EINSTITUTES EDUCATION CE-LC2122-Business (Higher) Section B John Morris Notes Period: 04 Academic Year: 21-22 Unit Six Complete Hl Hi ou ot SB) E Student Name: Anamaria Nita U Student ID: 140581 Unauthorised publcetondsribution or eprodacton of hese aotess prohibited,ZINSTITUTES EDUCATION 44 Morris 2021/2022 © Copyright: May not be copiedl/repreduced with permission from the author. Subject: Business TEACHER: John Moris gaa COURSE: Leaving Cert Business ACADEMIC LEVEL: Higher Level ACADEMIC YEAR: 2021/2022 TOPIC: Unit Six Complete fa Unouthorved pcan, dsubaton 0: repcediction of thee note prohibited,EINSTITUTES EDUCATION (© PART ONE : Categories Of Industry PL © PART TWO : Types of Business Organisations P6 i PART THREE : Community Development P27 i ‘© PART FOUR : Business & The Economy P37 | © PART FIVE : Business & The Economy p42 : © PART SIX: Social Responsibility of Business P50 : 6 exawauesnons: 055 ' | i i f i i i i t i i f ' i i i Ke i ‘s) tte dn {08K MORRS. USIESS LEAMING CRT 202. i BT Meee pie,EINSTITUTES EDUCATION Part One: Categories Of Industry ‘An industry is made up of firms all supplying similar goods and services. All industries can be classified into three main types: Please review textbook on Factors of Production. The Primary Sector The primary sector is made up of industries that utilise and exploit resources provided by nature. Examples include agriculture, fishing, forestry, and mining. Output produced can be sold directly to the consumer (vegetables, fish, etc.) or it can be passed on to other businesses for processing (zinc, lead, etc.) Primary industries may sometimes be called extractive industries. In recent years, farming has seen some growth, as worldwide. farm produce is exported .. ae Every country must exercise caution regarding its natural resources. Producers and consumers are aware that many of these resources cannot be replaced. Overfishing has led to quotas being introduced to preserve fish stocks. The same applies to forestry and mining: people are realising that the abuse of our natural resources will lead ultimately to their exhaustion. People are now aware that we need to use renewable resources eg. solar energy, wind farms, ete. The primary sector is important in Ireland because: + It provides many of the raw materials used in the secondary sector, e.g, meat © Itemploys many people, (8% of the workforce in 2011) who in turn pay income tax which is used to run the country and provide essential services. * Itexoloits natural resources that otherwise may not be utilised, e Mona. + It produces food, which otherwise would have to be imported, which in turn helps the BOP. (The Balance of Payments is a record of all financial transactions between Ireland and the rest of the world). © Much of what is produced is exported, which helps Ireland’s balance of payments. Exports brings money into the country, which helps the economy to grow, bogs/Bord na © ey naoredptein ton ‘on Moris Business Leaving Cer, 2021/2022 Srna ereZINSTITUTES® EDUCATION Trends in the primary sector include:- * There has been a shift by consumers to organic foods and so Irish farmers must adapt and produce such goods. This creates business opportunities for the primary sector. ‘+ Many farmers have diversified into new areas, e.g. forestry. There are grants and tax breaks for farmers who operate in this area, hence it is growing. Coillte's core purpose is to enrich lives locally, nationally, and globally through the innovative and sustainable management of natural resources. Colllte is a commercial company operating in forestry, land based businesses, renewable energy and panel products. The company employs approx. 1,000 people and was established in 1988. it owns ‘over 445,000 hectares of land, about 7% of the land cover of Ireland. * Ireland is now the largest beef exporter in Europe, exporting 90% of its beef. The Irish farm sector is experiencing a number of difficulties at present: * From a proportion of GNP in 1973 of 18% it has declined to about 2% at the present time, the rate of decline being particularly rapid during the Celtic Tiger years with rapid expansion in the nonfarm economy and with virtual stagnation in the farm economy itself ‘© With respect to exports the agri-food share has fallen from 40% in 1973 to approx. 10% of merchandise exports currently. + The work force in agriculture has declined and now stands at approx. 4.6% of total employment. + Brexit uncertainty is creating anxiety in the argi sector as Irish food could be subject, to taxes entering the U.K. Agribusiness is a term used to describe businesses involved in activities related to agriculture, e.g. meat processing, farm machinery, chemicals used in farming, etc. Many of these businesses are secondary industries. “The agri-food sector is one of Ireland's most important indigenous manufacturing sectors, accounting for employment of around 167,500 people. It includes almost 700 food and drinks Jirms throughout the country that export food and seafood to more than 160 countries worldwide. Economic activity in the agriculture and food sector produces « far bigger return than equivalent activity in other traded sectors of the economy. That is because agri-food companies source 74% of raw materials and services from Irish suppliers, compared to 43% for all manufacturing companies.” ie ai EINSTITUTES EDUCATION Employment in the Agri-Food Sector Composition of Empleymantin the Agel-Food sector, 2077 The Secondary Sector The secondary sector is made up of manufacturing and construction industries. Manufacturing changes raw materials into finished goods, e.g. food processing, electronics, chemical and pharmaceutical industries. Examples of secondary (Manufacturing/Construction): Electronics, food processing, chemicals, pharmaceuticals, building, development of the physical infrastructure, roads, bridges, tunnels, etc, Many industries in the secondary sector are indigenous, i.e., they are incorporated in Ireland, owned, and operated by Irish people, e.g., Supermac’s, Super-Valu, Flahavans, Glanbia, Paddy Power. Since the 1950's the manufacturing industry has grown significantly as Ireland actively encouraged foreign manufacturing companies to locate in Ireland. IDA Ireland (previously known as the IDA (or Industrial Development Authority) offer grants and lower rates of corporation tax to multinational companies (transnational companies) willing to set up a facility in Ireland. Examples include IBM, Nestle, Intel, etc. Manufacturing contributes significantly to Ireland's exports (at €78.5 billion in 2012) Today there are over 205,700 people directly employed in manufacturing. The Irish construction industry experienced unprecedented growth until 2008, due to the increased demand for property, both residential and commercial. This forced land prices; house prices and rents up. In any economy the growth of its construction industry usually reflects how prosperous the economy is: when economic prosperity abounds, the building industry is one of the first industries the benefit. Residential construction is generally the largest segment in the Irish construction industry accounting for nearly 40% of the industry's total value in 2014. The country’s growing population and decreasing unemployment (before Covid 19) along with the government's strategy to improve the supply of social housing is driving the residential market, (Ee : oS) isthe pala Aiton John Moris. Business, Leaving Cet, 2028/2022 sree he nae abdZINSTITUTES EDUCATION ‘Secondary sector is very important to the Irish economy: * Itcreates employment, direct e.g. processing meat, Tayto snack foods. © It creates indirect employment, e.g. market research, transport, distribution. © It generates tax revenue which is used by government to run the country * Much of the output produced is exported which helps the balance of payments. (records all money coming into and out of Ireland from trade: value of total exports minus value of total imports). ‘* _Itincreases the range and choice of goods for consumer, e.g. consumer electronics. It purchases much of the output produced in the primary sector, e.g. Flahavans purchase oats from Irish farmers to make porridge. Changing trends in the secondary sector include:- ‘* Significant reduction in the importance of the property sector in recent years. ‘* Some multinational companies have left Ireland and located in cheap labour economies abroad. * Employment in this sector has fallen by approx. 20% since the recession in 2008. * Globalisation of markets has made it more difficult for Irish firms to compete Internationally in manufactured goods. * Rising busines costs in Ireland can leave Irish firms uncompetitive on international markets. Irish inflation os approx. 