Finance and Accounting

Financial accountancy - is used to prepare accounting information for people outside the organization or not involved in the day to day running of the company.


Financial accountants produce financial statements based on Generally Accepted Accounting Principles (GAAP) of a respective country.Financial accounting serves following purposes:

• producing general purpose financial statements;
• provision of information used by management of a business entity for decision making, planning and performance evaluation;
• for meeting regulatory requirements.

Accounting - Recording and reporting of financial transactions, including the origination of the transaction, its recognition, processing, and summarization in the FINANCIAL STATEMENTS.
Financial Statements - Presentation of financial data including BALANCE SHEETS, INCOME STATEMENTS and STATEMENTS OF CASH FLOW, or any supporting statement that is intended to communicate an entity's financial position at a point in time and its results of operations for a period then ended.
A balance sheet - a statement of the book value of all of the assets and liabilities (including equity) of a business or other organization or person at a particular date, such as the end of a "fiscal year."
A modern balance sheet usually has three parts: assets, liabilities and shareholders' equity. The main categories of assets are usually listed first and are followed by the liabilities. The difference between the assets and the liabilities is known as the 'net assets' or the 'net worth' of the company.

BALANCE SHEET
-----------------------------------
Assets
-----------------------------------
Fixed Assets
Delivery Van 6,000
Machinery 2,200
Total fixed assets 8,200
Current Assets
Bank Balance 1,400
Inventory 2,000
Accounts Receivable 2,500
-----------------------------------
Total current assets 5,900
Total assets 14,100
-----------------------------------
Liabilities and Equity
-----------------------------------
Current Liability
Accounts Payable 400
Long-Term Liabilities
Loans Repayable 2,200
Total Liabilities 2,600
-----------------------------------
NET ASSETS 11,500
-----------------------------------
Shareholders' Equity
Share Capital 10,000
Retained profits 1,500
-----------------------------------
TOTAL SHAREHOLDERS' EQUITY 11,500
-----------------------------------

Income statements - a financial statement for companies that indicates how net revenue (money received from the sale of products and services before expenses are taken out, also known as the "top line") is transformed into net income (the result after all revenues and expenses have been accounted for, also known as the "bottom line").
The purpose of the income statement is to show managers and investors whether the company made or lost money during the period being reported.

INCOME STATEMENT
Sales income1900
Less: Cost of goods sold 1100
Gross profits 800
Less: Operating expenses
Selling expense 110
General and administrative expense 170
Depreciation expense 140
Total operating expense 420
Operating profits 380
Less: Interest expense 80
Net profits before taxes 300
Less: Taxes (rate = 40%) 120
Net profits after taxes 180
Less: Preferred stock dividends 12
Earnings available for common stockholders 168
Earnings per share (EPS) 1.68

Income statements, along with balance sheets, are the most basic elements required by potential lenders, such as banks, investors, and vendors. They will use the financial reporting contained there in to determine credit limits.

A cash flow statement - a financial statement that shows incoming and outgoing money during a particular period (often monthly or quarterly).

The statement shows how changes in balance sheet and income accounts affected cash and cash equivalents, and breaks the analysis down according to operating, investing, and financing activities.

People and groups interested in cash flow statements include:

• Accounting personnel, who need to know whether the organization will be able to cover payroll and other immediate expenses;
• Potential lenders/creditors, who want a clear picture of a company's ability to repay;
• Potential investors who need to judge whether the company is financially sound;
• Potential employees or contractors who need to know whether the company will be able to afford compensation.

Pricing Strategies

There are many ways in which the price of a product can be determined. The following are the foremost strategies that businesses are likely to use.

• Competition based pricing;
• Cost-plus pricing;
• Creaming or skimming;
• Limit pricing;
• Loss leader;
• Market oriented pricing;
• Penetration pricing;
• Price discrimination;
• Predatory pricing;
• Contribution Margin-based Pricing;
• Psychological pricing.

Competition based pricing
Setting the price based upon prices of the similar competitor products.
Competitive Pricing is based on three types of competitive product:

• Products have lasting distinctiveness from competitor's product. here we can assume
  - The product has low price elasticity.
  - The product has low cross elasticity.
  - The demand of the product will rise.
• Products have perishable distinctiveness from competitor's product, assuming the product features are medium distinctiveness.
• Products have little distinctiveness from competitor's product. assuming that:
  - The product has high price elasticity.
  - The product has some cross elasticity.
  - No expectation that demand of the product will rise.

The pricing is done based on these three factors.

Cost-plus pricing
Cost-plus pricing is the simplest pricing method. The firm calculates the cost of producing the product and adds on a percentage (profit) to that price to give the selling price. This method although simple has two flaws; it takes no account of demand and there is no way of determining if potential customers will purchase the product at the calculated price.
Price = Cost of Production + Margin of Profit.

