Introduction to Business: Types of Businesses, Business Structure, and Impact on Business

This report provides an introduction to business, covering different types of businesses, business structure, and the impact on business. It includes a PESTLE analysis and Porter's five forces model to analyze the macro and micro environment. The report concludes with recommendations for starting a new business.

Introduction to Business

Table of Contents
INTRODUCTION ..........................................................................................................................4
MAIN BODY ..................................................................................................................................4
Different types of businesses......................................................................................................4
Your business structure .............................................................................................................5
Macro Environment....................................................................................................................5
Micro Environment.....................................................................................................................7
Impacts on your business ...........................................................................................................8
CONCLUSION ...............................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Business basically refers to an organisation or enterprising entity which is busy in
professional activities, commercial and industrial aspect. Businesses can be for profit entities or
non-profit organisations. They can be basically ranges from sole proprietorships, limited liability
companies, partnerships and corporations(Doanh and et.al., 2021). This term is also used for
defining the activities and efforts of people to sell and produce services and goods for purpose of
profit. In the present report, Cream cafe is taken into consideration. Cream cafe basically aims
for offering moments of relaxation and fulfil the energy for a new day. Their shop also support in
terms of relieving stress and also act as comfortable place in order to meet with friends. The
present report will cover analysis about dissimilar kinds of businesses and also about the
business structure. In addition to this the report will cover analysis about macro and micro
environment and also about impact on the business. Moreover the report will cover discussion
about recommendations for the business.
MAIN BODY
Different kinds of businesses
There are disimilar types of businesses in this world of business and there are basically
four kinds of businesses.It is explained into the following way:
 Sole Proprietorship: It is basically a company in unincorporated form which is
possessed by only one individual. Under this kind of business, it basically provides low
amount of financial protection and legal protection to the owner. They basically has
shared the same identity as the company by the owner of business and do not create a
separate legal identity for the business. So owner of the business is fully responsible for
any kind of liabilities which is incured by the company.
 Partnership: This is a kind of business where ity is owned by two or more people who
are called as partners.The income is treated as owner income which is taxed on the single
basis and they have the advantage of flow through taxation. The liabilities of the firm is
basically paid by the owners in partnerships (Freeman., 2017). There are dissimilar kinds
of partnerships which basically include limited liability partnerships, general partnerships
and limited partnerships.

 Limited liability company: This is a company which combines the aspects of both
corporations and partnerships. Limited liability company retains the benefits of tax of
limited liability corporations and sole proprietorships. They can choose between
treatments of tax at different level (Hamdani and et.al., 2018). When LLC have the option
of choosing should not be considered as corporation at C level and it retains to flow
through taxation status.
 Corporation: Corporations are basically created by shareholders and act as separate
legal entity as well. Corporations are more complicated to create as compared to other
three types of businesses. Business owners can also be protected from being liable on
personal basis for the company's debts and legal disputes as well(Fried and Mumcu eds.,
2016).There are basically three types of corporations which include S corporation, C
corporation and non-profit corporation.
Your business structure
Cream café is basically follows the partnership form of business. There are some partners in
Cream Cafe which includes CMO, CFO, CCO and Shop Manager. CMO is named as Mihai-
Daniel Cazacu. CFO is named as Florin Emrah Badulescu and CCO is named as Loana
Madaliana Pinzari. The shop manager name is Ana Florentina Florica. In this type of
business there is no financial stress because there are partners in the business who can
support at the time of crisis situation. It has been observed that owners in partnership are
basically responsible for liabilities in the firm.
Macro Environment
Macro environment basically refers to those set of conditions which exist in the economy into
the whole spectrum rather than in a particular region or sector as well.
PESTLE Analysis
Political Factors: These are the factors which basically include tax policy,
environmental regulations, tariffs, trade restrictions and also political stability as well(Helin and
Jabri., 2016). These factors basically talks about the extent to which a government influence the
industry or a company. As the UK country has strong stability so cream café can easily enter into
the European market. The different locations of London has strong advantage in terms of
stability factor due to which it is easier for Cream Café to establish themselves.

Economic Factors: These factors basically include economic growth inflation, exchange
rate, unemployment, credit availability and cost of living as well(Jaiswal., 2018). In context to
Cream Café they when they are planning to enter into European market so it has been observed
that it has strong economic growth and also has strong performance in terms of financial
parameter that’s why they can easily establish themselves in different locations of London.
Social Factors: These are the factors which basically include expectations and cultural
norms, health consciousness, population growth rates, health and safety as well. These factors act
as support system in terms of better planning their strategy and market analytics. In context to
Cream Café, they offer such kind of products into the market which will give relaxation to the
population of London people due to which they will get attract in terms of purchasing their
products into positive manner.
Technological Factors: These are the factors which means that development and
innovation in technologies. This will impact the operations factor of an organisation. In context
to Cream Café, they have used different technologies in terms of making their products into the
best manner so that they can provide best products into the expanding market.
Legal Factors: These are the factors which include access to materials, quotas,
resources, changes to legislation which impacts employment, taxation and imports and exports.
This is a kind of factor which has both internal and external sides as well. There are certain laws
due to which it has an impact on the business environment in a country. In context to Cream
Café, when they are planning to expand themselves in new market they haver to follow rules and
regulations of that particular country so that they can run their business into legalised form with a
successful parameter.
Environmental Factors: These are the factors which are majorly concerned with
influence of ecological aspects and effect of surrounding environment as well(Krogstie., 2016).
It basically include environmental protection laws, waste disposal laws and energy consumption
regulation as well. In context to Cream Café when they are planning to enter into different
locations of London then they have to take care about the environmental laws followed by that
particular country so that their business can’t harm the environment into negative spectrum.
Micro Environment
It is an environment which is in the direct contact of the company and also affects the daily
activities of business into the straight away manner.

