A business is an organised effort or enterprise where individuals or groups of people work together to produce goods, offer services, or provide solutions to meet the needs and wants of customers. The fundamental purpose of a business is to make a profit, which means it aims to earn more money from its activities than it spends on operating costs.

Businesses come in various shapes and sizes, ranging from small neighborhood stores to large multinational corporations. They can operate in diverse industries, such as technology, healthcare, retail, and manufacturing, offering a wide array of products and services.

Key Parts of a Business:

• Products or Services: Businesses offer something that people want or need. It could be physical stuff like toys or clothes, or it could be services like haircuts or computer repairs.

• Customers: These are the people who buy what the business is selling. Customers can be individuals or other businesses.

• Money: Every business needs money to start, run, and grow. They get money from customers who pay for their products or services. They also spend money on things like rent, employees, and materials.

• Employees: Businesses usually have people who work for them. These employees help make the products, provide the services, and run the business.

• Owners: Someone or a group of people own and run the business. They make decisions about what the business should do and how it should operate.

• Competition: Many businesses offer similar products or services. They compete with each other to attract customers. This competition can be a good thing because it can lead to better products and lower prices for customers.

Goals of a Business:

• Make Money: The main goal of most businesses is to make a profit, which means they earn more money from selling things than they spend on running the business.

• Grow and Expand: Many businesses want to get bigger over time. They might open more stores, serve more customers, or offer new products and services.

• Provide Value: Successful businesses focus on making customers happy by providing products or services that are valuable and meet their needs.

Successful businesses focus on delivering value to their customers, managing their finances efficiently, adapting to changing market conditions, and making strategic decisions to achieve their goals. Whether you're an entrepreneur starting your own business or an employee contributing to an existing one, understanding the basics of business can be essential in today's interconnected and dynamic global economy 

Choosing how a business should be legally set up is really important for how it works. This legal structure decides things like who gets money when the business does well or fails, how taxes are handled, and who's responsible if something goes wrong. It also affects how the business deals with partners, investors, creditors, and workers.

There are three main ways a business can be legally structured:

Private, Public and Not for Profit.

Most companies are "private limited liability companies" in the UK. This means they're not responsible for all the company's debts, just their investment.

The government keeps track of all this business information through the "Office of the Registrar of Companies." They make sure companies follow the rules and they keep a record of all UK companies and their details, like who owns them and how they're doing financially. This info is available to the public for a small fee.

A private company is a business that is owned by a small group of people, and its shares are not traded on the stock market. It's often not as big as those huge companies you see on TV. The people who own it usually know each other well. Private businesses are likely to take many risks as they aim to make a profit. Some common examples include:

• Virgin

• Toys "R" Us

• Mars Tesco

Example:

Imagine you and a few friends love making cool gadgets. You decide to start a company called "Tech Innovators." You each put in some money to get things going, and you're the only ones who own shares in the company. Since the company isn't listed on the stock market, only you and your friends can buy or sell shares among yourselves.

In your private company, you can make decisions together without needing to ask lots of other people. You have more control over what happens in the business because it's not open to the public like big companies you might see on the news.

Sole Trader: Imagine you decide to start a small business making and selling handmade jewelry. As a sole trader, you're the boss and you own all the profits, but you're also responsible for any debts your business might have. It's like being in charge of everything.

Partnership: Let's say you and your friend want to open a cafe together. You both put in money and work to make it happen. That's a partnership. You share the profits and the responsibilities. If the café does well, you both benefit. But if something goes wrong, you both share the problem too.

Private Limited Company: Now, imagine your café becomes really popular and you want to expand. You decide to turn it into a private limited company. This means the company is its own "person." You and other people can own shares in the company, and you're only responsible for the company's debts up to the amount you've invested. If the café owes money, your personal things are safe.

Public Limited Company (PLC): Let's say your café chain grows even more, and you want to raise more money by selling shares to the public. You turn your company into a public limited company (PLC). Now anyone can buy shares and be a part-owner. But your personal responsibility for the company's debts is still limited to what you've invested.

Cooperative: Imagine a group of farmers decide to work together to sell their products. They form a cooperative. In a cooperative, everyone has a say in decisions and shares in the profits based on how much they've contributed. It's like teamwork in running a business.

Limited Liability: If your cafe, as a private limited company, faces a big debt it can't pay, your personal property isn't at risk. Your responsibility is "limited" to the amount you've invested in the company. So, your personal savings and belongings are safe.