Creaming or skimming
Selling a product at a high price, sacrificing high sales to gain a high profit, therefore ‘skimming’ the market. Usually employed to reimburse the cost of investment of the original research into the product - commonly used in electronic markets when a new range, such as DVD players, are firstly dispatched into the market at a high price. This strategy is often used to target "early adopters" of a product/service. These early adopters are relatively less price sensitive because either their need for the product is more than others or they understand the value of the product better than others. This strategy is employed only for a limited duration to recover most of investment made to build the product. To gain further market share, a seller must use other pricing tactics such as economy or penetration.

Limit pricing
This is a strategy of pricing adopted by firms in a contestable market in order to 'limit' the ability of new entrants to take advantage of economies of scale where by costs are low enough for them to become competitive. This is one of the most popular price adjustment strategy used in the market.

Loss leader
A product which is sold at a loss to attract customers to buy other full priced products sold by the business.

Market oriented pricing
Setting a price based upon analysis and research compiled from the targeted market.

Penetration pricing
Setting an initial low price at the stage of deployment of the product to attract initial customers. The price is likely to rise later as the product gains a market share.

Price discrimination
Setting a different price for the same product in different segments to the market. For example, this can be for different ages or for different opening times, such as cinema tickets.

Predatory pricing
Aggressive pricing intended to drive out competitors from a market. It is illegal in some places.

Contribution Margin-based Pricing
Contribution Margin-based Pricing maximizes the profit derived from an individual product, based on the difference between the product's price and variable costs (the product's Contribution Margin Per Unit), and on one’s assumptions regarding the relationship between the product’s price and the number of units that can be sold at that price. The product's contribution to total firm profit (i.e., to Operating Income) is maximized when a price is chosen that maximizes the following: (Contribution Margin Per Unit) X (Number of Units Sold).

Psychological pricing
Pricing designed to have a positive psychological impact. For example, selling a product at £4.99 rather than £5.

Market research

Market research is the process of systematic gathering, recording and analyzing of data about customers, competitors and the market. Market research can help create a business plan, launch a new product or service, fine tune existing products and services, expand into new markets etc. It can be used to determine which portion of the population will purchase the product/service, based on variables like age, gender, location and income level. It can be found out what market characteristics your target market has. With market research, companies can learn more about current and potential customers.
We can split it into:

• Priamry research;
• Secondary research;
• Purpose;
• Sampling methods.

Primary research is research that's tailored to a company's particular needs. By customizing tried-and-true approaches — focus groups, surveys, field tests, interviews or observation — you can gain information about your target market. For example, you can investigate an issue specific to your business, get feedback about your Web site, assess demand for a proposed service, gauge response to various packaging options, and find out how much consumers will shell out for a new product.

Secondary research is based on information gleaned from studies previously performed by government agencies, chambers of commerce, trade associations, and other organizations. This includes Census Bureau information and Nielsen ratings.

Although secondary research is less expensive than primary research, it's not as accurate, or as useful, as specific and customized research. For instance, secondary research will tell you how much teenagers spent last year on basketball shoes, but not how much they're willing to pay for the shoe design your company has in mind.

The purpose of market research is to help companies make better business decisions about the development and marketing of new products. Market research represents the voice of the consumer in a company.

Sampling methods - within any of the types of frame identified above, a variety of sampling methods can be employed, individually or in combination.

-Random sampling. Also known as probability sampling, every combination of items from the frame, or stratum, has a known probability of occurring, but these probabilities are not necessarily equal. With any form of sampling there is a risk that the sample may not adequately represent the population but with random sampling there is a large body of statistical theory which quantifies the risk and thus enables an appropriate sample size to be chosen. Furthermore, once the sample has been taken the sampling error associated with the measured results can be computed. With non-random sampling there is no measure of the associated sampling error. While such methods may be cheaper this is largely meaningless since there is no measure of quality. There are several forms of random sampling. For example, in simpl random sampling, each element has an equal probability of being selected. It may be infeasible in many practical situations. Other examples of probability sampling include stratified sampling and multistage sampling.

-Systematic sampling. Selecting (say) every 10th name from the telephone directory is called an every 10th sample, which is an example of systematic sampling. It is a type of nonprobability sampling unless the directory itself is randomized. It is easy to implement and the stratification induced can make it efficient, but it is especially vulnerable to periodicities in the list. If periodicity is present and the period is a multiple of 10, then bias will result. It is important that the first name chosen is not simply the first in the list, but is chosen to be (say) the 7th, where 7 is a random integer in the range 1,...,10-1. Every 10th sampling is especially useful for efficient sampling from databases.

-Convenience sampling. Sometimes called grab or opportunity sampling, this is the method of choosing items arbitrarily and in an unstructured manner from the frame. Though almost impossible to treat rigorously, it is the method most commonly employed in many practical situations. In social science research, snowball sampling is a similar technique, where existing study subjects are used to recruit more subjects into the sample.