5% (feb 2022). This makes it harder to sell Irish produced goods abroad. ‘+ The uncertainty of Brexit and the possible difficultly of trading with the UKis a cause for Irish manufacturing firms, The Tertiary Sector The tertiary sector is made up of industries that provide services. Examples include banking, transport, distribution, and communications. As an economy grows and develops, the tertiary sector usually grows at a faster rate. Importance to Ireland- * It creates employment: it is the biggest employer in Ireland-70 % of the workforce is employed in this sector * It provides many of the support services needed in the secondary sector, e.g. market research, banking. * It exports much of its output, helping the balance of payments, e.g. the purchase of market research by a foreign firm. * It generates tax revenue for government, which helps to fund essential services like justice, health, defence. ( : a oti aon eta Jot Mortis Business Leaving Cer, 2021/2022 radon tae es peedi EINSTITUTEO EDUCATION Changing trends in recent years:~ Ireland has a thriving financial services sector eg., IFSC, this creates employment and promotes Ireland's image abroad, Increased taxes such as the property tax and cuts in government expenditure on social welfare led to a fall in the disposable income of consumers. As consumers’ spending power was reduced the demand for the goods and services that businesses sell in the retail services sector has fallen. In recent months since restrictions were eased, the economy is showing signs of recovery which means more spending on goods and services leading to more tax revenue for government. Big multiples (large supermarket chains, e.g, Tesco) versus small retail outlets and the difficulty in competing. Smaller firms find it increasingly hard to compete. Growth in discount retailers e.g. Aldi, Lidl, TKMaxx. This impacts on smaller Irish firms, ie. harder to survive and less profits. Deregulation in some industries e.g. taxi industry. The removal of strict government rules and regulations, hence entry to the industry is easier, leading to more competition. Businesses in the services sector are facing @ decrease in footfall because of the challenges facing town centres due to competition from large suburban shopping centres and the restrictive parking regimes in operation. Expensive parking tickets, fines and the threat of clamping are driving people out of town centres where many service sector businesses operate. VAT increases lead to more expensive goods and services for the consumer which in turn causes demand to fall, thereby affecting business. For example, the volume of sales in department stores fell by 18.4%, and electrical goods fell by 12.0% as a consequence of the negative impact of the VAT rise to 23%. Increases in excises duties on tobacco products have led to an increase in tobacco smuggling. Excise duties on cigarettes continue to rise, increasing the incentive for customers to choose cut price illegal products sold on the black market. In 2010, Ireland’ retailers lost €896 million in turnover to the shadow economy. The growth of the ICT sector has led to employment opportunities. At a recent Intel Forum on Education, the CEO of Fujitsu treland said that 75% of ICT employers in Ireland have job vacancies. There has been growing concern at the rising skills, shortage in the ICT sector, a situation made worse by the low number of students opting for technology courses at third level. The growth of e-business, a method of buying and selling goods and services over the internet, is changing the dynamic of the services sector. Retailers moving to on- line operations include Tesco and Next. Many retail businesses are strugaling to fill job vacancies at the present time as the economy reopens after Covid 19 restrictions were eased ie : ey Uemithred pnt dats John Marrs. usiness, Leaving Cer, 2021/2022 rane he ae pedZINSTITUTES EDUCATION Part Two: Types Of Business Organisations ‘An entrepreneur must decide on the legal structure of the business he is setting up. There are three main options: @ Sole Trader © Partnership ‘© Private Limited Company Sole Trader A sole trader is formed each time an individual trades under their own name. The sole trader is totally independent and so he/she usually makes all the important decisions. Advantages of being a sole trader include the following: oe There are no requirements to be fulfilled under the Companies Acts. TF tfasole trader wants to liquidate the business, all he must do its pay off his creditors and cease trading. 1 Decisions can be made quickly by the sole trader, as there are no other people to consult. 1 Itis very easy to begin trading as the sole trader, i.e. itis easy to establish. (1 The sole trader would probably be in close contact with the employees and customers; therefore, problems can be easily identified and rectified. Disadvantages of being a sole trader include the followin; © The owner has unlimited liability and is therefore personally liable for any debts the business may incur. OF The sole trader may have difficulty managing all the functions of the business. C1 In the case of absence or illness of the owner, mismanagement may occur. 1 There is no continuity of existence, this means that when the owner dies the business effectively dies too. This can cause succession problems. CO Asole trader may have difficulty raising capital for the business, it is harder to get loans etc, as there may be only one person borrowing with few assets to offer as collateral 1 Profits are taxed at the same rates of income tax in the P.A.V.E. system. These rates are higher than corporation tax (tax on the profits of companies). It is less generally less tax efficient to remain as a sole trader. re ‘S ‘ Oe srrows ptt trttin Jenn Mors. snes, eign, 2021/2022 rtanf thee repreEINSTITUTES EDUCATION Partnerships A partnership can be defined as an association of persons carrying on business with the intention of making a profit. it may be formed by a verbal agreement among the partners, but most partnerships are more formal: this implies the drafting of the Deed of Partnership. Partnerships consist of between 2 and 20 people. ‘The Deed of Partnership would usually contain the following information: The name of the partnership. ‘The names of each partner. ‘The amount of capital put up by each partner. Rules and regulations regarding the admittance of new partners and the retirement of existing ones. Signing powers for cheques. Method of keeping accounts. Procedures for settling disputes. How profits and losses are to be shared among the partners. Advantages of partnerships include the following: There is greater access to capital. There may be a variety of talents and skills in the partnership. Partnerships are easy to form. The combination of partners may result in better decisions being made. Partners could specialise in different aspects of the business. Each partner may be exposed to less risk as losses incurred by the partnership are shared among the partners. ooooe isadvantages of partnerships include the following: Ina general partnership the partners have unlimited lablity. There is always a danger that disagreements will jeopardise/threaten the partnership. Authority is divided among the partners. ‘There must be a high degree of trust and co-operation between the partners if itis to succeed. Decisions may be delayed as all partners must be consulted. In most partnerships there is no continuity of existence. oo O04 n ee orton he ae eiEINSTITUTES EDUCATION Private Limited Company A company is a corporate body, which has a legal existence quite distinct from its shareholders. A company does not have a limited life span since ownership is represented by shares, which are transferable. This means that a company has continuity of existence and can continue to exist even if the original owners are dead. Once a company is incorporated, it has its own legal existence i.e, itis a legal entity. The consequences of this are: ‘The company can own property. ‘The company can sue and be sued, ‘The company can make contracts in its own name, The shareholders have limited liability. The company has all the powers necessary to carry out its objectives, vyVVY Characteristics of a Private ited Company There are between 1 and 149 shareholders. Shares are not bought and sold on the Stock Exchange, i.e. the right of transfer of shares is restricted. A company can begin trading once it receives its Certificate of Incorporation. Companies must publish information about their activities each year, i.e. profit