Tuesday, 31 January 2017
Target market
The 4p's stand for product, price, place and promotion.Inmy business I would like to do photography.
Monday, 9 January 2017
Legal and Financial Aspects
Sole trader: A sole trader describes any business that is owned and controlled by one person, although they may employ workers, e.g. a newsagent's shop. Individuals who provide a specialist service like hairdressers, plumbers or photographers, are also sole traders. Sole traders do not have a separate legal existence from their owner. As a result, the owners are personally liable for the firm's debts, and may have to pay them out of their own pocket. This is called unlimited liability.
Advantages
- The firms are usually small, and easy to set up.
- Generally, only a small amount of capital needs to be invested, which reduces the initial start-up cost.
- The wage bill will usually be low, because there a few or no employees.
- It is easier to keep overall control, because the owner has a hands-on approach to running the business and can make decisions without consulting anyone else.
Disadvantages
- The sole trader has no one to share the responsibility of running the business with. A good hairdresser, for example, may not be very good at handling the accounts.
- Sole traders often work long hours and find it difficult to take holidays, or time off if they are ill.
- Developing the business is also limited by the amount of capital personally available.
- There is also the risk of unlimited liability, where the sole trader can be forced to sell personal assets to cover any business debts.
Partnership: Partnerships are businesses owned by two or more people. A contract called a deed of partnership is normally drawn up. This states the type of partnership it is, how much capital each party has contributed, and how profits and losses will be shared. Doctors, dentists and solicitors are typical examples of professionals who may go into partnership together. They can benefit from shared expertise, but like the sole trader, have unlimited liability. A partnership can also have a sleeping partner who invests in the business but does not have dealings in the day to day running of the enterprise.
Advantages
- The main advantage of a partnership over a sole trader is shared responsibility. This allows for specialisation, where one partner's strengths can complement another's. For example, if a hairdresser were in partnership with someone with a business background, one could concentrate on providing the salon service, and the other on handling the finances.
- More people are also contributing capital, which allows for more flexibility in running the business.
- There is less time pressure on individual partners.
- There is someone to consult over business decisions
Disadvantages
- The main disadvantage of a partnership comes from shared responsibility.
- Disputes can arise over decisions that have to be made, or about the effort one partner is putting into the firm compared with another.
- The distribution of profits can cause problems. The deed of partnership sets out who should get what, but if one partner feels another is not doing enough, there can be dissatisfaction.
- A partnership, like a sole trader, has unlimited liability.
Laws:In the business life there are laws that you have to abide, in other words legislations. This is basically laws that are set by the legislative governing body. For example health and safety. This law is to protect the health, the well being and safety of it's employers. By defining general duties for specific types of people for example employers under or over 18 employers, contractors etc.A good thing about the HSA is that it boosts employee’s morals because they know they are working in a safe area, which could also increase productivity as a worker. Another legal aspects within a small business would be contracts, which is written or spoken agreement between an employee and employer. In this agreement the employee would be informed on their roles within the business, employment conditions, rights and duties. Fr example within the gaming business they would hire a graphic designer and their role would be to design the art work for all developing games and also design all of the print and web advertisements for these games. Their pay would be £22,000 per annum, their entitled for a two week holiday all paid and have an hour break. If they are late for work they will receive a warning, if they get three warnings then it's an automatic disciplinary. Any misconduct regarding the internet or work software will result in a disciplinary or dismissal.In some circumstances they may find themselves needing advice for legal confrontations they may encounter. For example within the small business if they ever get into any copyright issues with another game similar to other people's or customers are complaining because their game is too violent or offensive etc. Reasons such as these would lead them to call upon the help of a Solicitor, who is a lawyer that indulges in legal matters and is able to give legal advice specific to their current situation. Another form of advice they can get is from an accountant, which every business would have within there business. However within a small business they may find someone else doing this job as part of there multiple role contract. If they were in any financial troubles E.g. their in debt, games aren’t selling well enough, can’t afford over costs, cant work out TAX or VAT etc. Then their accountant would step in and give them advice on how to spend/invest their money more wisely and help them implement short or long term strategies to help them save or earn more money.