-Sample size. Where the frame and population are identical, statistical theory yields exact recommendations on sample size. However, where it is not straightforward to define a frame representative of the population, it is more important to understand the cause system of which the population are outcomes and to ensure that all sources of variation are embraced in the frame. Large number of observations are of no value if major sources of variation are neglected in the study. In other words, it is taking a sample group that matches the survey category and is easy to survey

A list of questions that can be answered through market research:

• What is happening in the market? What are the trends? Who are the competitors?
• How do consumers talk about the products in the market?
• Which needs are important? Are the needs being met by current products?

A simple example of what market research can do for a business is the following. At the company Chevrolet they brought several disciplines together in a cross-functional team to develop a concept for a completely new Corvette. This team enabled the marketers to come up with an alternative concept, one that balanced 4 attributes: comfort and convenience, quality, styling, and performance. This was considered radical because comfort and convenience were not traditional Corvette values. However, market research demonstrated that consumers supported the alternative concept. As a result the new Corvette was a huge success in the market.

With market research you can get some kind of confirmation that there is a market for your idea, and that a successful launch and growth are possible.

Market analysis

The marketing analysis process can be broken down into these parts:

• Market position;
• Market objectives;
• Market segments;
• Which segment?
• Market structure.

Market position

-A niche market is a focused, targetable portion (subset) of a market sector.
By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. A niche market may be thought of as a narrowly defined group of potential customers.
A distinct niche market usually evolves out of a market niche, where potential demand is not met by any supply.

-Market dominance is a measure of the strength of a brand, product, service, or firm, relative to competitive offerings. There is often a geographic element to the competitive landscape. In defining market dominance, you must see to what extent a product, brand, or firm controls a product category in a given geographic area.

-Market Follower is Follow the lead of the market leader – pricing, product development, etc.

Market objectives

Market object is any business element that enables or helps to enable an overall business objective. An example of a market object is an e-commerce web site. A market object can also be a smaller object within the larger parent - for instance, your shipping rules can be a market object within the larger market object, e-commerce web site.
Market objects are usually referred to by companies that are experts in both marketing and technology. This is a new breed of consultancy which attempts to take full advantage of the newer marketing technologies and deploy them for their clients.

There are a lot of parts of market objectives like: national growth, international growth, etical objectives, market share, consumer focus, product focus, igame, shareholder value, etc.

Market segments

Market segmentation is the process in marketing of dividing a market into distinct subsets (segments) that behave in the same way or have similar needs. Because each segment is fairly homogeneous in their needs and attitudes, they are likely to respond similarly to a given marketing strategy. That is, they are likely to have similar feelings and ideas about a marketing mix comprised of a given product or service, sold at a given price, distributed in a certain way, and promoted in a certain way.
Broadly, markets can be divided according to a number of general criteria, such as by industry or public versus private sector. Small segments are often termed niche markets or specialty markets. However, all segments fall into either consumer or industrial markets. Although it has similar objectives and it overlaps with consumer markets in many ways, the process of Industrial market segmentation is quite different.

Which segment?

-Mass Markets – high volume, low margin goods – confectionary, cars, clothing, food stuffs.
-Multiple Segments – appealing to wider range of groups – e.g. 4x4 vehicles – town, country, gender, lifestyle, social class?
-Single Segment – often a specialised product, e.g. machinery, exclusive goods.

Market structure

In economics, market structure (also known as market form) describes the state of a market with respect to competition.
The major market forms are:

• Perfect competition, in which the market consists of a very large number of firms producing a homogeneous product.
• Monopolistic competition, also called competitive market, where there are a large number of independent firms which have a very small proportion of the market share.
• Oligopoly, in which a market is dominated by a small number of firms which own more than 40% of the market share.
• Oligopsony, a market dominated by many sellers and a few buyers.
• Monopoly, where there is only one provider of a product or service.
• Natural monopoly, a monopoly in which economies of scale cause efficiency to increase continuously with the size of the firm.
• Monopsony, when there is only one buyer in a market.

The imperfectly competitive structure is quite identical to the realistic market conditions where some monopolistic competitors, monopolists, oligopolists, and duopolists exist and dominate the market conditions.

Quantitative and qualitative factors in decision making

Quantitative Factors

Considerations relevant to a decision that can be measured in terms of money or quantitative units. Examples are incremental revenue, added cost, and initial outlay.

Qualitative Factors

Considerations in decision making, in addition to the quantitative or financial factors highlighted byInteremental Analysis. They are the factors relevant to a decision that are difficult to measure in terms of money. Qualitative factors may include: (1) effect on employee morale, schedules and other internal elements; (2) relationships with and commitments to suppliers; (3) effect on present and future customers; and (4) long-term future effect on profitability. In some decision-making situations, qualitative aspects are more important than immediate financial benefit from a decision.