and loss account and balance sheet. The amount of information disclosed depends on the size of the company, ie., its turnover, its gross assets, and the number of employees. The larger the company, the more information it must publish. Private limited companies have the word “limited” or LTD after its name. oOo 00 ° Setting Up a Private Limited Company ‘When forming a company most people get advice from their accountant or solicitor. The main documents that must be drawn up and lodged with the Registrar of Companies are: Memorandum of Association This sets out for the information of the public, the basic facts relating to the company. The Memorandum of Association contains the following. information: ‘© The name of the company. A person can set up company under their own name, e.g. Jim Murphy 110, or they may use a different name, e.g. Kickstart Motorcycles LTD or Stillorgan Carpets LTD. etc. The address of the registered office. @ ‘The area of activity in which the company intends to operate, these are called the objectives of the company and are usually kept as broad as possible. Note that a company cannot carry out any activity not included in its objectives: if it does itis acting “ultra vires” which means beyond its powers. © . ay tae baton dart John Morris. busines, Leaving Con, 2023/2022 resect Ne as keZINSTITUTES EDUCATION © Astatement that the liability of the members (shareholders) is limited. ® The authorised or nominal capital of the company. This is the maximum amount of money the company can raise by selling shares. © The signatures of the founding shareholders along with their addresses and the number of shares they are initially taking in the company. Note that in many cases the founding shareholders are also directors of the company. The Memorandum of Association must be printed, must bear the same stamp as if it were a deed, and must be signed by each shareholder/subscriber in the presence of at least one witness who must attest the signature. Articles of Association. The Articles of Association govern the internal workings of the ‘company. The Articles of Association form a contract between the company and its shareholders, defining their respective roles, rights, and duties. The following are some of the main rules and regulations contained in typical Articles: A statement of the authorised share capital of the company and its division into shares. The rights attached to those shares and their voting rights. Provisions relating to share issues, tratisfers, alteration of share capital, ete, Rules and procedures for the appointment and retirement of directors. The procedures and rules to be followed at meetings. Main powers and functions of directors. OOOOH The Articles of Association are signed by those who signed the Memorandum of Association. FORM A1-including the company address, a statement of authorised share capital and a list of people who will be directors. The written consent of each director to act as director and a signed statement that the company will comply with the Companies Acts, is also part of the Al form. ‘These documents are lodged with the Companies Registration Office (CRO) and assuming that the documentation is in order, a certificate of incorporation is issued. The company is incorporated at this stage and is therefore a separate legal entity. It must then hold a statutory meeting, where the memorandum and articles of association are presented, share certificates are given to shareholders, directors are appointed, and an accountancy firm is appointed to auditor the business. A bank account is then opened in the name of the business. ‘At this point, the company can begin trading. Note that all companies must have a minimum of two directors. A single shareholder company is not required to hold an annual general meeting (AGM). SEX (Gr | 9 EY rns rin arate John Mori Busnes, Laing Cort, 2021/2072 reef hes probedt EINSTITUTES EDUCATION These documents are lodged with the Registrar of Companies and within a short period the Registrar issues Certificate of Incorporation. This is essentially the birth certificate of the company. Once this has been received, the company is registered and can commence trading. Directors ] Directors run 2 company on behalf of the shareholders. In smailer companies, the directors are usually the owners, e.g. a family business. The main functions and duties of the board of directors are as follows: To formulate and implement company policy. To appoint a Managing Director. To run the company on a day to day basis. To formulate a dividend policy. To approve the accounts of the company, To act responsibly towards shareholders, employees, customers, suppliers, the government and the public at large. While many companies have full time directors (sometimes called executive directors), itis possible to be a part time director (sometimes called non-executive director). Companies ‘employ non-executive directors for the following reasons: Oooooo Their knowledge, skills and experience gained in other businesses may benefit the company. There is a certain amount of prestige in having a “famous” person as a non-executive director, e.g,, a politician or retired respected business person, etc. They may provide the business with valuable contacts. They may bring a fresh approach to the company as they are likely to be more objective in their views. A company secretary ensures that the company fulfils its legal requirements under the ‘Companies Acts. A company must make annual returns to the Companies Registration Office {CRO}, it must maintain an up to date list of shareholders and organise the AGM (annual general meeting) and EGM (extraordinary General Meeting) Advantages of Private Limited Companies include the following: The liability of shareholders is limited to the amount of money they have invested in the company. There is greater access to capital, as there can be up to 149 shareholders, It is usually easier for private companies to grow and expand, compared with sole traders and partnerships. Limited companies usually find it easier to borrow from banks and other financial institutions. (3 ‘0 xg Ye) ante en surtaton Jobn Morris, Business, Leaving Cert, 2021/2022 cree hea Epo4 a i | I i i ZINSTITUTES EDUCATION Companies are taxed at specific rates of corporation tax (tax on company profits) which is lower than the personal rates of tax that apply to sole traders and partnerships. Asa company grows it can employ specialists in various areas, e.g. sales, marketing, finance, etc. This could improve the performance and efficiency of the company. There is continuity of existence which means that the business can continue to exist, even after the death of the original founders/owners. Disadvantages of Private Limited Companies include the following: The profits of the company must be shared among the shareholders. M_ They must publish their accounts. Competitors and other interested parties can view information regarding the financial position of the business. There are many restrictions imposed upon limited companies as to how they may and may not conduct their business, i.e. they are governed by the Companies Acts 1963- 1990. Asa company grows diseconomies of scale may predominate which push up unit costs of production and may make the company less efficient. Control and ownership may be separate in some very large companies. The directors (who control the business) may not be shareholders while the shareholders who are'the real owners of the business may have very little say in the day to the running of the business. Directors are likely to want to plough back profits in the form of retained earnings to aid future expansion of the business while shareholders may want to see profits distributed in the form of dividends. This can cause conflict between the two groups. Public Limited Companies Public limited companies have the following characteristics: © There isa minimum of seven shareholders. The maximum number of shareholders is governed by the number of shares the company proposes to issue. Shares are freely transferable in most cases. The shares of the company may be quoted on the Stock Exchange and can therefore be bought and sold by members of public. Public limited companies have the letters ple. after its name. Public limited companies must file very detailed accounts with the Registrar of Companies each year. Public limited companies cannot commence trading until the Registrar of Companies issues a Trading Certificate. oe ¢ oF @ « iy nd nn, rts John Morris, Business, Leaving Cort, 2021/2022 grain ae pet5 EINSTITUTES EDUCATION Advantages of Public Limited Companies include the