for both Hobson’s and Mr. K. Day.
  • Read books such as Applied Business and GNVQ Business studies.
  • Look on the web sites of both of the companies.

Findings.

Aims and objectives.

Both Hobson’s and Mr. K. Day have and need aims and objectives. Both companies need aims and objectives to be successful and to improve both of the businesses. Aims are what Hobson’s and Mr. K. Day are hopefully going to improve. Objectives are how Hobson’s and Mr. K. Day are going to achieve their aims. Aims and objectives need to be SMART. SMART stands for:

Specific

Measurable

Achievable

Realistic

Time related

 

Mr. K. Day’s aims:

  • To expand the company
  • To make a profit
  • To provide a service
  • Maximising sales
  • Providing a competitive service

Mr. K. Day’s objectives:

  • To advertise more (A&B)
  • To work longer hours
  • Providing more services (different kinds of services)

Hobson’s aims:

  • To make a profit
  • To provide quality services
  • To provide quality products

 

Hobson’s objectives:

  • To conduct market research
  • To monitor the production line

Business activity.

Hobson’s and Mr. K. Day both carry out many activities. Hobson’s produce army uniforms, scout uniforms and lots of other uniforms for different associations as well. Mr. K. Day provides a service for customers so that the customer can travel. Business activities can be analysed in the following groups:

  • Manufacturing- This could mean making capital goods and consumer goods.     This could also mean making raw materials.
  • Sales- This could be retail in shops or it could be wholesale.
  • Client services- Internet services, such as AOL and Freeserve come into this category. Finachial services, such as insurance and banking services, Health, Dentistry, Leisure and sport also come into this category.
  • Other services- This category covers business that do not fit into any another category, such as Transport and communications.

Mr. K. Day fits into the category of other services because Mr. K. Day provides a service in the transport section. Hobson’s come into the category of sales because they sell products to the public and associations.  

Business can be one of four things or are sometimes a mixture of these things:

  • A retailer- A shop, which is in aid of the public.
  • A producer- Someone who produces raw materials.
  • A distributor- A distributor sells the produced goods to a retailer.
  • A manufacture- A factory where goods are produced.

Mr. K. Day provides a service so Mr. K. Day is not in any of these categories. A&A are at the moment the leading cab firm and possibly the most recognised in Pitsea and Basildon. This means that Mr. K. Day may get more profit because of this. Hobson’s are in the category of retailer and manufacture because raw materials are made they sell goods to associations that need the uniforms like the army and the scouts. Hobson’s are a leading manufacture of uniforms and clothing. Hobson’s will get more profit than other clothing firms.

Type of ownership.

The type of ownership can change the way a business grows and develops. Each type of ownership has its advantages and disadvantages. Here are the different types of ownership:

Sole trader:

A sole trader is someone who works for him/her self. The business is very small. The start up costs are small. Mr. K. Day can employ people if he wants and maybe even go into a partnership. Only Mr. K. Day can expand the business but it would be hard. Profits are all kept. The amount Mr. K. Day spends is up to him but he needs to keep in mind those bills that are needed to be paid. Decisions can be made quicker and Mr. K. Day liable for any actions taken. The business is easy to set up. Mr. K. Day can work whatever hours he wants to. Mr. K. Day has unlimited liability, which means that his own property can be taken away. There are difficulties in raising money. There is slow growth and high risks of failure. There is also lack of continuity.  

Partnership:

A partnership is two people owning a business and is very easy to set up. Business affairs can be kept quite. They can both raise more money to expand the business. They can earn more capital than a sole trader. They can carry out the same activities as a sole trader and may also have unlimited liability.  Mr. K. Day can move into a partnership if he wants to. They both need to work out each of the partners rights and responsibilities and make the responsibilities equal. They may also disagree from time to time over issues in the business. Having a deed of partnership doesn’t make things work out better but possibly make things worse if they break up. They usually use one partner’s savings to start up the business. The partners can have people called sleeping partners, who have limited liability.      

Private limited company:

A private limited company needs to have LTD in its name. Private limited companies and public limited companies both have the same advantage and disadvantages. They can attract shareholders a lot easier than most ownerships. Information about the company is given to the public. It is very expensive to set up reports about the company.  Hobson’s are a private limited company and decided to become a private limited company in 1860 because it can be a family business and also because of limited liability. Hobson’s may take more risks as they will not loose their own passions but they will lose the money they started off the business with. This will make them more adventurous. The family didn’t want to become a sole trader in case they fail and their personnel property may be taken away from them. Hobson’s have limited liability. There must be two or more members. The capital is divided into shares but can only be sold privately, not on the S.E. Hobson’s is a family business. Hobson’s have 17 shares.