TAX
This is compulsory financial charge on working person in the majority of countries worldwide. The tax payments fund the country that people live in today. In England they have free health care because they our axes, public schools, roads works, police force, social services etc. Our tax money goes towards our quality of living. One of the most largest sources of revenue for the government is corporation TAX. This is where the profits are retained from companies for example code masters, non-UK permanent establishments e.g. EA's London studio and the association trades with the E.U. Another method of TAX consumption is VAT (value added tax) which is usually bundled in with the retail price on goods and service they pay for. Most consumers don't realise there actually paying into it but they did to take it away from our purchases it would make a significant difference. They pay 0% tax on most foods and children’s clothes, 5% on some goods and services E.g. Energy saving materials, car seats etc. 20% the majority of goods and services that don’t fit into the previous categories. Which means that depending on your income, tax will get taken directly from your monthly or weekly wage. Usually the more you earn the more tax your required to pay.
Sources finance
All start up businesses need a fairly large sum of capital for it to be up and running, although it can be very difficult for people to raise this type of money there is financial help out there to help people. Things like the grants and loans can be given out through the government or there projects that they have to apply for E.g. Princes Trust. An advantage of this is usually they’ll give them some professional business advice and help because they have to pay this money back and they want to equipped them with the skills so there able to do so. Another advantage is that because it’s from the government for them to borrow larger sums of money in comparison to loaning from a friend or business angel. Some disadvantages would be that to actually get a grant or loan from the government is quite competitive, other people are there for the same reason so you need to make sure you have a strong idea and business pitch. Another disadvantage is that they are limited to what they actually spend the money on if received, they’ll monitor there spending habits regularly, making sure your spending the money appropriately.
Financial systems
The general purpose of starting up a company is to make money, thus meaning they’ll need to know certain skills/systems used to work out some of the most complicated financial problems. Things like working out ‘Cash Flow’ they’ll need to know because this is how they keep track of the money coming in and out of their company. By monitoring and know how to manage their cash flow they can eliminate any unnecessary expenditure enabling them to save money. From this they could work out a ‘Cash flow Forecast’ which is a prediction of the financial situation your business will be in years/months/days to come. This is good because they can analyse the market and plan there next move, eliminating or tactically planning there way around future problems to avoid liquidation.
Another useful skill to know when dealing with finances is knowing how much share of the market they have. This involves them analysing their competition in the same field to see what percentage of total sales volume within the market. This is good to know because they can keep track if they are falling behind in sales and devise a plan to gain back their market share. For example when the 3rd generation consoles were released (PS3, Xbox & Wii) they would most likely arrange graphs or pie charts to analyse the gaming market.
Credit control
Internal credit control is pretty much the money that comes into your business and it is a method that is used to make sure everything goes smoothly in your business and how it does that is by showing the true cost of everything and the costs on the side are the external costs which you don't see which is paid by society. As an example, if you own a car you are paying for things such as petrol and this is an external cost and the car is the internal cost because that is taken into account. This works the same in businesses, you may be paying an external cost after you have paid the internal cost and that shows the true market price of the item. You can control your money by monitoring what goes in and out of your company and also by monitoring the stocks and assets you may own because if prices dip then you can sell before hand so you can get some what of a profit.The kind of positives you may have with internal credit control is things such as it will help you achieve your objective because all the information you are getting is 100% correct and it safeguards your assets.The kind of things that can go wrong if you do not control your costs is you can go into debt overtime because you are not looking at what goes in and out of your business and therefore you can fall into debt.
External credit control is pretty much working with people outside of your company and making sure you both reach some kind of deal that works for both parties and the way you can do this is by seeing how bad/good the credit is of who you are working with and from that you can make a judgement on if you should be working with them because if they have bad credit.If you are going to work with someone then you should probably look at their invoices to see how good their credit control is before you decide to jump into some sort of investment with them because if they happen to have bad credit control then you might be taking a risk of going bankrupt.You could also run the risk of not having payments in on time and that can create tension within the partnership between both sides of the party.
