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Business planning.

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Setting up a business

Business is any commercial activity. There are some types of organizations, such as:

Self-employed (sole propetor, freelancer, sale trader), Public limited company, Non-profit organizations, Big business/Large scale Enterprise, Mutuals, Small/medium enterprise, which divides into Partnerships and Private limited company.

Let’s consider more in detail each of them.

Self-employed is a person, who work for himself, to use the official term, he is sole trader. We usually describe people such as designers and journalist as freelancers and people such as builders and plumbers as self-employed.

Sole owner and sole proprietor is the simplest way of starting business. You are self-employed and entirely responsible for all aspects of the management of your business.

Partnership – there are no shareholders. A lot of professional people work in partnerships. All partners are responsible for the debts of the partnership and profit and loses are shared between them.

Many large businesses in the UK are public limited company (plc), which means that the public can buy their shares on the stock exchange. Examples include Marks & Spencer, National Westminster Bank. The minimum shape capital for a public limited company is 50,000 pounds.

Private Limited Company is a company can be formed with a minimum of 2 people becoming its shareholders. They most appoint a director and a company secretary. If the company goes out of business, the responsibility of each shareholders is limited to the amount that they have contributed; they have limited liability. Such a company has Ltd (Limited) after its name.

In the US business take the same basic forms. However, American companies are registered or incorporated with the authorities in the state where they have their headquarters. The abbreviations Inc and Corp refer to such companies. To sell shares to the public they must apply to the Securities Exchange Commission.

Mutuals

Some companies, like certain life insurance companies, are mutuals, when you buy insurance with the company you member. Profits are theoretically owned by the members, so there are no shareholders.

In Britain another kind of mutual is building societies, which lend money to people who want to buy a house. But a lot of building societies have demutualized; they have become public limited companies with shareholders. This process is demutualization.

Non-profit organizations are organizations with social aims such as helping those who are sick or poor, or encouraging artistic activity. They are also called charities, and form the voluntary sector, as they relay heavily on volunteers (unpaid workers). They are usually managed by paid professionals, and they put a lot of effort into fund-racing, getting people to donate money to the organization in the form of donations.

Business planning.

Setting up a successful business requires careful preparation and planning, but also involves a degree of risk-taking.

There are documents that show how the entrepreneur will organize his or her business, how much he or she aspects to sell and where the capital will came from.

There are a number of questions that all entrepreneurs must ask themselves concerning, what products or services that she/he intends to sell, the competitions, that he/she will face, the structure of the businesses itself.

Once this information has been put down on paper, the entrepreneur can then choose an appropriate form for the company register it with authorities and open for business.

A business plan can be written down in different ways depending on the country but generally the items of a business plan are common for any country. And they are:

1) Details of the business

Name of business

Type of business (limited, parthership, etc.)

2) Personal details

Relevant work experience

3) Personnel

Number of people/job function

4) Product/service

Description

5) Market

Describe your market.

Who are your customers?

Is your market growing, static or decline?

Who are the main competitors?

What are the advantages of your product or service over the competition?

6) Marketing

What sort of marketing or advertising do you intend to do?

7) Premises/machinery/vehicles

Where do you intend to locate the business and why?

What sort and size of premises will you need?

What machinery/vehicles do you require?

9) Objectives

What objectives do you have for the business?


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