Business Organisations - Mind Map
Mind Maps have been produced to introduce topics and give students an overview of key topics being studied. The maps can be viewed as a whole page or, for those who prefer a more linear approach, as a text version.
View larger version of the mind map.
- Decision
- High risk versus low risk
- Type of business
- Access to capital
- Size of market
- Objectives of owner/s
- Other factors such as access to credit
- Risk
- All business involves risk
- Risk relates to potential losses/damage incurred if something goes wrong
- Have to balance risk and reward
- Some organisations have more risk attached
- Sole Trader
- Easy to set up
- One owner
- Owner has all responsibility BUT:
- Also takes all rewards
- Unlimited liability
- Often huge pressure/responsibility
- Can bring rewards other than profit
- Must meet all legal and tax requirements
- Owner and business are one and the same
- Private Limited Company (Ltd)
- Owned by shareholders
- Minimum of one owner
- Share/transfer issues must be agreed by all shareholders
- Limited liability
- Owner and business seen as legally different
- Ltd company can have access to more capital
- Responsibilities can be shared
- Franchise
- Purchase of the right to operate under another business name
- Franchisee pays a fee to franchisor
- Support from franchisor is available
- Reduces risk
- Franchisor takes proportion of profits
- Some restrictions on running the business
- May be benefits linked to location agreements to restrict competition
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