大象传媒

How small businesses operateTypes of business

There are many reasons why an individual sets up in business. For a business to be successful that person will need appropriate skills and qualities along with suitable advice and finance.

Part of BusinessBusiness in action

Types of business

Sole trader. partnership and non-profit organisation

Sole trader

A sole trader is a business owned by one person. Examples of sole traders are hairdressers, butchers, and electricians.

Sole traders can only raise limited finance. They will receive the money from family and friends or their own savings, or they might be able to get a bank loan, if the bank likes the sole trader鈥檚 business plan.

AdvantagesDisadvantages
Keeps all the profits they makeTakes on all the risk of starting the business
Can run the business as they see fitIs personally responsible for any losses and debts
Makes all the key decisions themselvesCan only raise limited finance
Takes on all responsibility and workload
AdvantagesKeeps all the profits they make
DisadvantagesTakes on all the risk of starting the business
AdvantagesCan run the business as they see fit
DisadvantagesIs personally responsible for any losses and debts
AdvantagesMakes all the key decisions themselves
DisadvantagesCan only raise limited finance
Advantages
DisadvantagesTakes on all responsibility and workload

Partnership

A partnership is a business set up by more than one individual. Partnerships can have 2-20 partners. Examples of partnerships include estate agents, doctor and dental practices, and lawyers.

AdvantagesDisadvantages
Different partners can bring different skills to the businessPartners may disagree about the future direction of the business
Workload and responsibility is sharedProfits must be shared between 2-20 people
More partners means a partnership can raise more money than a sole traderPartners are personally responsible for any losses and debts
AdvantagesDifferent partners can bring different skills to the business
DisadvantagesPartners may disagree about the future direction of the business
AdvantagesWorkload and responsibility is shared
DisadvantagesProfits must be shared between 2-20 people
AdvantagesMore partners means a partnership can raise more money than a sole trader
DisadvantagesPartners are personally responsible for any losses and debts

Non-profit making organisations

Not all businesses are about making a profit - some aim to make a difference or provide a service. These can include charities and community groups.

A charity shop
Image caption,
All money raised in charity shops must go into helping a specific cause.

A charity is an organisations set up for a specific cause. Charities receive money from donations and sales in charity shops. All money goes to help the specific cause.

Examples of charities include Oxfam, Save the Children and Cancer Research UK.

Community organisations exist to provide a service for people. All of the profit goes back into the organisation. Examples of community organisations include rugby or golf clubs.