Public limited company:

The company must have PL in its name. Private limited companies and public limited companies both have the same advantage and disadvantages. They can attract shareholders a lot easier than most ownerships. Information about the company is given to the public. It is very expensive to set up reports about the company. This is the largest ownership. The owner has limited liability. There must be two or more members. The company can advertise shares on the S.E. This helps raise the capital. An investor becomes part owner and shares in profit and a say in running the business.

The owner’s liability:

The word Liability means state of reliability. Hobson’s have limited liability. This means that creditors, government and lots of other people who Hobson’s owe money to and can take the money from Hobson’s used to start up Hobson’s and then Hobson’s will go bankrupt or go bust. Hobson’s have public and insurance liability. Mr. K. Day has unlimited liability, which means that people can take Mr. K. Day’s house, car, money and much more of his property away from him.  

Business location:

There are nine main influences that Hobson’s and Mr. K. Day need to be aware of when they both locate someone. The nine influences are as follows:

  • The people available with suitable skills
  • The cost of labour
  • The cost of the premises
  • The local government charges
  • Financial help
  • Transport links for suppliers and distribution
  • The need to be where customers are
  • History and tradition
  • Sale techniques

The number of people available suitable skills:

Certain areas of the country are linked to certain types of industry. Pottery companies know that if they want to expand or move then they will expand or move to Stoke-on-Trent in Staffordshire. So if Hobson’s locate somewhere, where there is a lot of industry then they will find the right kind of staff. They need to be able to have people in embroidery and textile skills. Benfleet (Thunderously) does have a lot of this kind of industry. Mr. K. Day doesn’t need to worry about this as he is a sole trader and doesn’t need to employ anyone.

Cost of labour: 

Wages tend to be higher in certain parts of the country where the cost of living is high. The Southeast of England is an example of this high living. Firms that want to keep labour costs low will tend to go to areas where wages are generally lower or where there are large numbers of unemployed people willing to take lower paid work rather than live on benefits. Hobson’s and Mr. K. Day have not located in the areas they have done because of this. Hobson’s where previously located in London and the wages for employees are a lot higher there then in thunderously because living is expensive.  

The cost of the premises:

Premise costs tend to be higher in the Southeast of England than elsewhere. Hobson’s are a big business so they should be able to handle the cost of their premises. Where Hobson’s where previously located the cost of their premises was a lot higher than where they are located now. Mr. K. Day how ever is located in two places. These two places are his house and his taxi. Both need to be paid for in one way or another. Around the country retail premises will cost more in the city centres or major shopping centres. Costs of premises will tend to be lower in outlying shopping areas around a town or a city. Retail or office premises that are on the ground floor of high street shops will be more expensive than those above street level or located away from the high street. The cost of industrial or warehouse premises will be affected by how close the premises are to major motorways and rail links (Networks).

Local government charges:

The households in the are where Hobson’s and Mr. K. Day are located pay council tax. Hobson’s and Mr. K. Day also have to pay a kind of council tax, but its called business rates. These rates pay for things like waste disposal, street lighting and road maintenance. The level of business rates is linked to the property’s rental value and will vary from council to council. It adds to the costs of running the Hobson and Mr. K. Day’s business. Firms will consider the likely level of business rates when deciding where to locate.

Financial help:

The government or the European Union may provide areas of high unemployment with financial help to develop business activity and employment. In some areas Regional Selective Assistance is available for projects that are worth more than £500, 000. Financial help from the government is managed by the Department of Trade and Industry. Local councils can sometimes provide financial help for business in their areas. Financial help from the government is managed by the Department of Trade and Industry. Hobson’s and Mr. K. Day can find more information on . The Local council can sometimes provide financial help for Hobson’s.

Join now!

Transport links for supplies and distribution.

The location chosen by Hobson’s and Mr. K. Day has to be accessible. Local customers need to be able to reach it easily. Businesses that distribute goods services nationally or internationally need to be near suitable transport such as motorways, railways and airports. Hobson’s needed to have motorways in which to deliver by parcels by road. Some motorways that are used by Hobson’s are M25, M1, M16 and the A127. Hobson’s need to be able to have good sea transport and easy to get to ports. Hobson’s may use ports such as ...

This is a preview of the whole essay