How A Successful Business Is Business

1482 Words6 Pages
A successful business is business that has good entrepreneurial skills which enables them to unite production to the complex matters of demand. It also encourages them to improve on what they produce such as the quality and how they produce the product to meet the demand in the future. For example Apple, not only did they improve on the software they use but also the quality of the phone. However a firm lacking in entrepreneurship skills would risk being forgotten if they fail to make the right assumption of the market conditions and also produce goods and services where there is less demand. Firms are distinguished by their form of ownership. There are three types of businesses; sole trader, partnership and limited companies (public and…show more content…
There are two types of limited companies, private and public. A private limited company is fairly small and profits are taken by the shareholders, as for a public limited company profits are also taken by shareholders however they are larger. The current recession in the UK has improved however banks will still be reluctant to lend loans to small businesses such as a sole trader, as profits are made in the long term due to high start up costs. Products in the sole trader business are homogenous; this means they are competing in a very competitive market therefore the business needs to find a geographical location that has high demand for their products which will in turn increase their chance of survival. Even if sole traders are successful with the loans, owners have to stake their house and private assets. However for a limited company (public or private), loans are given out more leniently as profits are gained more quickly as they have more ways of raising finance such as sell shares. However for private limited companies there is a restriction on the raising of capital via sales of shares, Public limited Companies can gain further funding by the sales of shares, but this ability is lost to private limited companies whose shares are restricted. Similar to a limited company where there are numerous shareholders, partnerships are able to put more money into the business which will allow better flexibility and more
Get Access