Leeds Met India, Bhopal Organization & Environment 2009 10 Module tutor: John Embery, Anurag Dugar

Assignment - Barclays Case Study

Name - Vikrant Sharma (77080645) Course BA (Hons) International Business

Ans 1- Business means an activity involving manufacturing or buying of goods and services, for the purpose of selling or exchange so as to earn profits. The various forms of business organizations are as follows -

Sole Proprietorship
A Sole Proprietorship business is one which is exclusively owned and managed by an individual who takes all the risks associated and thus the profits as well. For e.g. a retail shop, hair salon etc. Benefits Ease in setting up and shutting down the business High level of freedom and thus quick and effective decision making Easy to maintain secrecy and confidentiality of the business information

Limitations Liability of the owner is unlimited which means he might also have to sell his personal assets to clear any outstanding dues. Limited life of business Limited resources and funds

Partnership
According to Indian Contract Act, Partnership is the relationship between persons agreeing to share the profits of the business carried on by all or any one of them acting for all. Benefits Ease in formation and shutting down Decision making is highly balanced and efficient Large amount of funds than sole proprietorship business Sharing of the involved risks

Limitations Unlimited liability of the partners Differences in thinking and opinions leading to conflicts Resources maybe limited due to restrictions on number of partners

Company
A company is an association of persons formed for carrying out business activities and has a legal status and identity independent of the associated members. Benefits Shareholders have a limited liability Existence is perpetual Highly professional and effective management Large financial resources and thus high scope for expansion

Limitations Highly complex formation process Oligarchic management Various rules and regulations Delay in taking decisions

Ans 2 The main budget factors that a business that a business will have to consider before setting up are: Anticipated costs of the business These include the various costs involved in setting up and managing the business like administration costs, legal costs etc. Estimated returns It involves anticipating the revenue of the business in advance to get an idea about how much funds would be required or clearance of future debts.

Projected Cash Flows This is required for the purpose of knowing in advance whether the revenues earned would cover the expenses involved in the business. Assumptions A budget plan also needs to make some assumptions about the variable factors involved in the business operations, like the changes in the interest rates and tariffs or sales level.

Sources of finance It involves deciding about the source of finance for raising funds and analyzing the benefits and drawbacks of each source.

On similar basis, Tim ONeill, the founder of T&T Vision, have had to consider the above discussed budget factors like the projected costs and revenues, deciding on the sources of finance and the associated cash flows.

Ans 3 Finance is required to set up a business, to manage it and to diversify it whatsoever the size and type of business maybe. The various sources of finance available to start a business are: Bank loans One of the most common source of finance, it involves borrowing money from banks at pre determined interest rates and payable in installments. Overdraft A short term source of finance, it is a facility provided by banks; extending credit to the account holder up to a certain limit. Leasing It is an arrangement wherein the owner of a capital asset allows the other party to use the asset in return for a payment on periodic basis. Trade credit It is a mutual agreement which involves one trader providing goods and services on a credit basis to another trader. Owners Capital Another basic source of finance are the owners personal funds and assets which can be brought to use to setup and manage the business operations. Hire Purchasing Similar to leasing in all aspects, except the ownership of the asset being transferrable to the other party on paying the final installment.

An idea that can be turned into a business proposition could be starting a desktop publishing service offering specialized services in making and creating business presentations and proposals for the various business organizations as today the importance of a business presentation cant be neglected. The business doesnt require much finance and can be carried out from home itself and bank loans can be taken or assets can be bought on hire purchase basis for the purpose.

Referencing

Barclays: Supporting new business start-ups (2009) The Times 100 (Internet) (n.d.) Available from <http://www.thetimes100.co.uk> [Accessed 16th December2009] NCERT (2006) Business Studies. 1st edition. New Delhi, National Council of Educational Research and Training Publication Department. Carter, J. & MacDonald. N, & Cheng, D. (1997) Basic Finance for Marketers (Internet), Rome, Food and Agricultural Organization of UN. Available from <http://www.fao.org/docrep/W4343E/w4343e00.htm#Contents> [Accessed 17th Dec. 2009]