Types of Business Ownerships Flashcards
(16 cards)
BUSINESS
A business is an organization which seeks to make a profit through Individuals working toward common goals. The goals of the business will
vary based on the type of business and the business strategy being used.
CAPITAL
Capital refers to financial assets or the financial value of assets, such as funds held in deposit
accounts, as well as the tangible machinery and production equipment used in environments such as factories and other manufacturing
facilities. Additionally, capital includes facilities, such as the buildings used for the production and storage of the manufactured
goods.
LIABILITY
A liability is a company’s financial
debt or obligations that arise
during the course of its business
operations.
COLLATERAL
Property or its equivalent that a debtor deposits with a creditor to guarantee repayment of a debt.
TYPES OF LIABILITIES
LIMITED LIABILITY
Type of investment in which a
partner or investor cannot lose more than the amount invested. Thus, the investor or partner is not personally responsible for the debts and obligations of the company in the event that these are not fulfilled.
UNLIMITED LIABILITYAn unlimited liability business
involves joint owners that are
equally responsible for debt and
liabilities accrued by the business; this liability is not capped and can be paid off through the seizure of
owners’ personal assets
LOAN
Written or oral agreement for a
temporary transfer of a property
(usually cash) from its owner (the
lender) to a borrower who
promises to return it according
to the terms of the agreement,
usually with interest for its use.
ASSETS
An asset is a resource with a
monetary value that a person,
business, or country owns or
manages with the hope that it will
bring benefits in the future.
Satisfying a Demand
You may have an idea for a product or service that
meets an unfulfilled need in the marketplace. By
turning your idea into a business, you can be the
first to meet that need which can result in a
profitable venture. You could profit even more by
teaching your idea to others or by creating a
business model, which you can turn into a
franchise
income potential
When you start your own business, you have the opportunity to earn an unlimited income based on your own efforts and the success or
failure of the enterprise. This differs from working for a company where your income may be limited by a salary structure or the evaluation of your performance by your
superiors.
create employment
Businesses can assist in providing jobs for
persons in communities with high levels of
unemployment.
Leadership
If you employ people, leadership will be a key skill.
You must be able to motivate your staff in order to
get the best out of them and improve productivity.
Allocate time to mentor and coach your employees.
As a leader you must also be able to delegate.
Failure to delegate is a trap many business owners
fall in to usually because they are reluctant
to let go of control. Managing your time effectively
may mean delegating responsibility to
someone else in the business or outsourcing.
Identifying who you can delegate tasks to allows
you to concentrate on those tasks that generate
revenue.
Marketing, sales and customer service
It is important to be able to promote your products Or services effectively. Providing
good customer service and having a marketing strategy in place will help you to
generate sales.
financial management
Being able to effectively managing your finances
is a critical. You will need to be able to forecast your cash flow and sales, as well as, monitor
your profit and loss. You will also need to declare your income to the Australian Tax Office. Having sound financial management
skills will help you to run your business profitably and protect your financial investment.
communiation and negotiation
You will need to communicate and negotiate with your suppliers, potential investors,
customers and employees. Having effective written and verbal communication skills will
help you to build good working relationships. Every communication should reflect the image you are trying to project.
Project management and Planning
Starting a business means you will have to manage a range of projects, such as setting
up a website, arranging the fit-out of your premises and developing a range of policies
and procedures. Knowing how to effectively manage your resources, including time,
money and staff will help you to achieve your goals.