Unlimited Liability: Now, if you and your friend run a business as partners and it gets into trouble, you both are responsible for all the debts, even beyond what you put in. This is called "unlimited liability." It means your personal property might be used to pay off the business's debts if things go wrong.

Remember, these different types of businesses have their own pros and cons, and you'll need to choose the one that fits your goals and how much risk you're comfortable with.

This is a business that is run by the government to provide services to the public. Imagine a library or a post office. These are examples of public businesses. The government makes sure these places are available to everyone and they're not trying to make a profit. The government is then liable for the success or failure of the business; they are less likely to take risks as they aim to benefit the public. Schools and hospitals are good examples although not all schools or hospitals  are public.

Schools and hospitals can be both public and private institutions, depending on their ownership and funding sources. Here's a breakdown:

1. Public Schools and Public Hospitals:

• Public Schools: Public schools are funded and operated by the government, typically at the local or national level. They are considered public institutions because they are owned and run by the government to provide education to the general public. Public schools are financed through taxpayer funds and are usually accessible to residents within a specific geographic area. Examples in the UK include state-funded primary and secondary schools.

• Public Hospitals: Public hospitals are also government-funded and operated healthcare facilities. They provide medical services to the public and are often funded through taxation or government budgets. Examples in the UK include NHS (National Health Service) hospitals, which are publicly funded and provide healthcare services to residents.

2. Private Schools and Private Hospitals:

• Private Schools: Private schools are owned and operated by private entities, individuals, or organisations. They are not funded by the government and often charge tuition fees. Parents or guardians pay for their children to attend private schools, and these institutions have more autonomy in their operations. Examples in the UK include independent or fee-paying schools.

• Private Hospitals: Private hospitals are privately owned and operated healthcare facilities. Patients typically pay for services directly or through private health insurance. Private hospitals often offer additional services and amenities compared to public hospitals. Examples in the UK include private hospitals run by companies like Bupa or Nuffield Health.

So, whether a school or hospital is considered a public or private business depends on who owns and funds it. Public schools and hospitals are primarily government-funded and serve the general public, while private schools and hospitals are owned by private entities and operate with a different funding model.

Not-for-profit Business: These are businesses that don't aim to make money for themselves. Instead, they use any money they make to help others or a specific cause. A charitable trust is a good example. It collects donations and uses that money to help people in need, like providing food to the hungry or giving shelter to the homeless.

Voluntary Organisation: This is a group of people who come together to help their community. They don't try to make money. Instead, they work on things that matter to them and the people around them. For example, a group of volunteers might clean up a park, run a free tutoring program, or organise events to raise money for a local cause.

These types of businesses focus on different things. Public businesses aim to provide services to everyone. Not-for-profit businesses aim to do good for others, and voluntary organisations work together to make positive changes in their community

The main purpose of many businesses is to provide things that people need or want. Some businesses make and sell products like phones, clothes, or food. Others provide services like haircuts, repairs, or online streaming. Businesses exist to give people what they need in exchange for money. Some might even do a combination of the both.

Example 1 (Product): A company that makes and sells bicycles.

Example 2 (Service): A salon that offers haircuts and styling.

For-Profit Businesses: These are businesses that aim to make money for their owners or shareholders. They want to earn more money than they spend on running the business. Any profits left over after paying expenses can be shared among the owners or reinvested in the business to help it grow.

Example: A clothing store that sells fashionable clothes to customers and uses the money it earns to pay employees, rent, and other costs. Whatever's left over after expenses is the store's profit.

Not-for-Profit Businesses: These are businesses that focus on doing good for others or a cause. They don't try to make a profit for themselves. Instead, any money they make goes toward their mission, like helping people in need or supporting a charitable goal.

Example: An animal shelter that takes care of homeless pets. It collects donations from people who want to help animals and uses that money to provide food, shelter, and medical care to the animals.

So, the main difference between for-profit and not-for-profit businesses is their goal. For-profit businesses aim to make money, while not-for-profit businesses aim to make a positive impact on people, communities, or causes they care about.

Primary Sector: This sector involves getting things directly from nature. For example, farmers grow fruits and vegetables, loggers cut down trees for wood, and miners dig for metals like gold and iron. This involves sourcing the raw materials which will be turned into goods within the secondary sector.

Secondary Sector: In this sector, raw materials from the primary sector are turned into finished products. For instance, a factory takes raw cotton and turns it into clothes, or steel is used to build cars.

