Classification of businesses

Mind Map by wehoward, updated more than 1 year ago
Created by wehoward about 6 years ago


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Resource summary

Classification of businesses
  1. Primary sector
    1. Secondary sector
      1. Tertiary sector
        1. Providing services to the final consumers or businesses
        2. Taking the natural resources produced by primary sector activity and turning it into finished goods
        3. Extracting or harvesting natural resources from the land or sea
        4. Chain of production
          1. The production and supply of goods to the final consumer involves activities from primary, secondary and tertiary sector businesses
          2. Industrialisation
            1. The growing importance of secondary sector business activity and the reduced importance of primary sector business activity
            2. De-industrialisation
              1. The growing importance of the tertiary sector and the reduced importance of the secondary sector
              2. Mixed economy
                1. Resources are owned and controlled by both the private and public sectors
                  1. Private sector
                    1. The part of the economy owned and controlled by individuals and companies for profit
                      1. Enterprise and entrepreneurship
                        1. Entrepreneur
                          1. An individual who has an idea for a business and takes the financial risk of starting and managing a new business
                            1. Business plan
                              1. A detailed written document outlining the purpose and aims of a business
                                1. Types of business organisation
                                  1. Sole trader
                                    1. A business owned a managed by one person who takes all the risks and receives all the profits
                                      1. Start-up capital
                                        1. The finance needed when first setting up a business
                                      2. Partnership
                                        1. A business owned and managed by two or more people
                                        2. Private limited company
                                          1. A small to medium-sized company owned by shareholders who have limited liability
                                            1. Public limited company
                                              1. A large company owned by shareholders who have limited liability
                                                1. Limited liability
                                                  1. The shareholders only risk losing the amount they have invested in a company and not any of their personal wealth
                                                    1. Unlimited liability
                                                      1. Owners might have to use their personal wealth to finance any business debts
                                              2. Franchise
                                                1. A business system where entrepreneurs buy the right to use the name, logo and product of an existing business
                                                  1. Business objectives and stakeholder objectives
                                                    1. Objective
                                                      1. A specific target to be achieved. They should be SMART (Specific, Measurable, Achievable & Agreed, Realistic & Relevant, Time-specific)
                                                      2. Different business objectives
                                                        1. Survival
                                                          1. Profit
                                                            1. Growth
                                                              1. Market share
                                                                1. The revenue of a business expressed as a percentage of total market revenue
                                                                  1. Corporate Social Responsibility (CSR)
                                                                    1. Businesses taking responsibility for the impact their activities might have on society and the environment
                                                                      1. Pressure group
                                                                        1. Organisations of like-minded people who put pressure on businesses and government to change their policies to reach a predetermined objective
                                                                        2. Social enterprise
                                                                          1. A business with social objectives that reinvests most of its profits back into the business or into benefiting society at large
                                                                    2. Stakeholder
                                                                      1. An individual or group which has an interest in a business because they are affected by its activities and decisions
                                                                        1. Internal stakeholders are within the business whereas external stakeholders are outside the business
                                                                          1. Internal: owners and shareholders, managers, employees
                                                                            1. External: lenders, suppliers customers, government, local community
                                                                            2. Stakeholder objectives
                                                                              1. Owners
                                                                                1. Receive high dividends as a reward for investment risks
                                                                                  1. Benefit from an increase in share value
                                                                                  2. Managers
                                                                                    1. Job satisfaction and status
                                                                                      1. Receive salary increase and bonuses
                                                                                      2. Employees
                                                                                        1. Job security
                                                                                          1. Receive a fair wage
                                                                                          2. Lenders
                                                                                            1. Receive investment payments when due
                                                                                              1. Borrowing repaid by date due
                                                                                              2. Suppliers
                                                                                                1. Receive prompt payment
                                                                                                  1. Treated fairly
                                                                                                  2. Customers
                                                                                                    1. Receive quality goods and after sales service
                                                                                                      1. Charge a fair price
                                                                                                      2. Government
                                                                                                        1. Paid the correct amount of taxes on time
                                                                                                          1. Minimal spending on unemployment benefits
                                                                                                  3. Public corporation
                                                                                                    1. A business organisation that is owned and controlled by the state
                                                                                                  4. Joint ventures
                                                                                                    1. Two or more businesses agree to work together on a project and set up a seperate business for this purpose
                                                                                                2. Business start-up
                                                                                                  1. A newly formed business
                                                                                                3. Revenue
                                                                                                  1. The amount a business earns from the sale of its products
                                                                                                4. Innovative
                                                                                                  1. Self-motivated and determined
                                                                                                    1. Self-confident
                                                                                                      1. Multi-skilled
                                                                                                        1. Leadership qualities
                                                                                                          1. Initiative
                                                                                                        2. Results driven
                                                                                                      2. Risk-taker
                                                                                                        1. Good at networking
                                                                                                      3. Measuring business size
                                                                                                        1. Capital employed
                                                                                                          1. The value of all long-term finance invested in a business
                                                                                                          2. Value of output
                                                                                                            1. The amount businesses earn from selling their products
                                                                                                            2. Number of employees
                                                                                                              1. Market share
                                                                                                                1. The portion of a market controlled by a particular company or product
                                                                                                                  1. Why owners may want to expand their business
                                                                                                                    1. Increase in profits
                                                                                                                      1. Increase in market share
                                                                                                                        1. Economies of scale
                                                                                                                          1. Greater power to control the market
                                                                                                                            1. Protection from the risk of takeover
                                                                                                                              1. Internal growth
                                                                                                                                1. Why some businesses remain small
                                                                                                                                  1. Owner's choice
                                                                                                                                    1. Market size
                                                                                                                                      1. Access and availability
                                                                                                                                        1. Market domination
                                                                                                                                          1. Reasons for business failure
                                                                                                                                            1. Poor planning
                                                                                                                                              1. Poor cash-flow management
                                                                                                                                                1. Poor management skills
                                                                                                                                                  1. Lack of objectives
                                                                                                                                                    1. Failure to invest in new technologies
                                                                                                                                                      1. Lack of finance
                                                                                                                                                        1. Poor choice of location
                                                                                                                                                          1. Poor marketing
                                                                                                                                                            1. Competition
                                                                                                                                                              1. Economic influences
                                                                                                                                                          2. External growth
                                                                                                                                                2. Public sector
                                                                                                                                                  1. The part of the economy controlled by the state or government
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