22739250
Description
Mind Map by Alicia Whyte McGivern, updated more than 1 year ago
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Created by Alicia Whyte McGivern
over 4 years ago
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BUSINESS OWNERSHIP pt 2
- Economic System
- PLANNED/COMMAND
- A planned economy is one
where the government make
all the decisions; e.g. Cuba
- A planned economy is one
where the government make
all the decisions; e.g. Cuba
- MIXED
- A mixed
economy, is
one in which
the
government
own and run
some
businesses,
and others are
owned by
private
individuals;
e.g. UK and
the Republic of
Ireland
- A mixed
economy, is
one in which
the
government
own and run
some
businesses,
and others are
owned by
private
individuals;
e.g. UK and
the Republic of
Ireland
- MARKET
- A Market
economy is one
in which most
businesses are
privately
owned; e.g.
America is
probably the
closest
(however it is
becoming more
of a mixed
economy)
- A Market
economy is one
in which most
businesses are
privately
owned; e.g.
America is
probably the
closest
(however it is
becoming more
of a mixed
economy)
- PLANNED/COMMAND
- ALL THE DIFFERENT TYPES
- SOLE
TRADER
- 1 Owner
- Any no. of employees
- Most common form of
business ownership
- ADVANTAGES
- 1. Own Boss. 2. Keep all
profits (after tax). 3.
Total control. 4. Greater
opportunity for flexible
working 5. Easy to set up
(few legal requirements -
get a licence trade from
the local council;
perhaps planning
permission (if a building
has to be altered); and
must register for VAT,
Customs and excise.
- 1. Own Boss. 2. Keep all
profits (after tax). 3.
Total control. 4. Greater
opportunity for flexible
working 5. Easy to set up
(few legal requirements -
get a licence trade from
the local council;
perhaps planning
permission (if a building
has to be altered); and
must register for VAT,
Customs and excise.
- DISADVANTAGES
- 1. Unlimited Liability 2. No
continuity of existence. 3.
Lack of specialisation 4.
No one to share decision
making with. 5. More
difficult to compete with
larger businesses (as they
cannot take advantage of
economies of scale). 6.
Limited Finance - banks
are less willing to lend
them money as the
business is small.
- Unlimited Liability: If
the owner doesn't
have enough money
in their business to
pay their debts, they
have to use their
private money to
meet them -
potentially resulting
in extreme
consequences i.e.
their house/car may
have to be sold.
- Unlimited Liability: If
the owner doesn't
have enough money
in their business to
pay their debts, they
have to use their
private money to
meet them -
potentially resulting
in extreme
consequences i.e.
their house/car may
have to be sold.
- 1. Unlimited Liability 2. No
continuity of existence. 3.
Lack of specialisation 4.
No one to share decision
making with. 5. More
difficult to compete with
larger businesses (as they
cannot take advantage of
economies of scale). 6.
Limited Finance - banks
are less willing to lend
them money as the
business is small.
- MAJOR AIM;
- Profit and Expansion
- Profit and Expansion
- private sector
- 1 Owner
- SOLE
TRADER
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