Porter’s five forces model
 Competitive Rivalry: It is the force which depicts about large number of competitors in
this market and their effectiveness to under cut the company. The power of company
decided through the number of competitors when there are large number of competitors
along with number of equivalent products and services they offer then lesser will be the
power of company(Mintii and Soloviev., 2018). Into the contrary manner, it has been
observed that when competitive rivalry is low then company has higher power to charge
prices and also set terms of deals in order to achieve higher sales and profits as well. In
context to Cream Café, it is important for café to analyse that how many competitors are
there into this new market so that they can give tough competition to others and stand
strongly into this market.
 Potential of new entrants: The company’s power also get affected by the force of new
entrants into the market. When a competitor takes less time and effort to enter into the
market then it act as tough competitor and can also weaken the position of existing
company into the market. In this industry, when there are strong barriers to enter into the
market then it is ideal for existing companies who can charge higher prices and can
negotiate at better terms. In context to Cream Café, it is important that they have to
analyse their industry into deeper manner when they are entering into new market
because easy entry into the market can give advantage to their competitors as well.
 Power of Suppliers: It is a factor which talks about how easily suppliers can drive up the
cost of inputs. When there are fewer suppliers into the industry then company will be
more dependent on suppliers(Wieland and et.al., 2017).When supplier power is higher
then it is easy to drive up the input costs and also push for other advantage in trade.
When there are many suppliers then company can keep its input cost at lower spectrum
and enhance profits as well. In context to Cream café, they have to analyse about their
number of suppliers so that accordingly they can adjust their input cost and enhance the
profits into positive spectrum.
 Power of customers: Customers have the ability to drive prices on lower and higher
spectrum and it also affected by how many customers are there with the company. When
there are lower number of customers then they have more power to negotiate into positive
spectrum(Linnenluecke and et.al., 2015). In context to Cream café, they have to analyse

about their customers into the new market so that they can strongly stick to their prices
otherwise they have to plan for increasing the number of customers into the market.
 Threat of substitutes: Substitute goods and services can act as threat for the company
when they are used in the place of company’s products and services. Companies who
have lower substitutes of their products then they have more power to charge prices on
the higher spectrum. When substitutes are available into the market then it is easier for
customers to switch on the another option. In context to Cream café, they have to sell
those kind of products and quality of products should be of such kind so that customers
can’t switch to another option in easier form.
Impacts on your business
When business will enter into different locations of London then they have new
opportunity to interact with different kinds of customers in this European market. When Cream
Café has analysed the market into appropriate manner then they have opportunity to earn revenue
on large scale and also get a new chance to interact with new investors into their business. When
business provide unique products into the market and also they sell products in such a manner
that customers can’t switch to another option then it is easier for café to stick their prices on
higher range (Cleary and Quinn., 2016).When capture the market into appropriate manner then
they can also plan for some new products according to customers taste and preferences which
will give tough competition to others. So when Cream café operated into successful manner into
the European market then they have more chances of earning profits on large scale. In this way,
café has impacted the business through its products and services into positive manner.
CONCLUSION
The above stated report concludes that businesses are very important for running an
economy into successful manner. It has been concluded that there are different kinds of
businesses in this competitive world. For starting a new business it is important to understand
that business comes in which category so that further actions can be taken accordingly. For
starting a new business it is important to deeply study about structure of business so that further
decisions can be taken into appropriate manner. It has been analysed that there are certain
frameworks which will be helpful in terms of entering into new market.

These frameworks help in such a manner that it gives idea about taking decisions and
analysing the environment into appropriate manner. PESTLE analysis and porter’s five forces
analysis are the major parameters which act as support system in terms of studying the market
into appropriate manner. It has been recommended that its not easier for entering into new
market so detailed analysis is not enough for successful running of business. It has been required
that to take practical examination of market according to current and realistic situation as well so
that business can be run into smoother manner.

REFERENCES
Books and Journals
Cleary, P. and Quinn, M., 2016. Intellectual capital and business performance: An exploratory
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19 and business opportunity recognition. Entrepreneurial Business and Economics
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Freeman, R. E., 2017. The new story of business: Towards a more responsible capitalism.
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Fried, G. and Mumcu, C. eds., 2016. Sport Analytics: A data-driven approach to sport business
and management. Taylor & Francis.
Hamdani and et.al., 2018. The influence of E-WOM on purchase intentions in local culinary
business sector. International Journal of Engineering & Technology, 7(2.29), pp.246-
250.
Helin, J. and Jabri, M., 2016. Family business succession in dialogue: The case of differing
backgrounds and views. International Small Business Journal, 34(4), pp.487-505.
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Krogstie, J., 2016. Quality of business process models. In Quality in Business Process Modeling
(pp. 53-102). Springer, Cham.
Kuzubov and et.al., 2018. Developing a supply chain subsystem to manage the process of
obstacle elimination for the innovative development of business entities. International
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Linnenluecke and et.al., 2015. Executives’ engagement with climate science and perceived need
for business adaptation to climate change. Climatic Change, 131(2), pp.321-333.
Mintii, I. S. and Soloviev, V. N., 2018. Augmented Reality: Ukrainian Present Business and
Future Education. ЗАСНОВНИК I ВИДАВЕЦЬ: КРИВОРIЗЬКИЙ ДЕРЖАВНИЙ
ПЕДАГОГIЧНИЙ УНIВЕРСИТЕТ.
Wieland and et.al., 2017. Business models as service strategy. Journal of the Academy of
Marketing Science, 45(6), pp.925-943.