Types of Businesses Quiz

Types of Businesses

• Sole Trader: Owned and run by one person, with full control and simple setup. Has unlimited liability, meaning personal assets are at risk if the business fails.

• Partnership: Owned by two to twenty people, easy to set up but also has unlimited liability (personal assets at risk). Shared control and management, profits are shared.

• Private Limited Company: Incorporated business owned by shareholders. Shares are not publicly traded on the stock exchange. Has limited liability (protects personal assets), but is more complex to set up compared to a sole trader. Has a limit on the number of shareholders (typically 50).

• Public Listed Company: Shares are traded publicly on the stock exchange. Owned by multiple shareholders, but with limited liability protecting personal assets. Complex to set up.

• Social Enterprise: Profit-making business aiming to improve a social or community cause. Profits are reinvested into social causes (e.g., ThankYou). Depends on government grants/donations.

• Government Business Enterprise (GBE): Owned by the government, operating commercially to carry out government policies and make a profit. E.g., Australia Post. Controlled by a board of directors and government ministers.

Business Objectives

• Profit: Remaining income after all costs are deducted.

• Market Share: Percentage of total sales within an industry. Higher market share indicates greater competitiveness. It can be increased through lower costs, higher quality, better reputation, and more advertising.

Stakeholder Interests

• Owners: Interested in financial success and reputation. Involved in decision-making and business growth.

• Managers: Concerned with job security, financial success, and reputation. Responsible for daily operations.

• Employees: Interested in job security, pay, career development, and fair treatment.

• Customers: Interested in quality, price, and meeting needs.

• Suppliers: Interested in financial success of the business & associated positive reputation. They provide resources.

• Community: Business's effect on local environment, by ethical and sustainable practices.

Management Styles

• Autocratic: Leader dictates objectives and how to achieve them. Centralized decision-making, quick decisions, potentially reducing employee input.

• Persuasive: Manager makes decisions but tries to convince employees. Centralized decision-making, used for tasks where employees may lack conviction.

• Consultative: Manager seeks feedback before decisions. Two-way communication. Good when there is time and employees have experience.

• Participative: Shared decision-making among the manager and employees, with good for complex tasks needing input and motivation.

• Laissez-faire: Manager gives employees full operational responsibility. Decentralized decision-making. Best for high-skilled, motivated employees.

Management Skills

• Communication: The transfer of information between people.

• Delegation: Giving tasks to employees; develops employee skills & frees up manager's time.

• Planning: Setting objectives and strategies for achievement.

• Leadership: Motivating and inspiring employees to achieve goals. Building trust and a positive environment.

• Decision-making: Choosing the best course of action, considering facts, pros & cons.

• Interpersonal Skills: Building positive relationships with others.

Corporate Culture

• Official Culture: The values and beliefs that a business wants to project outwardly. Shown in mission statements, slogans, & policies.

• Real Culture: Actual values and behaviours demonstrated by employees. How employees interact with each other/managers. It should ideally align with the official culture, but this isn't always the case.