SWOT

Analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture or in any other situation of an organization or individual requiring a decision in pursuit of an objective. It involves monitoring the marketing environment internal and external to the organization or individual. The technique is credited to Albert Humphrey, who led a research project at Stanford University in the 1960s and 1970s using data from the Fortune 500 companies.

The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving the objective. SWOT analysis groups key pieces of information into two main categories:
Internal factors - The strengths and weaknesses internal to the organization.
External factors - The opportunities and threats presented by the external environment.
The internal factors may be viewed as strengths or weaknesses depending upon their impact on the organization's objectives. What may represent strengths with respect to one objective may be weaknesses for another objective. The factors may include all of the 4P's; as well as personnel, finance, manufacturing capabilities, and so on. The external factors may include macroeconomic matters, technological change, legislation, and socio-cultural changes, as well as changes in the marketplace or competitive position. The results are often presented in the form of a matrix.
SWOT analysis is just one method of categorization and has its own weaknesses. For example, it may tend to persuade companies to compile lists rather than think about what is really important in achieving objectives. It also presents the resulting lists uncritically and without clear prioritization so that, for example, weak opportunities may appear to balance strong threats.
It is prudent not to eliminate too quickly any candidate SWOT entry. The importance of individual SWOTs will be revealed by the value of the strategies it generates. A SWOT item that produces valuable strategies is important. A SWOT item that generates no strategies is not important.

Examples of SWOTs

Strengths and Weaknesses

• Resources: financial, intellectual, location
• Customer service
• Efficiency
• Infrastructure
• Quality
• Staff
• Management
• Price
• Delivery time
• Cost Capacity
• Relationships with customers
• Brand strength
• Local language knowledge
• Ethics
• Principles

Opportunities and Threats

• Political/Legal
• Market Trends
• Economic condition
• Expectations of stakeholders
• Technology
• Public expectations
• Competitors and competitive actions
  

PEST

It analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macroenvironmental factors used in environmental scanning. It is also referred to as the STEP, STEEP, PESTEL, PESTLE or LEPEST or Political, Economic, Socio-cultural, Technological, Legal, Environmental). Recently it was even further extended to STEEPLED, including ethics and demographics.
PEST/PESTLE alongside SWOT can be used as a basis for the analysis of business and environmental factors. PEST analysis is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations.
It is a part of the external analysis when doing market research and gives a certain overview of the different macroenvironmental factors that the company has to take into consideration. Political factors include areas such as tax policy, employment laws, environmental regulations, trade restrictions and tariffs and political stability. The economic factors are the economic growth, interest rates, exchange rates and inflation rate. Social factors often look at the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. The technological factors also include ecological and environmental aspects and can determine the barriers to entry, minimum efficient production level and influence outsourcing decisions. It looks at elements such as R&D activity, automation, technology incentives and the rate of technological change.Technological can also affect hoovers in the business
The PEST factors combined with external microenvironmental factors can be classified as opportunities and threats in a SWOT analysis.

Human Resource Management (HRM)

It is the strategic and coherent approach to the management of an organisation's most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the business.
The terms 'human resource management' (HRM) and 'human resources' (HR) have largely replaced the term 'Personnel Management' as a description of the processes involved in managing people in organisations.
Human resource management (HRM) is both an academic theory and a business practice that addresses the theoretical and practical techniques of managing a workforce. Synonyms include personnel administration, personnel management, manpower management, and industrial management, but these traditional expressions are becoming less common for the theoretical discipline. Sometimes even industrial relations and employee relations are confusingly listed as synonyms (e.g. Encyclopædia Britannica) although these normally refer to the relationship between management and workers and the behavior of workers in companies.
The theoretical discipline is based primarily on the assumption that employees are individuals with varying goals and needs, and as such should not be thought of as basic business resources, such as trucks and filing cabinets. The field takes a positive view of workers, assuming that virtually all wish to contribute to the enterprise productively, and that the main obstacles to their endeavors are lack of knowledge, insufficient training, and failures of process.
HRM is seen by practitioners in the field as a more innovative view of workplace management than the traditional approach. Its techniques force the managers of an enterprise to express their goals with specificity so that they can be understood and undertaken by the workforce, and to provide the resources needed for them to successfully accomplish their assignments. As such, HRM techniques, when properly practiced, are expressive of the goals and operating practices of the enterprise overall.
Nowadays, the more traditional synonyms such as personnel management are often used in a more restricted sense to describe those activities that are necessary in the recruiting of a workforce, providing its members with payroll and benefits, and administrating their work-life needs. These activities can require regulatory knowledge and effort, and enterprises can benefit from the recruitment and development of personnel with these specific skills.