following: + They can raise capital by selling shares on the Stock Exchange. This can make it easier to grow and expand, + Public imited companies generally have a better public image and can attract top quality staff. + Public limited companies generally have a good credit rating and can borrow money at attractive rates of interest as they are seen as a low risk. + Public limited companies tend to attract better management than any other type of business. There is a certain amount of prestige associated with being a senior figure in a well-known public limited company. * Public limited companies can buy other companies by paying for those companies with its own shares. This can ensure that gearing remains low, which is good for the business. Disadvantages of Public Limited Companies include the following: mit is very expensive to set up a public limited company. ™ Public limited companies are obliged to comply with the Companies Acts 1963-1990, Ifthe company performs poorly shareholders may sell their shares which could cause share prices to fall. This could leave the company vulnerable to a takeover. The real owners of the business, i.e. the shareholders, are usually quite distinct from those who run the company, i.e. the directors, The shareholders may want profits to be distributed in the form of dividends while the directars may want to plough profits back into the business in the form of retained earnings. This can cause conflict between the ‘two groups. The media are quick to report any information about the company. Unfavorable publicity such as falling profits, falling sales, industrial relations problems, etc. can damage the reputation of the company. While sole traders, partnerships and limited companies are the most obvious ways a business can be set up and run, there are other ways a business can be established: Business Alliance ‘© Abusiness alliance is a relationship (an agreement) formed between two business enterprises to promote the business interests of both. The enterprises become allies and, although usually independent of each other, they will help each other in particular ‘commercial matters. Access to wider markets either at home or abroad can, for example, be achieved without a major investment of capital * Marketing alliances with businesses on the home and foreign markets are quite common, e.g. one enterprise may agree to sell or distribute another enterprise's products or services, ‘Aphone network entering into an agreement with Apple to sell/distribute their iPhones. (Own brand products work in this manner. ie) 2 iS. sane pice eration John Morris. Business, Leaving Cert, 2021/2022 Saarii i \ ZINSTITUTES EDUCATION + Promotional alliances occur where one business promotes another firm’s products. A washing machine manufacturer recommending a particular brand of washing powder, e.g, Daz Pricing alliances are used to share the other enterprise's customers using discounts, A cinema offering a discount to customers in @ nearby restaurant. ‘+ Distribution alliances involve one business offering its storage and delivery facilities to another's products. + Joint venture alliances could occur where a foreign investor that has a product to sell on the Irish market takes a stake in an irish business. The investor gets into the market and the Irish business adds to its product portfolio. Examples: Aer Lingus/ One World. A strategic alliance tends to be a medium to long term arrangement between companies. A joint venture is when two or more companies cooperate and share resources in the short term, usually to achieve a particular objective, e.g. the development of a new product. A joint venture can be viewed as a more temporary arrangement between two or more businesses. Advantages of a Business Alliance include the following: Companies can share research and production facilities which reduces the unit cost of the goods produced, @ The image of one company can help enhance/improve the image of any other company it enters an alliance with, e.g,, Apple. # Analliance can strengthen the presence of a business in the marketplace. Disadvantages of a Business Alliance include the following: © ‘fone of the companies in the alliance receives unfavorable publicity, it can affect any other company it is associated with. @ If one company in an alliance goes into liquidation, it can cause share prices to fall in any other company it is associated with. ® There must be a high degree of trust between all companies in the alliance, All too often, what starts out as 2 successful alliance ends up in the courts as companies battle it out for ownership of patents, trademarks, etc. Franchise Franchising involves the granting of a licence (a permission) by a franchiser (franchise creator) to the franchisee (the investor) entitling the franchisee to sell the product or service. The franchiser, i.e. the enterprise that owns the particular product or service, usually has already established a very large and successful business. The franchiser ‘would have a well-established name in the marketplace and an established reputation. aN : Ks idtdedadjesesre armas sot ons Busnes eave ert, 2023/2022 rein beh pheZINSTITUTES EDUCATION The franchiser licences other enterprises to sell its products or services but only under its name. Entrepreneurs can viably set up their own businesses and be their own boss ‘enjoying reduced risk because of the pre-designed format of the enterprise. Examples: McDonalds (catering), SuperMacs (catering) and Pizza Hut (catering). Advantages of buying into a franchise operation include the following: ‘* The costs involved in buying into a franchise may be lower than the cost of setting up a totally independent business. © There less chance of the business failing because the franchisee knows it has been done before and therefore it can probably be done again. * A franchise usually has an established name and a good corporate image which will act as a customer magnet. ©The franchisee has the ongoing trai ing and support of the franchisor and can rely ‘on the parent company’s advice and proven business ability. ‘* Competition may be limited as most franchisees are given an exclusive territory. © The franc! e can benefit from national advertising campaigns. Disadvantages of buying into a franchise operation include the following: The init I fee to operate a ‘© Ongoing fees which are expressed as a % of turnover or profits wi franchise is payable upfront and can be quite high increase as profits and turnover increases. * Exclusive purchase agreements means that the franchisee is dependent on predetermined suppliers. © Some franchisees may earn the business a bad reputation. © The franchisee can get into business for himself but not by himself and must accept the controls laid down by the franchisor. © The franchisee may be restricted in the contract as to whom he may sell his business to, or how he conducts his accounts. Franchise Archives - Camile Thai Takeaway and Delivery restaurants https://www.camile.ie/franchise/ Camile Thai Kitchen is Ireland's leading online delivery restaurant chain, The prepared meals delivered to the home market is exploding around the world, as broadband penetration - and time-poor urban dwellers - mean convenience is at a premium. Camile’s restaurant-quality healthy Thai food is cooked to order, by trained chefs, and delivered hot and delicious in 30 minutes. Opportunities exist in Dublin, Cork, Belfast and larger towns. ® Oy) outed poten dts rene erate peg 4 Jon Mess, Guslnes, Leaving Crt, 2023/20224 ae ZINSTITUTES EDUCATION WORLDWIDE BRAND PERFORMANCE “Th frst UBWAY® store was opened in 905 by Fred DeLuca nd Dr Peter Buck. It wee he fe ver 44000 aston nce han 10 cau. Toy, the UK ‘dln alone er are rors han 200 eatin “he SUBHIN/O tend the are Oe ‘hick onc Rosia (28R) ard ern yo eae cou 3 tno 25te The et SUSHI tha UK sore ‘epirsin 65. Sno bart SUBS {wand gn tan cecosteal rd ‘truest npn ws are ett eres ‘ow foehoae a bse pt ote ‘nese or, UNWAVe teneiaons bart tem eno ‘ne ve anc tts ayn wes veg ‘ol epg oct mt pas ‘neh anats neta, ag, pares inrating a mee 2016 Higher Level Question Note Part (b) ‘Domestic Environment Question 2 (A) In the Government's Budget 2016, the national mindmam wage was increased from 8.65 to €9.15, ‘an increase of 50 cont per how. Discuss the differeat ways in which the Irish Government affects the labour force in Ireland. (20 marks) () Analyse the benefits and drawbacks of franchising as a business stat-up option for a potential franchisee (20 marks) © Corporate Social Responsibility refers to how businesses interact with their stakeholders om a ily basis including