types of businesses

• types of organisation


  - private sector

  - public sector

  - third sector
• private sector


  - owned by individuals

  - profit-driven

  - benefits owners, shareholders, and investors

  - financed by shareholders and bank loans
• public sector


  - owned by government

  - provides goods and services for community benefit

  - funded by taxes
• third sector


  - owned and run voluntarily

  - not profit-driven

  - focused on community assistance

  - funded by donations and gifts

  - profits reinvested in organisation
• types of private sector business

  - sole trader

  - partnership

  - private limited company
• private limited company


  - incorporated business with limited liability

  - owned by shareholders

  - separate legal entity
• sole trader


  an individual who owns and runs their business as the sole owner and operator
• sole trader advantages


  - owner keeps all profits

  - complete control of business decisions

  - easy to set up
• sole trader disadvantages


  - unlimited liability (the sole trader is personally responsible for all business debts and losses)

  - heavy workload and responsibility

  - limited finance for expansion
• partnership


  - business owned by 2 or more individuals (up to 20) who work together to make a profit

  - share resources like money, skills, or labour

  - have joint and several liability
• partnership advantages


  - more potential for raising funds

  - varied skills and expertise

  - workload and financial risks are shared
• partnership disadvantages


  - profits shared

  - disagreements can occur

  - unlimited liability
• private limited companies (ltd)

  - a privately owned business entity, separate from its owners, with a limited number of shareholders

  - shares are not traded publicly

  - managed by directors appointed by shareholders
• private limited company advantages

  - shareholders have limited liability (shareholders' personal assets are protected if the company fails)

  - easier to secure investment (as banks often prefer to lend to businesses with limited liability)
• private limited company disadvantages

  - more complex and costly to set up

  - certain financial information must be disclosed and made public

  - profits are shared with shareholders, which might not motivate non-shareholder employees
• public sector organisations

  - owned and operated by the government at various levels (local, regional, national) to serve the public interest and provide essential community services

  - examples include the National Health Service, UK armed forces, the BBC, and local council services like education and waste management

  - they are funded through government revenues such as taxes and government budget allocations
• public sector organisations advantages

  - public sector organisations focus on the public interest, offering essential services that benefit society, such as health and education

  - they have stable funding, which allows for consistent service delivery even in economic downturns

  - they promote social equity by providing for disadvantaged groups and reducing access disparities, ensuring everyone can receive necessary services
• public sector organisations disadvantages

  - these organisations can be slowed by bureaucracy, making it hard to make and implement decisions quickly

  - they depend on government funding, which can fluctuate with budget and political changes, affecting their service capacity

  - political influences may also challenge their independence and impartial decision-making, impacting effectiveness and public trust
• charity

  - an organisation set up to advance a specific cause or mission

  - focuses on societal needs such as education, healthcare, poverty alleviation, environmental conservation, etc

  - they operate as non-profit entities, reinvesting any surplus funds into their mission
• charity advantages

  - support important causes, improving community and individual well-being

  - provide a platform for volunteers to contribute to meaningful work
• charity disadvantages


  - challenging to secure enough funding to sustain operations

  - competing with other charities for donations and managing the impact of economic changes on donor support
• community groups/organisations


  - formed by people in a specific area to address local needs, improve community well-being, and support community development

  - they rely on volunteers and can vary in focus, like crime prevention or health and wellness
• community groups/organisations advantages


  - they deeply understand local issues and can act effectively to address them

  - they empower locals to actively contribute to and shape their community's future, enhancing community pride
• community groups/organisations disadvantages


  - they often struggle with limited funds, expertise, and access to facilities

  - volunteer burnout and maintaining a steady volunteer base can be difficult, especially without formal recognition or support from larger institutions
• social enterprise


  - businesses that aim to address social or environmental issues through their activities and use their profits to further these social missions

  - unlike typical non-profits, they generate revenue and profits through business operations
• social enterprise advantages


  - they can generate their own income, which reduces reliance on donations and grants, aiding in financial self-sufficiency

  - social enterprises often use innovative and entrepreneurial methods to tackle complex social issues
• social enterprise disadvantages


  - accessing adequate funding and investment can be difficult since their social objectives might not align with traditional business funding models

  - they face competition in the market, just like any other business, which can impact their sustainability and growth
• not-for-profit organisations


  - aim to provide services or address societal issues without seeking to make a profit

  - they cover a wide range, including charities, community services, educational institutions, and environmental groups

  - their goal is to serve the community, raise awareness, and be socially responsible, reinvesting any surplus funds back into their mission
• not-for-profit organisations advantages


  - they focus on making a positive societal impact, addressing specific issues, and improving individual well-being

  - instead of paying out profits, they reinvest any extra funds to further their mission, ensuring that all resources are dedicated to their cause
• not-for-profit organisations disadvantages


  - securing adequate funding to sustain their operations is a significant challenge, particularly during times of economic difficulty or when facing cuts in funding

  - this can affect their ability to deliver programs and services effectively