Introduction of Business

This document provides an introduction to business organizations and discusses the different types of business structures, including sole proprietorships, partnerships, and corporations. It also explains Porter's five forces model and its application to a dessert shop. Additionally, the document explores the impact of macro-environmental factors, such as political, economic, social, technological, environmental, and legal factors, on businesses.

Introduction
of Business

Contents
Introduction of Business........................................................................................................................1
Introduction...........................................................................................................................................3
Type of business organisation...........................................................................................................3
Porter’s five forces model..................................................................................................................4
Macro-environmental factors............................................................................................................5
Conclusion.............................................................................................................................................6
References.............................................................................................................................................7

Introduction
Business organisation is one of the entity or a well structure company that
formed for the purpose of commercial enterprise or an organisation. Such
organisations are predicted on law governing exchange and contracts, property
rights or the incorporation. As a business owner, there is a need to carry some of
the well planned and well-structured business organisation. There is a need to
adopt some sort of legal adoption, personal liability and financial stability.
Long-term implications are all needed for the business sufficiency and there is a
need to consult with an accountant which helps you to select the form of
ownership which is also a right for you (Karia, N., 2020). There are four types of
business organizational structure Sole Proprietorship, Partnerships and
corporations.
Type of business organisation
Sole Proprietorships: It refers to such type of business organisation on
which the beginning is from the small business. These are the firms which have
been owned by only single person. Someone who have day-to-day
responsibilities to run all their business by own. The assets made by him owned
the sole proprietorships and generating the profits. Liabilities or debts are all
included in the responsibility of any assets and liabilities. In the eyes of law and
public, sole proprietorships includes least expensive form of the ownership, and
functionally organize (Rasouli and et. al., 2019). Sole proprietorship are completely
in control and within some of the parameters of law, decision making process is
quiet inclusive.
The owner’s personal tax return has been flow directly from the
maximum profit of the organisation. Also, the business can be easily dissolve, if
somehow they get desired. It can be also suggested that Sole proprietorships has
some negative aspects as well including unlimited liability and legally
responsible for all the debts against the business. However it can simply risk the
personal assets. Raising of the funds and limited using funds are attained in
terms of personal loans and consumer loans. The employees can simply
benefitted from the medical premium but not deductible from the income of the
business (Saura and et. Al., 2019).
Partnerships : It refers to such type of organisation where two or more
people are working together and they reflected out as a single organisation of

more than two owners. Also, the partnership is simple based on the legal factor
which suggested that every discussions and the decision making process will be
made out on the basis of partnerships. When the business organisation has been
suggested that partnership still has a crisis times and defining process
sometimes becomes a huge problem.
Some advantages of the partnerships includes they are relatively easy,
increase in funds are much more easier, profits flow directly through the
partners, employees are truly attracted with the business organisation. Also,
some disadvantages of the partnership organistion includes profits have to be
shared with each owner, tax returns is a big threat for employers and employees
sometimes and sometimes decisions have to be shared due to which poor
disagreement will be occur.
Corporations: A corporation is based on law or it is one of the well-
structured entity, that has a relevancy with the government rather a person own
firm. The corporation can simply rely on the taxes and agreements should be
contextual. The corporation has a life of its own and does not able to dissolve
when there is a change in the ownerships. Some well advantages of the
corporations includes it can raise additional funds due to change is stocks, a
corporation deduct the cost of benefits, shareholders have some sort of limited
liability for the judgments and corporation, considered by law to be a unique
entity. Some disadvantages including incorporation process require more time
and money, and sometimes it gives result in high overall taxes. From all the four
business organisation which have been mentioned above the “Little dessert
shop” called as a partnership type of organisation because there are more than
one owner who take decisions for the firm.
Porter’s five forces model
The porter’s five forces model is one of the model which helps in analyzing the
competition of a business in the market. “Little dessert shop” analysis in
mentioned below
1. Competition in the industry: The first five forces model refers to the number
of competitors and ability to completely undercut the company. In relation with
the “Little dessert shop” large number of competitors and number of equivalent
products they offer are lesser the power of a company due to initial stage of the
company. Conversely, competition rivalry is quiet low, a company has a great
power to charge the high prices and set the terms on the high level.