Decision making

It is the cognitive process leading to the selection of a course of action among alternatives. Every decision making process produces a final choice. It can be an action or an opinion. It begins when we need to do something but we do not know what. Therefore, decision making is a reasoning process which can be rational or irrational, and can be based on explicit assumptions or tacit assumptions.
Common examples include shopping, deciding what to eat, when to sleep, and deciding whom or what to vote for in an election or referendum.
Decision making is said to be a psychological construct. This means that although we can never "see" a decision, we can infer from observable behaviour that a decision has been made. Therefore, we conclude that a psychological event that we call "decision making" has occurred. It is a construction that imputes commitment to action. That is, based on observable actions, we assume that people have made a commitment to affect the action.
Structured rational decision making is an important part of all science-based professions, where specialists apply their knowledge in a given area to making informed decisions. For example, medical decision making often involves making a diagnosis and selecting an appropriate treatment. Some research using naturalistic methods shows, however, that in situations with higher time pressure, higher stakes, or increased ambiguities, experts use intuitive decision making rather than structured approaches, following a recognition primed decision approach to fit a set of indicators into the expert's experience and immediately arrive at a satisfactory course of action without weighing alternatives.
Due to the large number of considerations involved in many decisions, computer-based decision support systems have been developed to assist decision makers in considering the implications of various courses of thinking. They can help reduce the risk of human errors.

Efective presentation

How to do a good presentation?

There are some things which you have to follow. They are:

• appearance;
• good behaviour;
• good talk about the topic;
• planing a presentation;
• trust yourself;
• comunication with audience (eye-contact, questions);
• good mood (with smile);
• to use visual aids;
• others.

Now some sentences about making a good presentation.

Appearance
Dress neatly and tidily - first impressions are important.
Carry yourself in a confident and professional manner.

Eye Contact
Keep eye contact with the class. This will:

• keep them alert.
• make them feel that they are being directly spoken to.
• make them feel part of the class.
• give them confidence in you as the instructor/presenter.

Monitor the class' reactions to what you are saying so that you can adjust your talk accordingly.

Do not:

• stare (intimidate).
• move your eyes from side to side (distraction).
• look out the window or at the clock (indicates boredom).
• look only at the training aids or chalk board (this can be perceived as impolite).
• look at your feet or at the ceiling (indication of nervousness or timidity).
  

Body Movements
Be natural - don't move around too much or too little.

Do not:

• stand rigid.
• march.
• slouch.

Do:

• move forward for emphasis (e.g. when standing at a podium).
• relax when talking from behind a desk -this creates some intimacy with a group.
• slowly and on occasion move from side to side to engage all parts of the class.

Gestures
Do: use meaningful and appropriate gestures to make a point.
Do not, or at least avoid:

• play with keys or coins in your pocket.
• use your hands too much, touching your nose or ears and excessive coughing.
• use gestures that indicate you are washing your hand of a situation or wringing your hands because of frustration.
• use a praying gesture as some may find this offensive or foot tap as this may be perceived as patronizing.
• use a pointer, pen, pencil or chalk to point at an individual may be perceived as offensive.
  

Voice

Volume - Speak loudly enough to be heard.
Pitch - Use effectively to convey meaning.
Rate - Speak more quickly to convey enthusiasm.
- Speak more slowly to emphasize key points or issues.

Do not:

• speak so quickly that no one can understand.
• speak so quickly that materials are glossed over rather than well explained so that they are understood.
• speak so slowly that people become bored or drowsy.

Articulation
Speak clearly, pronouncing words carefully -don't mumble. Control your lips, teeth and tongue to assist you.

Language
Avoid "pet" expressions (e.g."O.K.","Like", "You know").
Do not use profanity.

Humor

Use humour but only appropriately.

The structure of the presentation is:

1. Introduction;
2. Body;
3. Conclusion.
   

In the introduction, you "tell them what you are going to tell them".
In the main body, you "tell them".
In the conclusion, you "tell them what you told them" .

The introduction should clearly tell the audience what the presentation will cover so that the audience is prepared for what is to come.

The body should develop each point previewed in the introduction.

The conclusion should reiterate the ideas presented and reinforce the purpose of the presentation. It usually answers the question: "so what?"

The conclusion should reiterate the ideas presented and reinforce the purpose of the presentation. It usually answers the question: "so what?"

Visual aids

• They help your audience understand your ideas.
• They help the audience follow your argument, your "train" of thought.
• They make your presentation more memorable and thus increase the chances that what you said will be remembered.

This is the place were you can learn more about how to make a good presentacion: http://www.ruf.rice.edu/~riceowl/oral_presentations.htm

Business Organisation

Business functions:

• human resources;
• sales and marketing;
  
• research and development;
• productions/operations;
• customer service;
• finance and accounts;
• administration and IT.
  

If you want to make a good business, you have to look to main areas of it. One of them is human resourses. It contains of:

1. recruitment and retention (job description, person specifications);
   
2. dismissal;
3. redundancy;
4. motivation;
5. professional development and training;
6. health and safety and conditions at work;
   
7. liaison with trade unions.
   

For egzample:

(The law imposes a responsibility on the employer to ensure safety at work for all their employees.

Employers have to take reasonable steps to ensure the health, safety and welfare of their employees at work.

