Today we are going to learn more about

Today we are going to learn more about : - activities n The aims and objectives of businesses in the public, private and voluntary sectors.

Learning Objectives By the end of today’s lesson you: n n n MUST be able to explain what business aims and objectives mean and are. . . . SHOULD be able to categorise key differences in aims and objects by business sector COULD be able to apply this to a selected organisation and evaluate the outcome

Types of activity All businesses undertake one or more activities: They produce goods, e. g. Ford, Hugo Boss n They supply goods, e. g. B & Q, River Island n They provide a service, e. g. ITV, NSPCC, a hospital OR n They provide goods and services, e. g. Boots, Tesco n The most profitable activity is often known as the core business activity

Goals and aims All businesses have goals or aims, for instance: n n To make a profit To supply essential goods and services free of charge To supply goods and services as cheaply as possible To improve the performance of the business. The difference often depends on the SECTOR the business is in.

Business sectors There are three main sectors: Private sector Public sector Voluntary/not for profit sector Owned by private individuals, e. g. local newsagent, accountant, Next, Argos, Ford Owned by the government, e. g. Job Centres, NHS, BBC Includes charitable and voluntary organisations, e. g. Greenpeace, Oxfam, Citizens Advice Bureaux

Sectors and goals Goals VARY depending upon the business sector. Private sector Public sector Aim to make a Aim to provide a profit. Must do this range of services to survive. either free or below cost All businesses aim to improve their business performance. Voluntary/not for profit sector Aim to raise money and to provide free goods and services to those in need.

Understanding profit Sales revenue greater than costs = profit Sales revenue less than costs = loss Calculation: Revenue from sales minus cost of production & supply Revenue £ 10, 000 – costs £ 2, 000 = profit £ 8, 000 Revenue £ 10, 000 – costs £ 12, 000 = loss £ 2, 000

Deciding the main aim – the private sector The selling price must enable a profit to be made. Therefore the price must: n n Cover ALL the costs of running the business Be competitive, otherwise stock will remain unsold. In a sale, the price is reduced to sell off unsold stock. The goods may be sold at less than cost price to get rid of them. SALE

The Public Sector n n n Made up of central government, local government, and businesses that are owned by government In the last twenty years the number of government-owned firms in the UK has shrunk massively Now, very few examples remain: for instance, the Royal Mail

Deciding the main aim – the public sector The state provides socially desirable services. It raises the money through taxation. Goods and services may be supplied: n n n Free of charge e. g. emergency services, charitable services, state education At or below cost price, e. g. NHS prescriptions and dental care, higher education To a certain level, e. g. government benefits.

Not For Profit Businesses n n Many charity-based business organisations are run as ‘not for profit’ operations They typically receive donations or funds from groups or government Any financial surplus is ploughed back into the business The organisation does not aim to generate profits

Deciding the main aim – the voluntary sector n n n Money is raised through donations, grants and campaigns Income minus cost of running business = surplus to spend on main activity. Services are provided free (or below cost) to those in need.

The Private Sector n n Private individuals and firms that are owned by private individuals Firms in the private sector include: Sole Traders n Private Limited Companies (Ltd) n Partnerships n Public Limited Companies (PLC) n

Improving business performance the private sector Business may decide to improve by: n n n Increasing sales revenue Reducing costs Increasing customer/client satisfaction. Result = increased profit or surplus higher

Improving business performance – the voluntary sector May decide to improve by: n Increasing income n Reducing costs n Using surplus more effectively.

Improving business performance – the public sector Goals depend upon organisation, for example: n n Police = reduce crime Education = improve exam results Health care = save more lives Local authority = improve local services. All aim to get best value for money spent.

Other Business Types n n n Co-operatives are owned by their staff, who are ‘members’ of the firm Profits are shared amongst the members Losses too must be shared

Franchises n n Many businesses today are franchises A business idea is licensed to a franchisee The owners of the brand receive a license fee The franchisee gains the right to use the business brand

Size of business organisations DTI* classifications: n Micro = under 9 employees n Small = under 50 employees n Medium = under 250 employees n Large = over 250 employees. Other guides = sales revenue, profit and scale of operation. * Department of Trade and Industry

Scale of operation Scale = the area over which goods/services are provided. n Local – in one town or district n Regional – in one county or area n National – in one country n European – in one continent n Global – worldwide

Factors influencing scale Existing size of business Type of product of service Owner’s ambitions Size of market Factors influencing scale Competition Cost of operating over a wider area Existing skills and knowledge Cost of expansion

In summary Business goals will depend upon: n Type of activities carried out n Which sector the business is in n Size of organisation n Scale of organisation n Current performance and future ambitions. In the private sector a key goal is always profit

Activity Find. . . On the web. . Mission Statement/Aims/Objectives/Goals of the following organisations; - Produce by organisation a brief on each - Word document