investors, employees, suppliers, customers, and government. Discuss the social responsibilities of a business to any four stakcholders referred to above. (0 marks) (60 marks) — r repent espe1 ZINSTITUTE® EDUCATION Analyse the benefits and drawbacks of franchising as n business ‘start-up option for a potential Benctis:: ‘Tried and tosted formula —rediucod risk. Buying an established business/namebrand with & proven track meordlower tisk of fsitue in the markerplaca/Business ides is akeady successfl, Have sn existing eustomer baso which results in guaranteed sales. Have access to the experience and systems of the franchisorfean learn from other franchiseevbenefit from uniform approach, Low cosvcetraised/grcup purchasing power bulk discounts! ‘economics of seelican share costs such as marketing berworn sll franchises. Managerial taining and support provided by the franchisee. Brand recognition’ can use the name or logo which i already well established. Product imovation is shares, Part of a bigger organisation eg, benefiting ffom a ‘sutional/intemstional presence, ‘High statup cosis Gnitial franchise feoyRoystties axe paid ftom profits ‘No optioa for individual flan/estietions imposed/ack of freedom to ‘make ehanges or respond fo new competition’ Mast adbre to strict ‘regulotions/standards set by flanchiser, Othor franchisees might create negative imoge for the brand in the future due to poor perfomance or inability/maintaining the brands integrity may be dificult, a Co-operatives Irelands agricultural co-operatives, spearheaded by Horace Plunkett at the end of the 19th century, continue to be a driving force in employment and exports, Co-operative financial services, provided through the credit union movement, are accessed by a majority of the population. Co-operatives are very popular in the farming community. A co-operative is formed when a group of people pool their resources in capital, skills, and trade to improve their position by working together for their mutual benefit. 16 astra ert John Merss. Buses, Leaving Crt, 2021/2022 cregrtesen Basra pte,| | | | i } i 1 EINSTITUTES EDUCATION Producer co-ops deal with production and processing of farm output. A worker co-op Is formed when workers pool their resources and buy out the business they are working for, perhaps to prevent its closure. A community co-op involves people in the community coming together to improve the wellbeing of their local community. A credit union is an example of 2 financial co-op. A minimum of one share must be applied for to become a member of a co-op, and each member has only one vote irrespective of the number of shares he owns. The capital invested by the members receives a fixed rate of interest, irrespective of the level of profits generated throughout the year. Any surplus funds available are reinvested in the co-operative for the benefit of all members, or itis distributed among the members in proportion to the value and quantity of work done by each member of the co-operative. Co-operatives are registered with the Registrar of Friendly Societies. Many co-operatives have converted into public limited companies in recent years, e.g. Kerry Co-op is now Kerry Foods ple. The main reasons for converting to a ple are: MA public limited company can raise capital by selling shares on the Stock Exchange Public imited companies a high profile and are regularly featured in the media Public limited companies can attract top management. ™@ Public limited companies generally find it easier to borrow from banks and other financial institutions. ™@ A public limited company can use its own shares to pay for another company in a takeover situation. Advantages of a co-operative include the following: Each member has only one vote irrespective of the number of shares held. There Is a limit on the number of shares one member can own, e.g. €100,000 worth in the case of farmers or fishermen. Members have limited liability. There should be reduced incidences of strikes and other industrial relations difficulties as workers, owners and managers are all the same people. ‘© Members job satisfaction should be high as each member has a say in how the co- ‘operative is run. © The return received by the members on their investment is related to their quality of work, This should increase motivation and ultimately productivity. Disadvantages of a co-operative include the following: ‘© Some co-operatives are very large, and members may feel that they have no real say in their day-to-day affairs Many co-operatives have difficulty raising share capital from their members. Extra capital needed by co-operatives is often borrowed which leaves them more highly geared. uv eaesid eatin, ten on Moris business Leaving Cer, 2021/2022 ra a nate es ie iZINSTITUTES EDUCATION ‘* [tis difficult to value shares in a co-operative as they are not generally traded, Note that Credit Unions are a form of co-operative. People with a “common bond” e.g. living in the same area or members of the same profession, etc. can form a credit union. Members can invest surplus funds in the credit union who in turn offer low cost loans to those who need it. Advantages of a credit union include: Limited Liability. Members’ personal assets cannot be sold to pay business debts in the event of insolvency. Reduced risk for the members. © Members usually have a common band (e.g. residents in a local area). Members feel they are doing business with people they know. * Members have a say in how the business is run. Members are invited to the AGM and can vote on issues such as the dividend/ Decisions are made based on “One Member One Vote”. © Members’ savings are used for the mutual benefit of all members of the credit union. Once members have saved with the credit union they can borrow at fixed rates of interest. : 7 © Credit Unions can provide a wide range of low-cost banking services as they are not concerned with profit levels as much as commercial banks. There are no transaction charges on loans or saving accounts. They provide a safe place to save, and to borrow at reasonable rates, ‘* Every credit union is a ‘not-for-profit’ financial co-operative. Surplus income generated is retuned to the members asa dividend to savers and interest-rebate to borrowers or it may be directed to improved or additional services for members. The credit union also works in co-operation with the local community. * Credit Unions promote thrift and the use of members’ savings for the mutual benefit of all members. DUBLIN FOOD a Ceop oe Multinational/Transnational Companies A multinational corporation is a business enterprise with many branches in different countries around the world. A multinational may also be called a transnational. Examples include Shell, IBM, Smurfit, Ford, etc. Many multinational companies are global businesses: they have a presence is virtually every country. They have their controlling headquarters in ‘one country and branches in many other countries/ operate on @ world-wide scale. ‘Ss [z/ a 18 Ree) viautarsd ibe arb John Mortis Business Leaving Cert, 2022/2022 ergs esas wpej EINSTITUTES EDUCATION A transnational produces or markets goods in more than one country and it treats the world as a single marketplace and may move operations from one country to another in response to changing market conditions. Since the 1950s the IDA (IDA Ireland) has attracted multinational companies to ireland for the following reasons: 11 They invest heavily in the Irish economy. Investment in an injection into the economy and can create economic growth 1 They are large employers, which spends huge sums on wages, therefore increasing the standard of living for citizens. 1 They export much of their output. This is @ good thing as it brings foreign currency into Ireland and therefore helps our Balance of Payments. The balance of payments records all financial transactions between one country and the rest of the world. Total exports minus total imports. Multinational companies contribute to the income of the nation 2s a whole and therefore help improve our standards of living. Multinationals pay large amounts of money in taxation to the Exchequer/ (government purse) Multinationals improve the image of the host country (a country in which a branch is set up} which attracts further investment from abroad. Multinational companies may buy much of their raw materials in the host country which creates more jobs and helps Irish businesses to expand. ooogsa However, sometimes multinational companies are 1d for the following reasons: 1 They get favorable tax treatment in ireland, Le., they pay lower rates of corporation tax than native Irish companies. This gives them an unfair advantage over Irish companies. 