Failure to do so could result in a criminal prosecution in the Magistrates Court or a Crown Court. Failure to ensure safe working practices could also lead to an employee suing for personal injury or in some cases the employer being prosecuted for corporate manslaughter.
As well as this legal responsibility, the employer also has an implied responsibility to take reasonable steps as far as they are able to ensure the health and safety of their employees is not put at risk. So an employer might be found liable for his actions or failure to act even if these are not written in law.
An employer should assess the level of risk as against the cost of eliminating that risk in deciding whether they have taken reasonable steps as far as they are able. )


The other thing, which is also very important is sales and marketing. It contains of:

• market research;


• promotion strategies;


• pricing strategies;


• sales strategies;


• the sales team;


• product.
  

For egzample:
(Market research is the process of systematic gathering, recording and analyzing of data about customers, competitors and the market. Market research can help create a business plan, launch a new product or service, fine tune existing products and services, expand into new markets etc. It can be used to determine which portion of the population will purchase the product/service, based on variables like age, gender, location and income level. It can be found out what market characteristics your target market has. With market research, companies can learn more about current and potential customers.
The purpose of market research is to help companies make better business decisions about the development and marketing of new products. Market research represents the voice of the consumer in a company.
Product research - This looks at what products can be produced with available technology, and what new product innovations near-future technology can develop.

In marketing, a product is anything that can be offered to a market that might satisfy a want or need. A product is similar to goods. In accounting, goods are physical objects that are available in the marketplace. This differentiates them from a service, which is a non-material product. The term goods is used primarily by those that wish to abstract from the details of a given product. As such it is useful in accounting and economic models. The term product is used primarily by those that wish to examine the details and richness of a specific market offering. As such it is useful to marketers, managers, and quality control specialists.)

Research and development

The phrase research and development (also R and D or R&D) has a special commercial significance apart from its conventional coupling of scientific research and technological development. For 2006, the world's three largest spenders of R&D are the United States (US$330 billion), China (US$136 billion) and Japan (US$130 billion).
In general, R&D activities are conducted by specialized units or centers belonging to companies, universities and state agencies. In the context of commerce, "research and development" normally refers to future-oriented, longer-term activities in science or technology, using similar techniques to scientific research without predetermined outcomes and with broad forecasts of commercial yield.
Statistics on organizations devoted to "R&D" may express the state of an industry, the degree of competition or the lure of progress. Some common measures include: budgets, numbers of patents or on rates of peer-reviewed publications.
Bank ratios are one of the best measures, because they are continuously maintained, public and reflect risk.

Productions/operations

• acquiring resources;
  
• planing output;
• monitoring costs;
• projections on future output;
• production methods;
• efficiency.

For egzample:
(Economic efficiency is a general term for the value assigned to a situation by some measure designed to capture the amount of waste or "friction" or other undesirable economic features present. The term microeconomic reform refers to any policy designed to increase economic efficiency.)

Customer service

Customer service is the provision of service to customers before, during an after a purchase.
Its importance varies by product, industry and customer. As an example, an expert customer might require less pre-purchase service (i.e., advice) than a novice. In many cases, customer service is more important if the purchase relates to a “service” as opposed to a “product".
Customer service may be provided by a person (e.g., sales and service representative), or by automated means called self-service. Examples of self service are Internet sites.
Customer service is normally an integral part of a company’s customer value proposition.

Finance and accounts

Accountancy (profession) or accounting (methodology) is the measurement, disclosure or provision of assurance about financial information primarily used by managers, investors, tax authorities and other decision makers to make resource allocation decisions within companies, organizations, and public agencies. The terms derive from the use of financial accounts. Accounting is also widely referred to as the "language of business.
Financial accountingis one branch of accounting and historically has involved processes by which financial information about a business is recorded, classified, summarized, interpreted, and communicated; for public companies, this information is generally publicly-accessible. By contrast management accounting information is used within an organization and is usually confidential and accessible only to a small group, mostly decision-makers.

Administration and IT

In business, administration consists of the performance or management of business operations and thus the making or implementing of major decisions. Administration can be defined as the universal process of organizing people and resources efficiently so as to direct activities toward common goals and objectives.
Administrator can serve as the title of the General Manager or Company Secretary who reports to a corporate board directors. This title is archaic but in many enterprises this function, and its associated Finance, Personnel and MIS services, is what is intended when the term "the Administration" is used.
In some organizational analyzes, Management is viewed as a subset of administration, specifically associated with the technical and mundane elements within an organization's operation. It stands distinct from executive or strategic work.
In other organizational analyzes, administration can refer to the bureaucratic or operational performance of mundane office tasks, usually internally oriented and usually reactive rather than proactive.