Tertiary Sector: This sector focuses on providing services to people. Doctors, nurses, and hospitals provide healthcare services. Restaurants and cafes serve food and beverages. Teachers offer education services by sharing knowledge with students. The businesses which store and distribute the manufactured goods are also part of the tertiary sector. Insurance companies and advertising specialists are other examples of services offered within the tertiary sector. Travel and tourism, entertainment, education and training and transport are common examples.

Quaternary Sector: This sector is about knowledge-based work. Scientists researching new medicines, software engineers creating computer programs, and business consultants offering advice on improving companies are all part of the quaternary sector. This sector also provide support and can appear to overlap with the tertiary sector. Examples include the communications infrastructure for day-to-day operations, such as telephoning and emailing.  Research and development based on data from the other three sectors is a key part of this sector.

Each of these sectors plays a role in our economy by contributing in different ways, whether it's producing goods, offering services, or advancing knowledge.

The scope of a business determines how wide its reach is and how many people it serves. Different scopes come with different challenges and opportunities, depending on the size of the customer base and the geographic locations involved.

Local Business Scope: This refers to businesses that operate within a specific town or city. They serve the local community's needs and usually have a smaller customer base. 

Example: A local bakery that sells freshly baked bread and pastries to people living in the nearby area.

National Business Scope: These businesses operate within a single country. They cater to a larger population and may have multiple locations across the country. Some could appear to be local but they may be a franchise such as McDonald's, Costa Coffee or Subway. Franchise's are when the owner of an established business format(the franchiser) grants to another person (the franchisee) the right to distribute products or perform services using that system and a fee is paid to the franchiser according to the terms of  their agreement.

Example: A national chain of supermarkets that has branches in different cities of the same country.

Regional Business Scope: Regional businesses cover a broader area than local businesses but are still limited to a particular region or part of a country.

Example: A regional airline that provides flights between cities within a specific geographical region.

International Business Scope: These businesses have a presence in multiple countries and operate on a global scale. They often face challenges related to different cultures, laws, and markets. Their business transactions may take place across national borders. The internet has allowed many previously local businesses to sell their goods or services internationally.

Example: A multinational technology company that designs, manufactures, and sells its products in countries all over the world.

Global Business Scope: Global businesses have a truly worldwide presence and operate in multiple countries across continents. They have a vast customer base and often adapt their strategies to fit diverse markets.

Example: A global fast-food chain that serves its standardised menu in numerous countries, adjusting flavours and offerings to suit local tastes.

Micro Business: A micro business is the smallest type, with very few employees. It's usually operated by just a handful of people up to a maximum of 9.

Example: A neighborhood coffee shop with 3 baristas and a manager.

Small and Medium Enterprises (SMEs): This includes both small and medium-sized businesses. They're a bit bigger than micro businesses but still not huge usually between 10 and 49 employees.

Small Business: A small business has more employees than a micro business, but it's still on the smaller side.

Example: A local printing company with 15 employees producing flyers and posters.

Medium Business: Medium-sized businesses are larger than small businesses but not as big as large corporations. They have more staff and usually more resources. These usually have somewhere in the range of 50-249 employees.

Example: A software development company with 80 employees working on creating and improving software products.

Large Business: Large businesses are quite big, with a lot of employees and often operating in multiple locations. These have more than 250 employees.

Example: An international hotel chain with over 500 employees across its various hotels and offices.

Remember, the size of a business is often measured by the number of employees it has. Smaller businesses tend to have fewer staff and cater to specific markets, while larger businesses can have a wider reach and more resources

Success in a business happens for various reasons. These factors can be different depending on the type of business, whether it's focused on making a profit or on doing good for others, and the goals it's trying to achieve.

Profit Seeking Business:

Businesses seeking to make a profit are motivated by various reasons:

• Pay bills

• Buy nice house/car

• Holidays

As businesses get larger they generate more responsibility. They might employ additional staff, pay for premises and develop products or services to expand on it's market share so the business can continue to grow. Managing the profits becomes more complex and specialised.

Just because as business grows doesn't mean it becomes more profitable. Costs might increase alongside interest rates on loans to finance the growth.

Non-Profit  Seeking Business:

The primary goal of these businesses is not to make substantial profits but enough to continue the business. Therefore they also need to keep a close eye on their finances to ensure that what they spend does not exceed the income they receive, known as revenue (The income received by a business for selling its products and services.

Revenue can be raised through bids for funding or grants alongside other fund raising activities. Examples Include:

• Donations for the Royal National Lifeboat Institution (RNLI)

• Lottery funding for causes such as sports and the arts

• Cultural heritage groups, such as those celebrating the 70th anniversary of the end of the second World War.

