Category: Business Studies

Sole trader One person provides the permanent finance and in return, has full control of the business and is able to keep all of the profits. Advantages No legal formalities, easy to set up Complete control Keeps all the profits Chooses time and pattern of work Close relation with the employees Privacy Business is based…

Private sector Businesses owned and controlled by individuals or groups. These goods are provided in the consumer markets.

Public sector These are the organizations and firms owned and controlled by central/local government. Mostly important goods and services are provided by the state. Eg. Education, defence, public law and order

Changes in business activity The importance of each sector in an economy changes overtime. Industrialization is the growing importance of secondary sector manufacturing industries in developing countries Benefits Increase in GDP and higher standadrd of living Increase in outputs, more exports and less imports Expansion of manufacturing business means more jobs Expanding and profitable firms…

Three sectors of business Primary sector They are directly to the natural resources. They are engaged in farming, fishing, oil extraction, mining. Secondary sector Those firms that manufacture and process products from natural resources, eg constructions, clothes making, manufacturer of consumer and industrial goods, rice mills Tertiary sector Firms that provide services to consumers and…

Capital goods These are physical goods that are used by industry to aid in production and other goods and services. Eg machines and commercial vehicles.

Consumer services These are non tangible products sold to general public. They include hotel accommodation, insurance and services, teaching

Consumer goods These are the physical and tangible goods sold to the general public. Durable: cars, washing machines. Non durable: food, drinks

Factors of production Land: All the renewable and non-renewable resources of nature. Eg coal, crude oil, timber Labor: Manual and skilled labor which make up the workforce of the business. Capital: Finance needed to set up a business and pay for its continuous operations. All man-made resources used in production eg computers, machines, factories, offices,…

Business activity Business activity is the transformation of resources into products to satisfy the needs and wants of customers. Business activity is carried out: to earn a return on capital available to investors, to specialize in the commodity to make it more profitable, to get money to purchase goods and services, most importantly to get…