Organization Charts:
An organizational chart is a chart which represents the structure of an organization in terms of rank. The chart usually shows the managers and sub-workers who make up an organization. The chart also shows relationships between staff in the organization which can be:

Line - direct relationship between superior and subordinate.
Lateral - relationship between different departments on the same hierarchical level.
Staff - relationship between a managerial assistant and other areas. The assistant will be able to offer advice to a line manager. However, they have no authority over the line manager actions.
Functional - relationships between specialist positions and other areas. The specialist will normally have authority to insist that a line manager implements any of their instructions.

In many large companies the organization chart can be large and incredibly complicated and is therefore sometimes dissected into smaller charts for each individual department within the organization.

There are three different types of organization charts:
Hierarchical
Matrix
Flat

The following is an example of a simple hierarchical organizational chart:

Businss ownership: the private sector

Private sector: business activity owned financed and controlled by private individuals

• sole trades;
• partnership;
• private limited companies;
• public limited companies;
• co-operatives;
• franchises;
• charities.

A sole trader is a business that is owned by one person. It may have one or more employees. It is the most common form of ownership in the UK.

The main advantages of setting up as a sole trader are:

• Total control of the business by the owner.
• Cheap and easy to start up – few forms to fill in and to start trading the sole trader does not need to employ any specialist services, other than setting up a bank account and informing the tax offices.
• Keep all the profit – as the owner, all the profit belongs to the sole trader.
• Business affairs are private – competitors cannot see what you are earning, so will know less about how the business works and how it succeeds.

The reasons why sole traders are often successful are:

• Can offer specialist services to customers – e.g. appliance repair specialists.
• Can be sensitive to the needs of customers – since they are closer to the customer and will react more quickly, because they are the decision makers too.
• Can cater for the needs of local people – a small business in a local area can build up a following in the community due to trust – if people can see the owner they feel more comfortable than if the owner is in some far off town, not able to hear the views of the local community.

The reasons for being a sole trader are often a balance between business and personal costs and benefits. Many will prefer the satisfaction of running a business with little paper work against the risks, pressure and probably long working hours.

A sole trader is liable for any debts that the business incurs. This means that any money that the owner has put into the business could be lost, BUT IMPORTANTLY, if the business continues to incur further costs then the owner has to pay these as well. In some cases they may have sell some of their own possessions to pay creditors.

Such a risk often puts potential sole traders off setting up businesses, but also makes them consider the other forms of business structure.

A partnership is a business where there are two or more owners of the enterprise. Most partnerships are between two and twenty members though there are examples like John Lewis and some of the major world accountancy firms where there are hundreds of partners.

The main disadvantages of becoming a partnership are:

• Have to share the profits.
• Less control of the business for the individual.
• Disputes over workload.
• Problems if partners disagree over of direction of business.

The next step for a partnership is to move towards becoming a private limited company. However some partnerships do not want to move to this stage.

It might be interesting:
The Technology Partnership programme in Lithuania was established in 2004. Lithuania was the third country that took part in the Technology Partnership programme.
Our partner in Lithuania is Kaunas University of Technology.
The Technology Partnership office is situated at the university in Kaunas.
Head of the office is Violeta Kauneliene.

The advantages of remaining a partnership rather than becoming a private limited company are:

• Costs money to set up limited company (may need to employ a solicitor to set up the paper work).
• Company accounts are filed so the public can view them (and competitors).
• May need to spend money on an auditor to check the accounts before they are filed.

A limited company is a business that is owned by its shareholders, run by directors and most importantly whose liability is limited.

To set up as a limited company, a company has to register with Companies House and is issued with a Certificate of Incorporation. It also needs to have a Memorandum of Association which sets out what the company has been formed to do, and Articles of Association which are internal rules over including what the directors can do and voting rights of the shareholders.

Limited companies can either be private limited companies or public limited companies.

The difference between the two are:

Shares in a public limited company (plc) can be traded on the Stock Exchange and can be bought by members of the general public. Shares in a private limited company are not available to the general public; and

The issued share capital of a plc (the initial value of the shares put on sale) must be greater than £50,000 in a plc. A private limited company may have a smaller share capital

A private limited company might want to become a “plc” because:

Shares in a private limited company cannot be offered for sale to the general public, so restricting availability of finance, especially if the business wants to expand. Therefore, it is attractive to change status

It is also easier to raise money through other sources of finance e.g. from banks.

The disadvantages of a being a public limited company (plc) are:

• Costly and complicated to set up as a plc – need to employee specialist bankers and lawyers to help organise the converting to the plc.
• Certain financial information must be made available for everyone, competitors and customers included (would you want them to know how much profit you are making?)
• Shareholders in public companies expect a steady stream of income from dividends, which might mean that the business has to concentrate on short term objectives of creating a profit, whereas it might be better to work on longer term objectives, such as growth and investment.
• Threat of takeover, because another company can buy up a large number of shares because they are traded publicly (can be sold to anyone). If they buy enough, they can then persuade other shareholders to join with them to vote in a new management team.