TAX
This is compulsory financial charge on working person in the majority of countries worldwide. The tax payments fund the country that people live in today. In England they have free health care because they our axes, public schools, roads works, police force, social services etc. Our tax money goes towards our quality of living. One of the most largest sources of revenue for the government is corporation TAX. This is where the profits are retained from companies for example code masters, non-UK permanent establishments e.g. EA's London studio and the association trades with the E.U. Another method of TAX consumption is VAT (value added tax) which is usually bundled in with the retail price on goods and service they pay for. Most consumers don't realise there actually paying into it but they did to take it away from our purchases it would make a significant difference. They pay 0% tax on most foods and children’s clothes, 5% on some goods and services E.g. Energy saving materials, car seats etc. 20% the majority of goods and services that don’t fit into the previous categories. Which means that depending on your income, tax will get taken directly from your monthly or weekly wage. Usually the more you earn the more tax your required to pay.
Sources finance
All start up businesses need a fairly large sum of capital for it to be up and running, although it can be very difficult for people to raise this type of money there is financial help out there to help people. Things like the grants and loans can be given out through the government or there projects that they have to apply for E.g. Princes Trust. An advantage of this is usually they’ll give them some professional business advice and help because they have to pay this money back and they want to equipped them with the skills so there able to do so. Another advantage is that because it’s from the government for them to borrow larger sums of money in comparison to loaning from a friend or business angel. Some disadvantages would be that to actually get a grant or loan from the government is quite competitive, other people are there for the same reason so you need to make sure you have a strong idea and business pitch. Another disadvantage is that they are limited to what they actually spend the money on if received, they’ll monitor there spending habits regularly, making sure your spending the money appropriately.
Financial systems
The general purpose of starting up a company is to make money, thus meaning they’ll need to know certain skills/systems used to work out some of the most complicated financial problems. Things like working out ‘Cash Flow’ they’ll need to know because this is how they keep track of the money coming in and out of their company. By monitoring and know how to manage their cash flow they can eliminate any unnecessary expenditure enabling them to save money. From this they could work out a ‘Cash flow Forecast’ which is a prediction of the financial situation your business will be in years/months/days to come. This is good because they can analyse the market and plan there next move, eliminating or tactically planning there way around future problems to avoid liquidation.
Another useful skill to know when dealing with finances is knowing how much share of the market they have. This involves them analysing their competition in the same field to see what percentage of total sales volume within the market. This is good to know because they can keep track if they are falling behind in sales and devise a plan to gain back their market share. For example when the 3rd generation consoles were released (PS3, Xbox & Wii) they would most likely arrange graphs or pie charts to analyse the gaming market.
Credit control
Internal credit control is pretty much the money that comes into your business and it is a method that is used to make sure everything goes smoothly in your business and how it does that is by showing the true cost of everything and the costs on the side are the external costs which you don't see which is paid by society. As an example, if you own a car you are paying for things such as petrol and this is an external cost and the car is the internal cost because that is taken into account. This works the same in businesses, you may be paying an external cost after you have paid the internal cost and that shows the true market price of the item. You can control your money by monitoring what goes in and out of your company and also by monitoring the stocks and assets you may own because if prices dip then you can sell before hand so you can get some what of a profit.The kind of positives you may have with internal credit control is things such as it will help you achieve your objective because all the information you are getting is 100% correct and it safeguards your assets.The kind of things that can go wrong if you do not control your costs is you can go into debt overtime because you are not looking at what goes in and out of your business and therefore you can fall into debt.
External credit control is pretty much working with people outside of your company and making sure you both reach some kind of deal that works for both parties and the way you can do this is by seeing how bad/good the credit is of who you are working with and from that you can make a judgement on if you should be working with them because if they have bad credit.If you are going to work with someone then you should probably look at their invoices to see how good their credit control is before you decide to jump into some sort of investment with them because if they happen to have bad credit control then you might be taking a risk of going bankrupt.You could also run the risk of not having payments in on time and that can create tension within the partnership between both sides of the party.
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