A business sector can be explained as three various things. These are the public, private and voluntary sector also known as the city sector (not for revenue). The three different areas have different purposes and I am going to proceed through what these are.
The private sector is quite the opposite from the public sector. The private sector is run by private individuals rather than controlled by the government. In the united kingdom the private sector employs a lot of the workforce and it is accountable for allocating almost all of the resources within the current economic climate. The primary role of private sector businesses is to make a benefit from the services and products they provide for their customers.
Some types of private sector businesses include retail sales, wedding caterers, entertainment and health. Virgin can be an example of a massive private sector company which makes a significant contribution to the prosperity of the uk.
We can also break this down further as the private sector has businesses that are run diversely to others. These include a sole investor, a partnership, a private limited company, a general population limited company and a franchise. I will now get into information about why each one of the businesses differs which shows why although still falling under the same category of the private sector these lenders are slightly not the same as one another.
A sole trader is a company run by only one person so, must fund the business enterprise out of their own pocket. This sort of business is easily create and you are your own manager which does mean all the profits that the business makes you have the ability to keep all to yourself. This all sounds well and good however, a sole trader also has some disadvantages. First of all, the owner will have to deal with any damage to the business which is unrestricted liability. It might also be quite hard in getting the money to set up a small business as the finance institutions have a stereotypical view of exclusive trader businesses moving away from business in the first time. You also will dsicover you need to work extended hours and get hardly any trip if any whatsoever. Sole professionals are usually quite smaller businesses such as an electrician or a plumber.
A company run by between 2-20 people. Maybe it's much easier for a relationship to get the amount of money together to start out a company as banks look favourably on partnerships as they have a tendency to succeed more in comparison to for example, a exclusive trader. Again, we've disadvantages and features of a relationship. Any damage made within the business can be break up between your owners but evenly any earnings will also need to be divided between all owners. The decision making process could be a disadvantage too. There may be split views on a certain subject which could cause friction between your owners.
Private Small Company
A company owned or operated by shareholders and run with limited liability. A downside to a private limited company would be that they can not offer company stocks to the general public (float its shares on the stock market) this could restrict usage of finance particularly if the business would like to become much larger. Because a private limited company has limited responsibility they are only prone to any debts up to maximum of what they have invested themselves. This of course is a good thing. You can only just lose what you are prepared to put in. An exclusive limited company also has tighter control on who it issues shares to so this is another positive thing.
Public Small Company
Only two people are had a need to run a open public limited company however, there is no upper limit. The public including other businesses can buy shares in the company which is good as this implies an organization can expand using this method. Most of the stocks are bought and sold through the stock exchange as well as for the publics profit the share prices are imprinted in the newspaper publishers so that the public can know the costs. Also, like a private limited company, shareholders have limited responsibility so, if the company were to go bankrupt then the shareholders are only responsible for the worthiness of their stocks.
A franchise is an arrangement between two celebrations to allow an entrepreneur to run a business for someone else but, operate under their name also to sell its goods or services. This arrangement grants the privileges to operate a certain business at an individual address. The privileges in the agreement could allow for use of the company hallmark, designs and booklet keeping etc. There's a much reduced risk in establishing a franchise as opposed to the above samples as the name that you are using to trade under is already a well established business therefore this reduces the chance of setting up a business dramatically. You purchase the image the company has already established.
This sector works on not a lot of costs. This sector has organisations which range from national systems to small local organizations. These include youngsters and community teams, touring clubs, communal clubs, sports team associations and art work associations. The voluntary sector organisations do not make a profit but at exactly the same time they must work in credit if they are to not go bankrupt. Individuals who work for these organisations don't get paid. The amount of money comes solely from donations or fundraising.
2 + 3. Name three businesses from three different Business Industries and illustrate by writing a paragraph on each, what each business does.
Public Sector - NHS
The NHS is publicly funded and provides typically free services to anyone who lives in the united kingdom however, there can be some charges associated with eyes tests, dental hygiene and prescriptions. The business enterprise purpose of the NHS is to provide a service to the general public rather than making a revenue. It's the greatest publicly funded health service in the world and it is funded by the federal government. Around 60% of the budget allocated to the NHS is utilized to pay staff. Drugs and other products take up 20%. The remaining 20% is divide between things such as training costs, medical equipment, wedding caterers and cleaning.
Image extracted from: www. nhs. uk/England/AboutTheNhs/Default. cmsx
Private Sector - Carphone Warehouse
Known as the telephone House beyond the UK the Carphone Warehouse has three different fields of procedure: Distribution, data services and telecom services. The Carphone warehouse offers cell phones, accessories and even insurance. They offer sales of goods where in fact the customer can purchase anything they like in a selected branch over the counter. There is also a website where customers can buy goods and also have them conveniently sent to their home saving money and time. Also, like many successful businesses they may have widened their business countrywide and even in foreign countries which has proven very successful. The primary aim for a private sector business including the Carphone Warehouse is to produce a profit from the assistance they provide with their customers. An exclusive sector company is very unlikely to get involved in the non revenue portion of business.
Store figures at 31st Dec 2009 western european_map. jpg
Image taken from: www. cpwplc. com/phoenix. zhtml?c=123964&p=irol-history
Voluntary Sector - Oxfam
Oxfam was founded in Britain in 1942. It is a non-political, indie organisation, with no spiritual affiliations. Oxfam's purpose is a simple one: To work with others to find sustained answers to poverty and anguish. This is given on the website www. oxfam. org. uk/coolplanet/kidsweb/oxfam/whatox. htm
Oxfam have programmes in over 70 different countries. They work with residents to assist in improving their life. They might help educate health workers, setup a college and safeguard water supplies.