1 They may use their size and threat of relocation to get bigger grants and other assistance from the State, 1 Much of their profits are repatriated, i.e. sent home to the parent country (their o headquarters}. They may engage in transfer pricing. Transfer pricing is a strategy used to show a high profit in a low tax area (such as treland) and a low profit in a high tax area. Transfer ing distorts the true contribution made by a multinational company in the host country. 1 They pay a significant amount of tax in Ireland, which is considered a good thing, however, if they leave, the tax revenue available to the government would fall significantly, which could trigger a recession as government is forced to cut back on spending. Multinational companies are attracted to Ireland for the following reasons: * Ireland has a highly educated, skilled, young workforce. ‘+ Multinational companies may be offered grants to locate in Ireland. ‘+ Multinational companies are offered lower rates of corporation tax than indigenous Irish firms, Cs » a er ae rats ae aahEINSTITUTE® EDUCATION + Ireland’s membership of the EU attracts non-EU multinational companies to Ireland. * Ireland is a stable economy, with a good industrial relations climate, helped by a stable political system, Reasons for the development of transnational companies in Ireland: ‘© Transport Improvements. The availability of faster and cheaper methods of air and sea travel has made it easier to supply markets world-wide. «Improved Tele-Communications. Improvements in communications have made it easier for firms to send and receive information. + Larger Markets. Many companies find that their home market does not offer the necessary scope for expansion. By selling to or setting up operations overseas they can maximise sales and can spread business risk/saturated home market. ‘+ Economies of Scale. Expanding abroad allows firms to achieve economies of scale and thereby lower costs per unit. This enables them to compete more effectively with larger competitors. ‘+ Removal of Trade Barriers. The removal of trade barriers has opened international markets. The World Trade Organisation (WTO) has facilitated agreements between countries eliminating or reducing barriers and freeing up international trade. Can locate a division in Ireland and sell products into the EU member states © Financial incentives from government agencies. These encourage foreign businesses to locate in Ireland at a reduced cost, Grants act as an incentive to foreign firms to set up in Ireland, ‘Taxation advantage in Ireland. 12.5% corporation tax rate. This is a very low rate ‘compared to much of the EU. Foreign companies are attracted to regions where tax rates are low as it increases their after-tax profits, which is good for the business. The Role of IDA Ireland in attracting FDI IDA Ireland is responsible for the attraction and development of foreign direct west ment in Ireland. Companies such as Google, Intel, Microsoft, and Face book etc. have all interacted with the IDA. Q IDA Ireland provides information and statistics on key business sectors and locations within Ireland. © IDA Ireland assists in setting up a business in Ireland and offers advice on property for international investors. © IDA Ireland introduces potential investors to local industry in Ireland, government, service providers and research institutions. © IDA Ireland builds links between international businesses and third level education, academic and research centres to ensure the necessary skills and research and development capabilities are in place, Q IDA Ireland develops clusters of excellence/equitable regional balance etc, ie fl 20 “g Me) Uscuthorived pubtetion, dritution John Morris, Business, Leaving Cert, 2023/2022 erence cereZINSTITUTES EDUCATION ‘While Ireland continues to benefit from FDI, there isa clear focus on ensuring its advantages are spread more evenly across the country IDA Ireland and the Government have placed a particular emphasis on growing investment in the regions, with regional development at the centre of the IDA$ strategy. This entalls nev regional investment targets in addition to developing clusters of investment within regions to sustain and attract more overseas companies from particuler industries. [At present, Ireland is home to over 1,600 overseas company operations that directiy employ ever 250,000 people. The country continues to attract businesses from sectors such as ICT, life sciences, financial services, engineering and business services. Many of these companies undertake strategic activities here such as advanced manufacturing end research and development, Ireland's success when it comes to FD! is partly reflected by the number ofthe worlds leading companies who have established operations here. State Owned Enterprises The Irish government and its agencies own a large number of important business enterprises in the country. These enterprises are called ‘public corporations’ or more often ‘semi-state bodies’ because the State has a direct interest in their operation, Ireland has these large State-Owned Enterprises for the following reasons: + To avoid the possibility of wasteful duplication of services e.g, if the country had three electricity companies, all in competition with one another, for a market that only one could easily supply. + Some of the services that the State businesses provide may not be profitable for the commercial company and therefore would not be provided. The State sets them up and runs. them in the common good, e.g., the national postal service run by An Post. + The supply of electricity, gas, and water to all remote areas of the country is viewed as having a social dimension and is expensive. The provision of the services is capital intensive and not profitable in the commercial sense. * To protect employment and to create employment. The State-owned enterprises sector in Ireland employs many thousands of people. + To protect and strengthen industries that are deemed to be important to the country. It is vital that the infrastructure of the state be well maintained since it is the backbone of a successful economic system, The economic infrastructure includes the national transport network, energy supplies for industry and domestic purposes, water supply, telecommunications networks, etc. * To benefit from very large-scale production facilities that can be financed by the State. With. a State-owned enterprise being the only supplier, prices are likely to be low because of state subsidy. However, semi state bodies are often «1 ed for the following reasons: Ml They are often accused of being inefficient- as they may not be profit orientated. ME They are usually heavily unionised and therefore employees may be inflexible and resistant to change. Many are run at a loss and are therefore subsidised by the taxpayer. Many are poorly capitalised as there is only one shareholder: the State. Much of their capital is borrowed which leaves them highly geared. Se a aL RE /vinionst tetin nti John Mors. Business, Leaving Cert, 2023/2022 rede ee aioeZINSTITUTES EDUCATION ™@ They may be bureaucratic and therefore overly concerned with red tape and procedures. Some people feel that decisions taken by some semi state companies are often for political reasons, rather than in the best interest of the economy. Privatisation involves the State selling off a semi state enterprise. It is the selling of a State- ‘Owned Company to private investors. The company is converted into a pic and the public are invited to buy shares in it. Examples include Eircom plc, trish Life assurance ple and Greencore ple. Aer Lingus was recently privatised. Arguments in favour of privatisation include the following: 1 The privatisation of state enterprises would raise much needed funds which could be used to reduce the national debt. Accompany requires investment if itis to remain competitive. By converting into a public company, the enterprise could raise capital on the stock exchange. 