Aims and Objectives:

Every business needs aims and objectives, although these may be less formal in small businesses every business must have a purpose and outcome.

Clarity of Vision: A clear vision helps guide a business toward its goals. This means knowing what you want to achieve and how you're going to get there. For-profit and non-profit businesses benefit from having a strong sense of purpose.

Example: An eco-friendly clothing company that aims to make sustainable fashion accessible to everyone. This clear vision attracts environmentally-conscious customers and employees who share the same values.

Innovative Products or Processes: Businesses that come up with new and creative products or ways of doing things can stand out in the market. This can lead to more customers and growth.

Example: A tech startup that develops a smartphone app for language learning with unique features that make it more engaging than other language apps.

Meeting Customer Needs: Understanding what customers want and delivering it effectively can lead to success. This applies to both for-profit and non-profit businesses.

Example: A non-profit organisation focused on children's education that listens to the needs of the community and offers tailored after-school programs that parents appreciate.

Effective Management: Good leadership and management help keep things organised, motivate employees, and make smart decisions.

Example: A small profit-oriented bakery that's successful due to the owner's excellent management skills in keeping costs low, quality high, and staff motivated.

Adapting to Change: Businesses that can quickly adjust to new trends, technologies, or market shifts have a better chance of staying successful.

Example: A bookstore that used to sell only physical books but shifted to selling e-books and audiobooks when digital reading became popular.

Community Engagement: Businesses that connect well with their communities and build strong relationships can earn loyalty and support.

Example: A non-profit animal shelter that engages with the local community through events, workshops, and adoption drives, fostering trust and donations.

Effective Marketing: Getting the word out about your business is crucial. Effective marketing strategies can attract customers or supporters.

Example: A profit-oriented cosmetics brand that uses social media influencers to showcase its products, reaching a wide audience and boosting sales.

Financial Management: Properly handling finances and making wise investments can keep a business stable and growing.

Example: A medium-sized software company that successfully manages its finances, allowing it to invest in research and development for new products.

In the end, whether a business is profit-oriented or not, the reasons for its success can vary, but a combination of vision, innovation, customer focus, effective management, adaptability, community engagement, marketing, and sound financial practices often contribute to achieving its goals.

Comparing Business Types in the UK

Private Company: Tesco (Private Limited Company - Ltd.)

Background: Tesco is a leading UK-based supermarket chain.

Ownership: Tesco is a private limited company, and its shares are owned by private investors.

Objective: The primary aim of Tesco is to make a profit by selling groceries and other products to the public.

Ownership Control: Tesco's ownership is controlled by its shareholders and its board of directors.

Funding: Tesco generates revenue primarily from customer purchases and private investments.

Profit Distribution: Profits are distributed to shareholders as dividends, and the company reinvests some for growth.

Competition: Tesco competes with other private supermarkets like Sainsbury's and Asda.

Public Company: National Health Service (NHS) (Public Sector Organisation)

Background: The NHS is the UK's publicly funded healthcare system.

Ownership: The NHS is publicly owned and funded by the UK government through taxation.

Objective: The primary aim of the NHS is to provide healthcare services to all UK residents, regardless of their ability to pay.

Ownership Control: It is controlled and funded by the UK government, with oversight by the Department of Health and Social Care.

Funding: The NHS is funded primarily through tax revenue and government allocations.

Profit Distribution: The NHS does not distribute profits; instead, it reinvests funds to improve healthcare services.

Competition: While there is some private involvement in healthcare, the NHS remains the dominant healthcare provider in the UK.

Not-for-Profit Organisation: British Red Cross (Charity)

Background: The British Red Cross is a charitable organisation in the UK.

Ownership: It operates as a not-for-profit charity with no private ownership.

Objective: The primary aim of the British Red Cross is to provide humanitarian aid and support to people in need during crises and emergencies.

Ownership Control: The organisation is governed by a board of trustees and operates under charity laws.

Funding: The British Red Cross relies on donations from the public, government grants, and fundraising efforts.

Profit Distribution: Any surplus funds are reinvested to further the organisation's charitable mission.

Competition: While it collaborates with other charities and organisations, the British Red Cross does not compete for profit.

In this case study, we've compared three different types of organisations in the UK: a private company (Tesco), a public sector organisation (NHS), and a not-for-profit charity (British Red Cross). Each organisation has distinct ownership structures, objectives, funding sources, and purposes, highlighting the differences between private, public, and not-for-profit entities.