Lesson 4

1. Aj Jamie
4/12

2.  Founded: To set up or create a company or
organisation.
 Commission: A fee for services rendered based on a
percentage of an amount received or collected or
agreed to be paid. EBay receives a small
commission on every sale, less than 1%.

3.  What type of Business is EBay?
 It is a service business
 Provides an auction service to customers.
 It is also a retail business
 EBay also has online shops selling a variety of goods.

4.  Overhead Costs: refers to an ongoing expense of
operating a business. The term overhead is usually
used to group expenses that are necessary to the
continued functioning of the business, but that do
not directly generate profits.
 Typical examples of overhead expenses include rent,
utilities and permits to operate a business.

5.  Profit:
 Profit = Revenue (money coming in) minus Costs (money
going out)
 EBay:
 Revenue: $1032 million ($1.032 billion)
 Costs: $509 million
 $186 million
 Profit: $337 million

6. Here are some basic ways to run a
business.
Sole Proprietorship
General Partnership
Limited Partnership
Private Limited Company
Public Limited Company
Franchise

7.  Janet Peters owns a small noodle shop in
Central festival. She employs 2 members of
staff, that work for her.
 The Business is named PK NOODLES.
 Janet pays all expenses herself and receives
any profit the business makes. However, she
must cover any losses the business may run
up.

8.  As Janet runs this business ALONE this
business is known as a Sole Proprietorship.

9.  Two years later and PK NOODLES is very
successful. She decides to open another noodle
shop in Big C.
 Janet finds it hard to the accounting for PK
NOODLES, and a friend John Martins decides to
invest in the business and become an equal
partner.

10.  Janet concentrates on running the restaurant
whilst John takes care of the accounts.
 As TWO (or more) equal partners control the
business, it becomes a General Partnership.

11.  PK NOODLES becomes even more successful. A
new noodle store is opened in Hat Yai.
 Janet and John decide to appoint 3 Limited
Partners, who each buy a small share in the
company, but have limited control.

12.  PK NOODLES is owned as follows:
 Janet - 44% (General partner)
 John - 44% (General partner)
 3 Limited partners – 4% each
 Janet and John are still the MAIN owners of PK
NOODLES, but the limited partners are
responsible for their share of any loss the
company makes. They will also receive a share
of the profit!

13.  Staff, friends and relatives see the success PK
NOODLES is having.
 Some ask Janet and John if they can purchase a
SHARE in the company.
 By purchasing SHARES in the company these people
can make a profit if the business is successful.
 However they can lose this money (from buying
shares) if the business fails. However they ARE NOT
responsible for any loss the business may suffer.

14.  Janet and John sell 10% of their shares each.
 10 people buy 2 shares, each worth 1% of the
company.
 Janet and John are now the DIRECTORS of PK
NOODLES, the rest of the owners become
SHAREHOLDERS.
 PK NOODLES is now a Private Limited
Company.

15.  PK NOODLES is one of the most successful
companies in Thailand. The DIRECTORS and
SHAREHOLDERS think they can become an
international business.
 However to do this they need investment so
they decide to sell shares to the public.
 To do this they must register the company as a
Public Limited Company.

16.  SHARES for PK NOODLES are traded on the stock
market.
 The business now has a responsibility for it’s
shareholders.
 The value of shares will go UP if the company
does well, or DOWN if the company is doing
poorly.

17.  Franchising is a method of doing business where a
business (franchisor) licenses (allows) proven
methods of doing business to an individual or
business (franchisee) in exchange for a payment,
fees and a percentage of sales or profits.
 For example, KFC in Thailand is run as a franchise
business. A person will pay money to KFC in
America and are given training, advertising and
recipes in exchange.

18.  We have looked at six different types of
business. Your task is to do some research and
find one example of a local or national
business for each different type.
 I want to see that you understand the
different types of business. If you can’t find
examples use examples from your own
experience. What type of business do you
think your local restaurant is? How about your
local supermarket?
 I want to see a few sentences explaining your
choices in a PowerPoint presentation.

19. This is a general partnership.
 This business is owned equally by Pedro Vialli and
Somchai Samlikul. Pedro is the chef whilst Somchai
looks after the accounts and promotes the restaurant.
They employ about 4 waiting staff and a cleaner.
Pedro’s Pizza Paradise – Patong