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Unit 11: Setting Up A Business

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by

Lieselotte Pickaert

on 11 November 2014

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Transcript of Unit 11: Setting Up A Business

Unit 11
Setting Up A Business

Sole proprietor
On your own
Self-employed
Entirely responsible

Sole trader
Sole proprietor
Partnership
You & a friend
All partners are responsible for the debts

Shared:
Profits
Losses
Public Limited
Companies
Public
Shares
Stock exchange
Minimum share capital
£ 50,000
Private Limited Company
UK
Min. of 2 shareholders
Appoint a
Director
Secretary
Out of business
Responsibility limited
Limited liability
Ltd after name
Private Limited Company
US
Companies take basic forms
Registered or Incorporated
State: headquarters
Abbreviations
Inc (Incorporated)
Corp (Corporation)
To sell shares to the public -> Apply to SEC

Types of companies
Advantages & disadvantages
Business plan
Sole proprietor
Advantages
Freedom
Boss <-> employee
Make rules <-> follow rules
greater job security (no one can lay you off)
More income
Employee: limited
Boss: financial security
Full control of business
Disadvantages
Financial risk
Fund initial investments
up & running: face financial risk
Responsibility
No help: supervisor
On your own
Working long hours
Affect: health, personal & social life
Stress
Failure
Unlimited liability => lose everything
Major disadvantages

Partnership
Advantages
2 > 1
Easy establish & start-up costs: low
More capital
Greater borrowing capacity
High-caliber employees -> partners
Opportunity
Income splitting => tax savings
Limited external regulation
Legal structure= easy to change
Disadvantages
Liability partners: unlimited
Each partner liable for partnership debts
Liable for
Their share of the partnership debts
All the debts
Risk
Disagreements
Friction
Partners join or leave
Value partnership assets => costly

Public Limited
Companies
Advantages
Shareholders: limited liability
Raise additional capital by issuing
More shares
Debentures
Greater borrowing power
A board of directors
Experience
Expertise
Shareholders can freely
Sell shares
Transfer shares
Disadvantages
Loss of
Overall ownership
Control of the business
Decisions take longer => disagreement
Personal touch: lost
Setting up company: significant expenses
More statutory regulations
Profits shared between greater number of people
Public disclosure financial affairs necessary
Published accounts prepared
Private Limited
Company
Advantages
Limited Liability
Personal assets of shareholders: not at risk
Continuity of existence
Not affected by status of the owner
Shareholders:
Min. 2
Max. 50
More capital can be raised
Scope of expansion = higher


Disadvantages
Growth can be limited
max. 50 shareholders
Shares can't be
Sold
Transferred
Without agreement of other shareholders
Name
Type of business
(Ltd, Plc, Partnership,...)
Sector
Mention if business is
New
Established
Reason for writing BP
Details of the business
Don’t
Make it complicated
Do
Keep business description short
Personal details
Describe
Personal details
Relevant work experience
Personnel
Number of people
Job description
Product / Service
Description of your
Product or service
Explain use
U.S.P
(unique selling
proposition)

Market
Size
Demographics
Structure
Growth prospects
Trends
Sales potential
Describe market
Describe customers
Compare (dis)advantages with your main competitors
Marketing
Sort
Marketing
Advertising
Premises / Machinery / Vehicles
Locate business
Where
Why
Premises
Sort
Size
Machinery/vehicles

Objectives
Objectives
Index
Types of companies
Advantages & disadvantages
Business plan
Conclusion

1. Type of company
Advantages
Disadvantages
2. Business plan
8 essential elements
Full transcript