1 Privatisation spreads the ownership of a company among many people. Small private investors and employees of the company are likely to buy shares in the privatised company. Each shareholder is entitled to vote on company affairs, therefore the decision-making in a privatised company may be more democrati 11 Anewly privatised company may become more efficient. This is because the shareholders are looking for 2 good return on their investment and expect management to run the company as efficiently as possible. Anewly privatised company is freed from the bureaucracy and constraints associated with state ownership-there may be less red tape after a privatisation. Arguments against privatisation include the followi ‘® State companies have a dual purpose: to make a profit and to provide a service. A newly privately company may be restructured, and inefficient or loss-making services may be discontinued, ‘ Many state-owned companies use natural resources which effectively belong to the sing these companies, the government is asking the public to buy something it already owns. The costs associated with privatisation are usually very high. After these costs have been paid out of the proceeds of the sale, there may be very little money left to reduce the national debt, ete. The government would not receive the profits earned by the more profitable state ‘companies if they were privatised. Therefore, the State would lose a future stream of profits, ‘ Trade unions often oppose privatisation because it usually means the company will be restructured and jobs may be lost. @ : g Mei)/—sawthevsed pabikotion, Astebutian John Mortis. Business, Leaving Cert, 2021/2022 sree a ae ache oa| EINSTITUTES EDUCATION Note that the tern NATIONALISATION is the opposite to privatisation. It involves the state taking over the ownership and control of an asset that was previously in private ownership. Anglo Irish Bank was a ple and was nationalised. It was in danger of collapse and by nationalising it, it ensures continuity of supply of the service and it protects employment, Gov own a large percentage of AIB also. [ Indigenous Firms An indigenous firm is a business that is incorporated and run in Ireland. Businesses that are started here in Ireland and develop are indigenous Irish firms. An indigenous firm is an. Irish/ native/ locally based business that has been established and is owned/managed by Irish people/residents. They produce goods and/or provide services in Ireland. These Irish owners have a direct personal interest in the survival and growth of the firm. Its principal place of business is in ireland. e.g, Stira Stairs, Supermacs, Easons, Smyths Toys, Irish Times. * They create employment, both direct and indirect. + They pay taxes to the State, which helps to fund essential services in the country, e.g, schools, infrastructure. They export goods and services which helps the balance of payments. Export earnings help to create economic growth which improves standard of living in Ireland. ‘They attract foreign investment. Irish firms with strong brand names and a good reputation can attract foreign businesses to Ireland, which improves standard of living and creates further employment. The Role of Enterprise Ireland Enterprise Ireland has the responsibility for developing Indigenous Irish industry with an export focus. It is focused on helping Irish-owned business with 10 or more employees seeking to deliver new export sales. The Irish software sector is one area that Enterprise Ireland supports. Enterprise Ireland provides supports for both companies and researchers in Higher Education institutes to develop new technologies and processes that will lead to job creation and increased exports. Enterprise Ireland provides funding and supports for companies - from entrepreneurs with business propositions for a high potential start-up through to large companies expanding their activities and growing international sales. Provides equity investment for business. cs (Sy) ‘base John Morris Business, Leaving Cert, 2023/2022 sree eta pteEINSTITUTES EDUCATION Enterprise Ireland provides international offices that can assist in the growth of exports by providing marketing services/connections and introductions to potential customers overseas. Enterprise Ireland provides a programme of trade missions, trade fairs and knowledge events to give clients the opportunity to connect with existing and new customers and increase sales in international markets and exchange ideas etc. Extract from Enterprise Ireland Website Our Service our priority is the achievement of export sales growth from Irish-owned ‘companies. All our services are geared toward helping Irish companies win intemational sales. Our range of services is extensive, from funding, to making introductions in key international markets, Funding supports - a range of supports, for start-ups, expansion plans, and R&D business plans. Export assistance - including the provision of in-market services, local market information and the facilities of our international office network Supports to develop competitiveness - helping companies to become leaner to make them more competitive in international markets. Incentives to stimulate in-company R&D - new product, service and process development to ensure sustainability, and growth through the evolution of products and services, Assistance with R&D collaboration - with research institutions, to develop and bring to market new technologies, products or processes. Connections and introductions to customers overseas - we provide access to a global network of contacts - from heads of government to end customers. Many of our clients tell us that while the funding they received from Enterprise Ireland was helpful, the non-financial assistance, like introductions to experts, buyers and potential customers, was most valuable. Failte Ireland is the operating name of the National Tourism Development Authority of the Republic of Ireland, Failte Ireland replaces and builds upon the functions of Bord Failte, its predecessor organisation. Féilte treland’s priority is to support tourism and hospitality businesses survive and prosper, particularly at the present time as this sector has been particularly hard hit by the Covid 19 pandemic. The Local Enterprise Office (LEO) is the First Stop Shop for anyone seeking information and support on starting or growing a business in Ireland. The Local Enterprise Office provides advice, information and support when starting up or growing a business. With 31 dedicated ‘teams across the Local Authority network in Ireland, Local Enterprise Offices offers a wide range of experience, skills, and services. The Local Enterprise Office is for people interested in starting up a new business or already in business including entrepreneurs, early stage promoters, start-ups and small business looking to expand. Os 2 ee Joba Mots. Busnes, Leave Cent, 2021/2022 cerned the ae OBEINSTITUTES EDUCATION Changing Trends in Ownership Structure Business is evolving all the time. The following is a summary of the main changes in ownership and structure of Irish businesses in recent years: * Many co-operatives have converted into public limited companies and are now quoted on the Stock Exchange. Examples include Kerry Foods plc. and Golden Vale pic. «Many state-owned enterprises have been privatised in recent years and this trend is likely to continue. Private companies can now have up to 149 shareholders. The growth of multinational companies in Ireland continues. Franchising is on the increase and is very popular in the fast-food industry. Indigenous firms are continuing to grow and expand both here and abroad. Why a business enterprise might change its organisational structure. Change/Adapt: -Business organisations change thelr structure over time to adapt to changing CGrcumstances and market demands. The plans that the owners may have for the organisation far into the future and the vision of where the organisation wants to be, can be facilitated by choosing the most appropriate organisation structure to meet those objectives. Size: - The business enterprise may wish to grow larger. With size comes the burden of extra specialization where one individual simply cannot do all things and more people and expertise are needed, e.g. specialists in finance, marketing, production, etc. The move from a sole trader to a private limited company may be suitable for this purpose. Limited Liability- The desire for the protection of limited liability is another reason for changing structure. A business person wishes to protect family members, etc. from business risks and ensure a secure future for them, Personal assets must be protected to do this. Finance: - If more capital is needed for the development of the business, then a move from being 2 co-operative or a private limited company to being a public limited company might be necessary. Marketing: - The expansion of markets may be better served by joining a business alliance with another enterprise, either abroad or in Ireland, eg, for the distribution of the firm's goods. ‘Opportunity: - A new business opportunity, the opportunity to diversify into another line of business or enhance the existing businesses products may offer itself in the form of a franchise