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Title: How important is innovation and enterprise to today’s businesses?Private Businesses
A private a business is a business that aims to make a profit, they do this by setting prices higher so
they can make as much money as possible. The different types of private businesses are;
supermarkets, fashion retailers and restaurants. These are owned by private individuals.
Liability
There are two types of liability, there are unlimited and limited liability. Limited Liability means the
amount of debt you are in is your responsibility to pay back but they are not able to take your
personal assets such as your house. Unlimited liability means that if you are in debt as a business,
they can take away your personal and business assets to pay off the debt you owe. However, if you
are in a partnership, you only must pay off the percentage of business you own but it is still
unlimited liability. Private limited companies have limited liability which means your personal assets
cannot be ceased, this is the same as public limited companies too.
Sole Trader
A sole trader is a business that consists of one owner who has complete control over the decisions of
the business, but as a sole owner they have unlimited liability so if the business became into debt
and they could not pay the debt off their personal assets could be taken to cover the cost of the
debt. But as they would be the only owner, they would get to keep all the extra money the business
makes. There also has no separation as it is owned by one entity, however it could become stressful
as the owner wouldn’t have anyone to help with the running of the business, this also means that
they could potentially make less capital.
Partnership
A partnership could have between 2 and 20 owners which means they would have more expertise to
help expand the business or brand even further. However, with more owners the business could
have more disagreements which could impact the business and its image. A partnership business has
unlimited liability meaning that their personal assets could also be ceased if debt was to occur, with
a partnership business the debt is shared equally with all owners, this also means that any dividends
that is made must be shared equally between the owners. A partnership business also means that
there would be less workload on an individual as it would be shared.
Private Limited Company
A private limited company which can also written as (LTD) is a company that has two separate
entities. A private limited company also has shareholders of friends and family only which means
that they own a certain percentage of the business each which may receive dividends each year,
with this you also get some say in what happens with the business, for example decision making.
Private limited companies have limited liability which means only business assets can be ceased if
debt was to occur.
Public Limited Company
A public limited company that can also be written as PLC is a company that sells there shares on the
London stock exchange. This means that anyone can buy a share into the business. This type of
company has limited liability which means that no person or asset can be seized but business assets
can be to cover debt. This maybe assets like company cars, company vans.
,Co-operative
A co-operative business is a business that is run and owned by their members. Members of a co-
operative business are customers, employees, and local residents, these are able to share the views
and problems and have a share of the profit when it is made. There are over currently 7000 co-
operative businesses in the UK which are owned by more than 17 million members.
Public businesses
A public business is a business that is owned by the government and set up to benefit the public
companies can either be set up by the government or by a form of private business. These are
referred to as public sectors. These are funded by people’s taxes and vat, once the taxes are
collected by the government it is funded to various budgets. Examples of public businesses are bank
of England, BBC, network rail and the national health service.
Government department
A government department influences all aspects of how a business operates. It decides how much
tax the business must pay it also decides what businesses must do to help the impact on the
environment. The government decides how employees should be treated controlled by laws that are
passed through government. They always want businesses to follow the law and pay their taxes.
Not-For-Profit
A not-for-profit business aims to make enough money just so they can pay their running costs, but
they intend to provide a public service or helping people out. Any profit the business makes they put
into the business rather than rewarding their shareholders like private business this does not mean
that they can’t make profit. Examples of not-for-profit business is the national trust, RSPCA, Oxfam
and British heart foundation.
Charitable Trust
For a charitable trust to exist they must make three criteria including public benefit charitable nature
and exclusively charitable this means that to be a charitable trust they have got to help people in
need this could be such as free meals for people who haven’t got the financial means of living.
Voluntary Not-For-Profit
The main feature for a voluntary not for profit organisation is to serve the society, surplus
distribution and it is a separate entity it is very much the same as a not profit organisation but the
staff that work there are not paid, they are volunteers. They do this to help people that are in need.
Profit making business
My profit-making business is Nike who is a private limited company also known as a LTD. This means
that Nike has limited liability which means that any owner’s assets cannot be seized only people that
can invest in the company are friends and family. It also means that they have to publish their
financial information for the public to see Nike in a worldwide company has hundreds of different
stores around the world and also has a online service to. As a profit-making company their aim is to
make as much capitol year on year.
, Not for profit business
My not-for-profit business is Save The Children, it was established in United Kingdom in 1979 and
they help children who are in need. Its competitors are IDEO, Oxfam and Unicef. And are now a
worldwide charity operating in 118 different countries. They have 4,500 volunteers just working in
the UK. The charity is open 24/7 for anybody to contact them, even having interviews take place and
for people to gain information they may need.
Purpose of Businesses Generally
The purpose of a business is to make as much profit as they can or to help as many people in the
community as they can. Not all businesses aim to make a profit, some aim to make enough money to
keep the business afloat steadily. Most businesses aim to meet the customer’s needs and wants so
they will keep loyal customers which will then help to keep the business running. Some businesses
aim to support the community who are in need by reaching out to them with gifts like food packages
and vouchers, where as some business aim to give their shareholders dividends at the end of the
year.
Purpose of Profit-Making Business
The Purpose of Nike is to ‘foster equality and sustainability, across its entire operational process’.
This means they create shoes and clothing for everyone to purchase and use as well as supporting
the community. Nike is also in the lead of sport shoes, appearance, and equipment.
Purpose of Not-For-Profit Business
The Purpose of the charity Save The Children is to keep and help children find and stay in good
quality education. They aim to help 8 million children that suffer from armed conflict gain a good
education and aim to expand and improve their help in countries of importance. Save The Children
also aim to help children and have a clear and confident voice and make sure every child they help
reaches their full potential. They aim to keep children safe, healthy and stay in education.
Difference between Nike and Save The Children
The difference between Nike and Save The Children is that Nike aims to make as much capital as
possible whereas Save The Children aims to help children in the community and countries of poverty
or war. Save The Children must raise money to enable them to help these children and pay their
staff, they do not intend to make a profit, whereas Nike sells their products to customers at a price
where they know they can make quite a bit of profit.
Four Different Sectors
There are four different sectors, Primary, Secondary, Tertiary and Quaternary.
Primary Sector is when part of the economy that grows or extracts raw materials, for example
farming and tree cutting for wood.
Secondary Sector is when they use the raw materials that have been extracted and turn them into
something new. This can be done in two ways, either direct or indirect. Direct is when it is turned to
make a new product. Indirect is when the materials are used to make something else other than the
original product.
Tertiary Sector is a service that people pay money directly to use. For example, hairdressers or
catching a train or bus.
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