Setting up a Small Business
Primary sector – The primary sector is part of the economy where businesses grow, collect, mine or cut down raw materials. (Raw materials are needed to make other goods and services – wheat, pork, fish, timber, coal oil and gas) Secondary sector (the manufacturing sector) – The Secondary Sector is that part of the economy where businesses take the raw materials produced in the Primary Sector and transform them into goods. (Goods are physical products that can be seen and touched) Examples: chairs are made from wood or plastic, building houses, roads, food are process in factories.
Tertiary Sector (the Service Sector) – The Tertiary Sector is that part of the economy where businesses produce services. (Services are non-physical products that cannot be touched or stored like a haircut or a train journey) E. g. retail, transport, haircut, teaching, restaurants etc My Business My business is in the Tertiary sector because we will sell goods that can be touched like selling medicines, shampoo’s, hair accesories, baby needs (e. g. Nappies, Bottles, and Dummies) and selling is a service. Also we will be giving advice and information which is a service.
We are not in the Primary sector we will not be dealing (growing, collecting, mining, or cutting down) with any raw materials. We are not in the Secondary sector because we will not be making our own goods in factories we will be buying our goods from wholesales. Factors of Production Factors of production are the resources of LAND, LABOUR, CAPITAL and ENTERPRISE used to produce goods and services. Land refers to physical land and other natural resources, e. g. the land that a building is constructed on, oil that is extracted from under the sea, under the land, forests, and fish reserves.
Providers of land receive rent. Labour refers to physical and mental effort – e. g. stacking shelves in a supermarket, or calculating the final accounts of a company. Providers of labour receive wages. Capital exists at two levels. First of all we have financial capital. But more importantly, this is used to purchase physical capital that goes into making other things. Physical capital consists of machinery, equipment, tools, etc. Providers of capital receive interest. Enterprise is the skill of combining the other factors of production. Entrepreneurs receive profit.
Entrepreneurs are the risk takers that set up and run business enterprises. My business Land: My business is going to be situated in a shop on High Road, Leyton. Labour: There will be many workers in my shop, including a worker stacking shelves, someone working at tills, someone getting prescription medicine from the storage cupboard to give to customers, someone calculating the accounts, and some cleaners. Capital: We have a loan of i?? 5000 to start up our business. We will use this to buy machinery (e. g. tills), furniture (e. g. counters, shelves, ect… ).
Enterprise: We will have to take a risk to start our business because people may not come to our pharmacy. We will promote our business with posters and advertisements to try and get as much profit as possible. A1. My business falls into three markets. The first one is consumer non-durable because we will sell shampoos, hair creams, hair dye, medicine, tablets, sweets, chewing gum, make-up… These products do not last long that’s why they fall into this market.
The second market is consumer durable because we will sell products like hair accessories; manicure sets (nail clippers… )… these products are long lasting because you can use them again and again until they deteriorate from use or age. The third market falls into services because we will give advice on health problems (e. g. fitness, disease advice, overweight advice … ) advice goes into this market because giving advice to people is a service. Q2. Why doesn’t my business fall into other markets? A2. My business does not fall into industrial/ organisational market because I will not be selling products/goods to other businesses or assisting other businesses. Q3. In future if you expand your business what market will it fall in to?
A3. In future when we expand our business our business will go into the industrial/organisational market because we will start to sell batches of products to other companies. We will mostly sell medicines to other companies that are in the pharmacy business. Business ownership Sole Trader: A business organization that is unincorporated and has only one owner. Partnership: A legal contract entered into by two or more persons in which each agrees to furnish a part of the capital and labour for a business enterprise, and by which each shares a fixed proportion of profits and losses.
Private Ltd Company (Ltd): A firm usually associated with British registration that is organized in such a way as to give its owners limited liability. Public Limited Company (PLC): A type of limited company whose shares may be offered for sale to the public. Franchise: A type of license that a party (franchisee) acquires to allow them to have access to a business’s (the franchisor) proprietary knowledge, processes and trademarks in order to allow the party to sell a product or provide a service under the business’s name.
My business will be in the sole trader ownership, because I will be opening a small pharmacy on Leyton High Road with only me as the owner which means I only have the choice of being a sole trader. Another reason I am a sole trader is because it will be cheap for me to start up my business. Also I think it will be nice for me to be my own boss. I think that you would have to be wise to run your own business. I also think you need to be good at maths to work out prices, profit, losses, ect.
Another quality you will need it to have basic common sense and to know your stuff about business and the risks. You will also need to be good at persuading people to buy your products. You will need to have basic knowledge on medicine and science. I will be successful because I have all of the stated knowledge above plus I have the knowledge of a doctor so I can help customers with health problems. This will make me a successful business man. I will also be successful because I have good communication skills and good skills which are needed for a basic business.