2. Potential of the new entrants: Less time and money is the basic cost for a
competitor to enter in a company’s market. In relation with the “Little dessert
shop” an industry must have some strong barriers so the entry of the new
entrants is quiet ideal for the existing companies.
3. Power of suppliers: Cost of input can be easily drives in suppliers. It is
affected by the number of suppliers and how much it would cost a company to
switch to another supplier. In relation with “Little dessert shop” the fewer
suppliers to an industry, company completely depend on the supplier. And as a
result, suppliers do receive more costs and push for other advantages.
4. Power of customers: The ability of the customers is included level of power
in the five forces. It is affected on the basis of buyers and consumers a company
do have, In relation with the “Little dessert shop” a smaller and more powerful
client base each consumer has power to negotiate for the lower prices and some
better deals. A company that has a smaller, independent consumer has an easier
timing to increase profitability.
5. Threats of the substitute products: The last five forces model is the substitute
of goods and services that can be placed on the basis of company’s product or
services. The companies which produce goods and services have no close
substitutes and more power to increase the price and lock in some sort of the
favorable times. In relation with the “Little dessert shop” close substitutes are
available and consumers have options to buy a product of the company and the
power is weakened.
Macro-environmental factors
Political factors: It refer to such factors which has a government interventions.
Political instability, elections, government policies are some of the factor which
affect the Little dessert shop in some instances. If society has been suffer from
some major issues that there can be a possibility that it will impact on the
dessert shop as well.
Economic factors: These are such factors which include employment rate,
inflation, cost efficiency are some of the major economic essentials that affect
the organisation. In relation with the “Little dessert shop” cost increase and
decrease are negatively affected the organisation. Also the change in rate of
inflation is also one of the major factor which affect the organisation.

Social factors: It refers to such factor that impact the organisation on social
basis. Discrimination, castes, gender inequality and many more are some of
components which has a negative impact on the society. In relation with the
“Little dessert shop” a major factor is the policies which are made for the
benefit of the society because organisation has a responsibility and a duty to
prominently have a check on it.
Technological factors: It refers to those factors which include some sort of
advancement in the technology and some partial factors which are basically
stated about technology. In relation with the “Little dessert shop” the owner
uses some good and sort of advance technology for the better sale and
production. It negatively impact the organisation on the basis of high cost but
time management and growth is highly based on the technologies used by the
businesses.
Environmental factors: Natural calamities or pollution that affected the
organisation as well are some of the environmental factor that affected the
organistaion. In relation with the “Little dessert shop” there is a need to have a
good check on the society for achieving better success and growth in the
society.
Legal factors: It refers to such factors which are based on laws and policies
made by the government affected the organisation. In relation the “Little dessert
shop” is one of the company which needs to be taken into the consideration
some sort of laws and regulations (Haris and et. Al., 2019).
Conclusion
The above discussion concludes that “Little dessert shop” has a
partnership type of organisation because there is more than one owner who will
be taking decisions. Other than that, porter’s five forces model has been applied
above.

References
Books and Journal
Karia, N., 2020. Green logistics practices and sustainable business model.
In Handbook of Research on the Applications of International Transportation and Logistics
for World Trade (pp. 354-366). IGI Global.
Saura and et. Al., 2019. Detecting indicators for startup business success: Sentiment
analysis using text data mining. Sustainability, 11(3), p.917.
Rasouli and et. Al., 2019. Service orientation in business networking: a demand-
supply chain perspective. Production Planning & Control, 30(1), pp.2-19.
Haris and et. Al., 2019, February. Effectiveness of Entrepreneurship Communication
Skills in Business Group: Ethno-Andragogy Approach to Technical Vocational Education
and Training (Ethnographic study: Processed snacks in Sumbawa). In 5th UPI International
Conference on Technical and Vocational Education and Training (ICTVET 2018). Atlantis
Press.