or an agency agreement. Privatisation: - The state may wish to free itself of business that can be owned and managed successfully by the private sector. It could therefore change its state-owned enterprise into a public limited company to enable the sale to take place effectively and offer the opportunity to the public to invest and become the new owners. Nationalisation: - The government take over a business that was previously in the hands of the private sector. This can happen if the business is in danger of collapsing and is vital to the economy, 25 ntnd pet, ttn Jn Mors. uses, Leaving Cert, 2023/2022 crm heta pe4 i EINSTITUTES EDUCATION Examples of the changing trends in ownership and structure include: ‘The Growth of Producer Co-Operatives in ireland: - The producer co-operatives are found mainly in the agricultural sector. The successful marketing of Irish food products abroad resulted in their expansion. They have grown with the expansion in the industry and have shared the benefits of EU membership with the agri-sector in general. Some producer co-operatives in the agricultural sector have become public limited companies like Kerry Foods PLC, Avonmore Waterford Foods PLC. Glanbia plc started out as two co-ops {Avonmore and Waterford). They ‘went public’ ie. floated and converted from co-operative status to public limited company status on the Irish Stock Exchange mainly because very large amounts of finance could be raised quickly on the stock exchange by the issue of shares to the public. The PLC structure is also put to good use in arranging and financing growth through acquisition. The move by the co- operatives to the public company model reduced their dependency on debt as a source of finance with its resultant high gearing, By converting to public limited company, it restored a healthy debt/equity ratio to the organisations and thus attracted investors because of better profit possibilities and laid the basis and foundation for healthy growth. Alliances and joint ventures have been formed with other big food producers In the EU with a view to exploiting market opportunities in the wider European and world markets. Irish food products are ‘marketed and sold not only in the accessible EU markets but in many other third countries where food products are needed, e.g. North African and Asian markets. Other examples include: SOLE TRADER >, PRIVATE LTD comPaNY Strategic Alliance Foblc United Company qea—_— Partnership Nationalisation 4 Morris 2021/2022 © Copyright: May not be copied/reproduced with permission from the author. Gs 2s ‘& ace at See treet he es prs: ' | | i | ZINSTITUTES EDUCATION Part Three: Community Development For any local economy to thrive, the people who live In it and have a stake in its future must also actively promote and develop i.e, to cause It to grow and expand it at every opportunity. Projects are undertaken for the benefit of the community and provided by community-based groups e.g. community councils, educational establishments, clubs ete. When the term local community development is used, it means that groups of people, help themselves and their communities to set up new enterprises, schemes, projects etc, and improve the local social and economic infrastructure of their areas. ‘+ These groups enrich the lives of the people in the locality both economically and socially Opportunities for personal and skills development ate available e.g, youth training, apprenticeship training, training for the long term unemployed etc. ‘+ They provide a future for their children In the local region. + Enterprises may be set up to provide employment in their local areas and thus develop their local economy. They may provide part time work. The establishment of business enterprises in a local community brings an immediate increase in the levels of employment both directly in the enterprise itself, but also indirectly in the services, required by the enterprise and its employees, e.g. transport, education, entertainment. ‘+ The money earned by the employees in the area will be spent in the area. Homes will be constructed for the families involved in the enterprise; young people will be able to make a living in their own community. Others will be given the opportunity to retrain. ‘+The local area will generally be wealthier, with better infrastructure and services. This in turn will attract others to the area and help it prosper even more. The general standard of living and quality of life ofthe local community is improved. ‘+ Plans can be laid for future development based on the attitudes, knowledge, and skills of the community for the benefit of future generations. ‘+ The co-operation and involvement ofall members of the community in the process of development enriches people personally, leading to happier and more fulfilled lives. ‘+ Local development programmes help to develop the skill of local communities to enable them to tackle unemployment and build the local economy. There are several local community initiatives in operation throughout Ireland today: Local Enterprise Offices (LEOs) have been created within Local Authorities and the 35 existing. County & City Enterprise Boards have been dissolved. These new enterprise offices will build on the significant achievements of the CEBs to date and will continue to offer an expanded range of supports. GR Ks (& Hd x! snouts eee John Mors Busnes, Lening Co, 2021/2022 pre enone2INSTITUTES EDUCATION Extract from LEO Website: © We provide direct financial supports to micro businesses*. Micro Enterprises are businesses with 10 or less employees (© Weadvise on a range of alternative funding options available (© We offer business information, advisory services and enterprise support © We deliver high-quality training to meet the needs of your business including; Start Your Own Business, Managing Your Business e.g., Marketing, Sales, Financial Management, Strategy and Business Planning. © We mentor you and your business with experienced experts. We guide you to the services most relevant to We support the growth and development of your business. ‘© We give you advice on local authority regulations, planning, accessibility, environment, procurement and other issues affecting your business. 0 Weconnect you with appropriate State resources for your business including relevant age ss such as; = Department of Social Protection: Enterprise Supports = Microfinance ireland: Business Loans — Revenue: Start Up Relief for Entrepreneurs — Education and Training Boards: Business Courses ~ Credit Review Office: When your bank has refused credit i i t i | i ; | | : i CASE STUDY: Hand Made Chocolate Aine Hand Made Chocolate: Right Recipe for Business Success We talk tactics, taste and truffles with entrepreneur and LEO client, Ann Rudden, as she takes us on a tour of Aine Hand Made Chocolate Nearly half a million bars of Aine Hand Made Chocolate are made every year and the company is becoming a household name for its boxed chocolates and hot chocolate swirl sticks. Set-up by Master Chocolatier Ann Rudden in 1999, the company employs ten people and has 25 ‘Great Taste’ awards to its name, Export markets already include the UK, the United Arab Emirates, Malaysia and Russia and the company’s on-line home can be found at www.chocolates.ie ce al ) 28 OD) xine ons Ti cece re he ae eeZINSTITUTES EDUCATION elses, een, Fann of dine Hand Made Chote ss Facts at a glance Entrepreneur: Ann Rudden, Aine Hand Employees: 7 full-time and 3 part-time ‘Made Chocolate Ltd Famous for: Branded artisan irish Local Enterprise Office Supports: Business expansion grant, chocolate for retail mentoring and Food Academy Turnover: Close to €1 million : Stradone Village, County Cavan, ‘Ann — you set up the business in 1999, so what can you tell us about those early days and how it all started? Even from the age of nine, my vision was always to own my own business. | studied bakery production ‘and management in college and after graduation, | worked for two highly respected chocolate ‘companies - Butlers and then Lily O Brien’s. | then worked for a raw materials company in technical sales, before starting Aine Hand Made Chocolate in 1999. We employ ten people today in our chocolate factory, exporting to five countries outside of Ireland. ‘What were the high points and low points in those early days, when you were a start-up? Creating my brand from scratch and working on new products and packaging were among the high points. Winning all those ‘Great Taste Awards’ in the UK, year after year, were also a great source of pride. | 29 e John Moris usinass, Leaving Cert, 2021/2022 Ye cnantrsapsreaton csasr Leaving Cer, a pute es ped