For P4, I will be
describing the legal and financial aspects that will affect the start-up of the
business. In this document. Below are the Legal and financial aspects that will
affect the start-up of my business:
Health and safety is
an aspect that every business needs. Health and safety are regulations and
rules that are put in place to prevent accidents or injuries in workplaces and
public environments. We will need these
regulations because it is essential that all the staff in our business stay
safe and that there is very slim chance of anyone being injured. By having
health and safety it will have a positive effect on our business because our
business will be able to run smoothly and safely.
The legal status of
any business depends on the type of business and size of business that is being
set up. The different types of legal status include Sole trader, Partnerships
and limited company. The status of our
business is a partnership. This is similar to sole trader, however, the
ownership is shared between the partners. The partners, who are the people
involved in the business will have a document that shows the rights and
responsibilities of all the partners that are involved in the business? The reason we have chosen to be in a
partnership is that all the partners will share the rewards, risks, and
responsibilities. This means the people in the business will be able to help
each other and develop their careers and they also help with the risks.
Record keeping is categorising
and storing all the papers and files that are related to the company and its staff.
We will also be using the record keeping method in order to keep track of all our
relevant papers because they can be useful in the future for example, providing
references for our staff and customers, also what the business has spent money
on. Records enable businesses to keep track of all expenses and profits because
its helps monitor the company’s growth or lack thereof.
Contracts duties are
there to be followed by the company and the staff to keep both parties protected.
Contract duties need to be performed for example if a company agrees a certain
wage with a worker the they are obliged to pay and on the other hand the worker
needs to do the work that’s been put up for them. Relating this to our company
we will also need to follow these rules, as the legal status of our business is
a partnership we will need to divide the work load among all the partners, so
that everyone has equal responsibilities.
A license is a
document that you receive from an authority to poses or use things or carry on
trade. All businesses have a license but different businesses will have
different types of licenses depending on the sector that business operates in. For example a restaurant will need a
different license than a clothing business. We need business license to make
sure that our business exists as a legal entity in the eyes of the law.
Equipment is the
things that we need to do our jobs. As our
business is a clothing brand, we will need more equipment in order to produce
and sell our clothes. The equipment that our business needs is the following: shelves,
clothing, packaging etc.
Profit and loss are indicators
of how well or badly a business is functioning, for example if a business is losing
money then they know that they are in a bad position therefore it’s an
indicator that they need to change things about the company. For example they
could increase the price of their products to negate loses.
Pricing policy is what companies use to
decide the price points for their products and services in retail and wholesale
markets. We will also be using this strategy to set the prices for our clothing.
These prices will not be fixed and will reflect the markets and will change as
the company grows.
A Suppliers business
is to supply other businesses with product and services to their stores. Most businesses
have a supplier of some kind, where they get their services and products from. We
will also have a supplier that supplies us with materials and packing for our
products, we will also need other services such as website.
Employing staff is
hiring people with a particular set of skills that we need to run our business
to its optimum level and there is a team within our business that deals with
such tasks which is the HR team. Their job is to hire these people and show
them how we run the business and to also deal with things like employment contracts.
Running costs is the
amount regularly spent to operate a business. Running costs include salaries,
utilities, and rent. Like other businesses, my business will also have running
costs. I will need to make sure I pay these costs on time. In addition, I need
to generate enough profit, in order to pay for the running costs. Some running
costs are paid monthly such as rent and salaries, therefore I will need to stay
alert and make sure the right amount is paid.