Oxfam respond to emergencies helping people who have been struck by a disaster like that of a hurricane or a flood. In addition they speak up on behalf of people to ensure that governments pay attention to them and work on better supporting people in disaster hit areas.
A voluntary sector company such as Oxfam does not work like the other areas do. They do not exist to make a profit and are not funded by the federal government. They count on donations and fundraising by every day normal visitors to help them keep operating.
4. Justify why each of the 3 businesses is its sector
Public Sector - NHS
The NHS is at the public sector which is purchased by the government. It really is in this sector exactly for that reason. The government pays the staff utilized by the NHS who are doctors, nurses and midwifes etc. The NHS is different from an exclusive sector company as it generally does not seek to make income but instead it offers something to the people. They could charge for a few things like a prescription or an eyesight test but overall the NHS is a free service funded by the government which originates from taxes payer's money.
Private Sector - Carphone Warehouse
The Carphone Warehouse is in the private sector as its main aim is to produce a profit and maximise its revenue. All private sector companies have the same target. They all exist to produce a profit. They are not funded by the government (open public sector) plus they do not exist to give a free service and rely on donations to perform the business (voluntary sector). This is why the Carphone Warehouse works with in to the private sector.
Voluntary Sector - Oxfam
Oxfam is in the voluntary sector as it's neither funded by the government nor create to produce a revenue. Oxfam is a recorded organisation that aims to help people in need. The assistance they offer are free. The money to help keep the charity jogging should be lifted from fundraising and donations.
5. Describe the term "Business Classification"
"The systematic planning of business procedures into groupings or categories corresponding to certain requirements. "
Another way to describe this is to say that we have three different Business areas, Primary, Extra and Tertiary. These three industries are split based on the type of service they provide, this is exactly what we call Business Classification. For instance, the primary sector will take natural resources and converts them into major products. All businesses that fall under this category are therefore classed as key. We can use in the principal sector, agriculture, angling, forestry, mining, oil extraction and quarrying.
The extra and tertiary areas are arranged just as. The extra sector is made up of businesses that make finished goods. Manufacturing business such as vehicle development, making of clothing and executive all come under the extra sector.
Finally, the tertiary sector is made up of businesses that sell a product to the general public. The tertiary sector provides services to the general populace and businesses. We are able to include retail, transportation and restaurants under the tertiary sector.
So, to conclude, Business Classification means to organise businesses into sectors that match the criteria where they operate.
6. Explain why it is important to truly have a Business Classification system
It is important to a whole lot of people including the government that people have a small business classification system so, we can notice certain specific areas which need bettering or so that individuals such as traders know where you can invest their money (or to at least have a good idea). To give an example of this, we're able to have a potential trader who is seeking to invest some money into a certain business sector. This person would need to know what is happening in the several sectors so he is able to know how secure his investment within that area is. If he didn't have the right information that he needed then he might put big money at risk being unsure of what will eventually it whereas, with the right information and by taking a look at the development and decline in certain sectors, he is able to be more sure of where his money would be safer placed.
It is also important that people have a Business Classification system so the government can effectively record information from the various business sectors to show which areas are growing and which can be declining. This is vital so our economy is often progressing the best that maybe it's. The federal government will know by looking at the various areas which areas need money placed into them and which areas don't need all the help.
7. Provide one example of the business from each kind of Business Classification and say why it's been contained in that classification
Primary - Fishing
Fishing is female sector business as fishermen take natural resources and convert them into key products. In this particular example it might be the many different kinds of fish that they get (natural source of information) and then become a primary product permitting them to be sold at a fish market or similar.
Secondary - Car Manufacturing
Car manufacturers match the supplementary sector as they produce a finished functional product such as with this example an automobile. They manufacture a product so they are categorized as the extra sector.
Tertiary - Supermarkets
A supermarket falls under the tertiary sector as they provide services to the overall population and businesses. A supermarket will typically purchase made goods from supplementary sector businesses and sell them to the consumers. An example could be fish. At first female product which is then made (a secondary product) then sold to the general public by the supermarket (tertiary).
8. Explain which areas as identified by the Business Classification System, are growing and that happen to be declining
Although in the primary sector there are certain areas that happen to be growing such as the production of organic food and the removal of mineral deposits, overall the sector is declining. We are able to see various different known reasons for this including that of non renewable resources. We only have limited amounts of things such as coal, petroleum and gas. All of these things cannot be produced, expanded or produced. Once they are gone, they are gone.
A range of Nottingham mines have closed down over the years like the RJB owned mine which found its income drop dramatically before its closure. The coal reserves soon ran out which induced hundreds of employees to copy to other mines in your community.
We are now importing a whole lot of non renewable sources from in another country. We do that because finding new resources can be quite expensive and difficult. This, of course, causes the principal sector to decrease.
The extra sector is declining and I believe the obvious thing here's of course the advancements in technology. Why would a business pay for an individual to execute a job whenever we will have robots that can do things at a much lower cost as well as perhaps even better than a individual? Also, a lot of companies have now relocated in another country to countries where processing costs are much lower so that they can continue to make profits instead of paying high labour costs. Good examples could be of the textile and dispatch building industries which have vanished credited to cheap imports. This also causes the extra sector to decrease.
The tertiary sector is forever growing which is because everyone needs a service that falls under the tertiary sector. Everyone needs to eat so we have places like McDonalds and Burger King. As a country becomes more developed there is an increasing dependence on tertiary sector services such as transportation and banking. The tertiary sector should keep gradually growing over time because again the demand for goods keeps growing.
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