Unit 1 The Business Environment
P1: Describe the type of business, purpose and ownership of two contrasting businesses
Revlon Colorstay Foundation
The product I have chosen is Revlon Colorstay Foundation. Foundation is a skin colored cosmetic to cover imperfections and create an even complexion. There are many different types of foundation such as liquid, powder, tinted moisturizer, oil based, sheer, matte or mousse. The colour of the foundation can vary from brand to brand, if you were to buy a medium beige from another brand it could be completely different in colour compared to the one from Revlon. Foundations can give different amount of coverage varying from sheer which is the most transparent to full coverage which can cover up scars, hyperpigmentation and birthmarks.
Foundations can be found with lots of different formulas such as oil based shakers, alcohol based, powder based, mineral makeup based, water based, water based oil free and silicone based.
Foundation can be applied through various application tools such as your fingers which creates a natural look, sponge gives a medium cover, a brush and airbrush gives a full coverage.
Task 2 Ownership task:
1) Sole Trader is a business owned and controlled by one person. It is the most common type of business and therefore found in variety of activities as it is very quick and easy to setup.
The Advantage of being a Sole Trader:
- The owner has full control of the business so decisions can be made quickly, as they do not need to consult anyone and more work can be done. - The owner can keep all the money they make as there are no other staff they need to pay. - They are generally closer to the customers and can offer a more personalized service which can help improve customer service. - Sole trader does not have to release their financial statements unlike Limited companies, who have to file their statements at the company house which means its public and their competitors have access to this information which is a disadvantage as the competitors can use this information to their advantage.
The Disadvantage of being a Sole Trader:
- The owner has to overwork as there are no other staffs. Large corporations can delegate the tasks to workers so the job can be finished faster but a sole trader cannot. - The owner might not be able to cover all aspect of the business. They might not be very good at handling finance, which means that they might not be aware of the problems. - If the owner gets sick there won’t be anyone there to cover for him and it would mean that the business loses making money on those days. - It can be very difficult to raise finance as banks are more hesitant to lend large amount of money to sole traders compared to limited companies.
The liability of a sole trader is unlimited which means that the owner is liable for all debts the business acquire and if the business acquire more debts the owner is held responsible and has to pay all the debt back.
Partnership (unlimited) is a business that is run by two or more people who shares its profits and losses. The maximum number of people a partnership can have is 20. Partnership can be sealed by a Deed of partnership which is a document containing the duties, liabilities and the rights and obligations of the partners.
The Advantage of Partnership (unlimited):
- The business can raise more capital as they can have up to 20 people join and each partner can bring money into the business. - The business has more new ideas and skills contributing from the different partners. - The business can share responsibilities which will allow them to make the most of their abilities. If one of the partner is good at math, they...
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