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Types of Business - Private/Public
Transcript of Types of Business - Private/Public
businesses provide us with goods and services
Different businesses have different advantages and disadvantages. The right type of business structure will depend on many factors and may change over time.
Make up 25% of businesses
Controlled by the government
Assests are owned by the people of the nation or state.
Aim is to provide goods or services to the community
Generally does not raise revenue or income.
make up 75% of all businesses
Assests and resources are owned by individuals, groups or other businesses
Original owners of the business sell the rights to their name, product and system of operation
The franchisor (original owner) recieves a certain percentage of the sales
There are different types of business sectors
Examples include; Department of Education, Police Service,
Earns revenue by charging fees or making sales
E.g. Australia Post - owned by the government but charges for stamps etc.
Business owned and operated by one person
Most common in Australia
Recieves all profit and suffers all losses
Typically owners of shops, cafes, newsagents or self-employed tradespeople such as plumbers.
Usually owned and operated by between 2 - 20 people
Profits and losses are shared equally between the partners
Descions about operations are usually made together.
Often those with similar skills form partnerships e.g. doctors or solicitors
Usually has fewer than 50 private owners
Small to medium sized businesses
Often family owned
Shares only offered to those the business wants as part owners
Must have the words Proprietary Limited (Pty Ltd) after it's name
Limited liability - shareholders only lose the money they have invested
Unlimited number of shareholders
The general public may buy and sell shares in the company (done through the stock exchange)
Mostly large companies
Shareholders have limited liability
Must have limited (ltd) after the name
E.g. Woolworths, Billabong
Owner gets to make all descisions about the running of the business
They get to keep all the profits
Cheap to set up
Can be more difficult to obtain finance
Unlimited liability - sole traders personal assets can be sold off to pay for outstanding debts
Greater access to resources and money
Workload shared between partners
Possible disagreements between partners
Problems may occur if one partner wants to leave
Importance of small business in the Australian Economy
A small business is a non-manufacturing business with fewer than 20 employees or a manufacturing business that employs fewer than 200 employees.
Small businesses create jobs - almost half of Australians employed in the private sector, work for small businesses.