Shareholders own the company. They buy shares because:

Shares normally pay dividends, which is a share of the profits at the end of the year. Companies on the Stock Exchange usually pay dividends twice each year.

Over time the value of the share may increase and so can be sold for a profit – this is known as a “capital gain”. Of course, the price of shares can go down as well as up, so investing in shares can be very risky.

A co-operative is where a number of individuals or businesses work together to achieve a common purpose. They are normally formed so individuals and small businesses can benefit from being part of a larger group, meaning they have more power to buy or bargain.

There are three main types of co-operatives:

• Retail co-operatives
• Marketing or trader co-operatives
• Worker co-operatives

A retail co-operative is probably the most familiar co-op. The Co-Op shops and Leo Hypermarkets are a regular sight in the high street.

The objectives of a co-op tend to set them apart from other businesses. The objectives are normally more focused on the members of the co-operative, the local community and the world community. Though profits are required to enable them to reinvest in their business, they will not be a primary objective.

A franchise is where a business sells a sole proprietor the right to set up a business using their name.

Examples of major franchises are:

• McDonalds
• Clarks Shoes
• Pizza Hut
• Holiday Inn

The franchiser is the business whose sells the right to another business to operate a franchise – they may run a number of their own businesses, but also may want to let others run the business in other parts of the country.

A franchise is bought by the franchisee – once they have purchased the franchise they have to pay a proportion of their profits to the franchiser on a regular basis. Depending on the business involved, the franchiser may provide training, management expertise and national marketing campaigns. They may also supply the raw materials and equipment.

The advantages of being a franchiser:

• Large companies see it as a means of rapid expansion with the franchisee providing most of the finance.
• If the franchise model works, then there are large profits to made from
• - selling franchises
• - royalty payments
• - selling raw materials and equipment.

The advantages of setting up as a franchisee are:

• The franchisee is given support by the franchiser. This includes marketing and staff training. So starting a business in this way requires less expertise and is less lonely!
• The franchisee may benefit from national advertising and being part of a well-known organization with an established name, format and product
• Less investment is required at the start-up stage since the franchise business idea has already been developed
• A franchise allows people to start and run their own business with less risk. The chance of failure among new franchises is lower as their product is a proven success and has a secure place in the market

The disadvantages of setting up as a franchisee are:

• Cost to buy franchise – can be very expensive (hundreds of thousands of pounds).
• Have to pay a percentage of your revenue to the business you have bought the franchiser from.
• Have to follow the franchise model, so less flexible. You would probably be told what prices to set, what advertising to use and what type of staff to employ.

In conclusion, a buying a franchise a good way of an individual setting up a business because:

They do not have to establish themselves in the same as a sole trader might have to.

They will have the support of a tried and tested business model, often with a national marketing campaign behind them.

A charitable attitude is a very pure quality of life, ant it comes combined with transcendental qualities. In English, the word 'charity' means to give.

Trading or investment companies, sole traders, or trading partnerships that provide assistance to charities by seconding employees to them on a temporary basis can claim relief for the employment costs that they continue to incur.

Business objectives

When a sole trader sets up they may have some unstated aims or objectives - for example to survive for the first year. Other businesses may wish to state exactly what they are aiming to do, such as Amazon, the Internet CD and bookseller, who wants to “make history and have fun”.
So, the aim of business objective is to investigate the competing aims of business in private and public sectors.

Objectives give the business a clearly defined target. Plans can then be made to achieve these targets. This can motivate the employees. It also enables the business to measure the progress towards to its stated aims.

Business activity:
- primary sector (extraction of row materials from the Earth - fishing, quaring);
- secondary sector (procesing of row materials into finished or semi - finished products - manufacturing);
- tertiary sector (servicies industries - transport, wholesaling, communication, relaiting);
- quartemary sector (health education, research, leasure).

Objectives of private sector business:

• profit;
• survival;
• share price;
• social issuses;
• market power;
• sales and sales revenue;
• efficiency;
• quality and inovation;
• image and reputation.
  
  Profit maximisation – try to make the most profit possible – most like to be the aim of the owners and shareholders.
  Profit satisficing – try to make enough profit to keep the owners comfortable – probably the aim of smaller businesses whose owners do not want to work longer hours
  
  Survival – a short term objective, probably for small business just starting out, or when a new firm enters the market or at a time of crisis.
  Sales growth – where the business tries to make as many sales as possible. This may be because the managers believe that the survival of the business depends on being large. Large businesses can also benefit from economies of scale.

Public Sector: bussiness activity owned, financed and controled by the state through government or local authorities.

- Government - key departament set policy and monitor implementtation.

- Local authorities - Country Councils, District Councils, Parish Councils.

- Health Trust.

- Public Corporation - BBC

Range of Business Offered by the public sector:

• parks;
  
• roads;
  
• univercity;


• street lighting;


• museums and art;


• schools;
  
• environmental health;


• trade standarts;


• cemeteries.