A public company is a company that is able to offer its securities (stock, bonds, shares etc.) for sale to, usually through a stock exchange. Usually, the shares of a public company are owned by many investors while the shares of a private company are owned by relatively few shareholders.
They have Limited liability which means the money only comes from the business not personal possessions of the shareholders There will be an increased capital as the public can buy shares in the company. There can be a minimum of 2 directors and 2 shareholders. The shares increase in value if the company successful meaning bigger dividends. Operating large on a scale can lower costs per unit
There are many regulations (rules and laws) to comply with and all Accounts (and problems) are public knowledge so people know if the business is doing badly. The shareholders outside the business may sell shares if dividends poor. The original owner may lose overall control, because it's a big company to be involved with and you would have to work really hard.
Private Limited Company
A Private Limited Company, whose shares are held by the directors and are not public issue, must have limited in the name to show this. Usually a limited company is held within the family, it is guaranteed by its members but it doesn't have a shared capital. Private limited companies tend to be smaller than other companies. The shareholders are usually the directors of the company and have a lot of input.
Shareholders have limited liability this means that more people are willing to put money in than say a partnership. If one owner pulls out or dies, the business will still be run by one of the other shareholders. More capital can be raised as there is no limit on the shareholders. Control of the company cannot be lost to the outsiders because shares can only be sold to new members if all the other shareholders agree.
The profits have to be shared out between a much larger number of members, to set up the business it costs money and there is a legal procedure. As the firm cannot sell shares to the public this means they can't raise as much capital. Financial information filed with the registrar can be looked at by any member of the public; this means competitors can use it to their advantage.
I have chosen to have a partnership as the ownership of "Hayes Days" because I think it's the most appropriate. In the partnership I will be able to share the workload, stress and discuss decisions with someone else's input. If one of us is ill we can cover for one another, also with holidays and other responsibilities. I don't think that their will be many disagreements because we will both have an equal share in the company, and will both be thinking of what benefits the school and students. There can be between 2 and 20 partners which means that there will be loads of different ideas and help with the business, and so the success of the business doesn't rely on one person's abilities. Also a partnership is bigger than a sole trader which means that there's a bigger chance of raising money outside of the business.
All businesses have stakeholders, some more important than others. The stakeholders can be internal or external. In this task I am going to produce a brainstorm of all my stakeholders, and then using subheadings, I will explain how influential and important each stakeholder is to my business. Then I am going to explain which stakeholders are the most important to my business. This is a brainstorm of the stakeholders within my business I am now going to list my Stakeholders in order of importance and how influential they are to my business; I am then going to explain why they are important and how their influence affects the business.
Customers are people who pay for products of services provided by another person or organisation. In order for a business to be successful the customers must be satisfied otherwise the business will fail as they will not be making any profit. I think that customers are the most important and influential stakeholders within an organisation because in order for businesses to survive they need to make a profit or at least break even to start with, and the only way that they can happen is if the business has customers buying their products or services. This means that businesses are dependant on their customers and must keep them happy and maintain a good relationship with them. As one of my objectives is to break even by Christmas, the customers are essential stakeholders for 'Hayes Days'.
Shareholders and Partners
A shareholder is someone who owns shares in a business. Most companies need shareholders because they need a bigger shared capital if they cannot afford to raise it on their own. As my business is a partnership the partner is essential to the company as they provide half the start up costs, make half the decisions and share profit. The partners or shareholders in a business need to have a good relationship with each other because if one decides to leave the business they have to find someone else to buy their share in the business.
Also if there isn't a good relationship between the partners the business will suffer because they won't make decisions together and will argue about how the business is run. They need to be good at working as a team together otherwise there will be too much conflict and some shareholders will want to leave the business. The Partners or shareholders expect to be involved in the businesses decisions and receive a shared profit. Without the partner my ownership would be destroyed and would not be able to run.
The staff/employees or managers are the people who are employed by an organisation to help run the business. The staff can be given all different jobs and positions within the company which they will do in return for a wage. Each position is equally important as the other because a business cannot run without people to provide the service or products. The employee's need to be kept happy and motivated otherwise they wont perform to the best of their ability and are more likely to leave the business which means them having to find new staff and train them. I think that the staff are very important to the business because without people to serve the customers, the business will not make a profit an there for not survive.
The employees need to be motivated, happy and given a chance of showing off their skills in order for them to be confident and happy at work. In Hayes Days I will give employees a chance to improve at work and give them challenges to achieve, this should also motivate them to do the best that they can for the business. The employees want to be respected and earn a decent wage; they also want to be given the chance to move higher up within the business hierarchy.
The suppliers are the people who provide a business with the products or services that they need to sell to customers. The suppliers usually visit a store once a week to deliver stock which is ordered by the business before hand or everyday if the store is selling fresh food. The suppliers have a big influence on the business because without products to sell, there is nothing for customers to buy which means no profit for the business. If the business makes no profit then they cannot survive and will have to close down.
If the business keeps a good relationship with the suppliers then when they order things in bulk the suppliers may give them discounts or lower prices if they order regularly. Also if the suppliers are happy working for the business then they will not let the business down and deliver on time.
As Hayes Days is a smoothie and sandwich shop I will need a regular supplier, a fruit and veg merchant will be the main supplier for my business which also means the prices shouldn't be too high. As my food all needs to be fresh I need a small deliver every morning. The suppliers want the business to keep ordering and giving them regular work, if this happens they have more of a steady income. They expect to be given an order/delivery time a couple of days before it has to be there in order for them to get the products together. They supplier wants the business to recommend them to other businesses, be treated with respect and to be given a decent amount of money for their products.
The Local Community
The local community are the people who live in the area around the business. The local can have a big influence on some businesses because if they make complaints about a business to the local council it can be taken further and the business could be closed down.
Banks have quite a big influence on all businesses because they loan money to a business to either start up their business or whilst the business is running if they are struggling with running costs. A business needs to maintain a good relationship with the bank otherwise they won't loan them money again. If the business doesn't pay back money on time, then the bank will not deal with them in the future and will give them a bad finance record. If a business has a bad finance record it is unlikely that another bank will give them a business loan.
If the bank disappeared my business may not be in a lot of trouble unless I needed a loan which hopefully I will not have to do, however there are plenty of other banks for my business to try and get a loan from. The banks expect you to show them a business plan of how you will afford to pay back the money you owe, if they think the business will be able to then they should receive the loan. The bank also expects a business to pay back the money on time; otherwise they won't want to help the business in the future and will think the business is incapable of surviving.