• To earn money for buying food, clothes and other things they need
• To feel good about themselves and be proud of their work
• To meet new people and make friends with workmates
• To have respect from others and feel they are somebody important

When workers are motivated, they work harder and do more work. This means the business makes more products and gets more money. Happy workers give better service to customers. They don’t want to leave their job, so the business saves money on training new people. Motivated workers have less accidents and get sick less often.

Maslow shows what people need in order of importance. Basic needs are food, water and shelter. Safety needs are having a safe job. Social needs are having friends at work and feeling part of the group. Esteem needs are getting praise and respect from others. Self-actualization is doing work that makes you happy and using all your skills.

An organisational structure shows how a business is organized and set up. It shows who is the boss of who and how different parts of the business work together. It also shows the chain of command from the top managers all the way down to the workers. The structure helps everyone know what their job is and who they need to report to when there are problems.

• Managers can spend time on more important work
• Workers feel more trusted and this makes them happy
• Decisions can be made more quickly
• Workers can learn new things and get more experience
• The business can work better and faster
• Managers don’t get too stressed with too much work

Planning: Managers decide what the business wants to do and make plans to reach these goals.

Organizing: Managers organize workers, machines, and money. They decide who does which job.

Leading: Managers guide workers and motivate them. They give instructions and make decisions.

Controlling: Managers check that work is done properly and targets are met. They compare results with plans and make changes if needed.

A sole trader is a person who owns and runs a business by themselves. They make all the decisions and keep all the profits. They are also responsible for all the debts and problems of the business.

Good customer service: Helping customers and being friendly makes them want to buy more and pay higher prices.

Good quality products: Making products that work well and last long means customers will pay more money for them.

Nice packaging and branding: Making products look attractive and having a good brand name makes customers think the product is worth more money.

Autocratic: The leader makes all decisions by themselves and tells workers what to do. Workers have no say in decisions.

Democratic: The leader asks workers for their ideas and opinions before making decisions. Everyone gets to take part in decision making.

Laissez-faire: The leader lets workers make their own decisions and does not control them much. Workers have lots of freedom to do things their own way.

Advantages:

• Keep all the profits for yourself
• Make all decisions without asking anyone
• Easy to set up the business

Disadvantages:

• Unlimited liability – you lose your personal things if business fails
• Hard to get money to grow the business
• Have to work long hours and do everything yourself

Advantages:

• Limited liability – owners only lose money they invested
• Easier to get loans from banks
• Business continues even if owner dies

Disadvantages:

• More paperwork and legal requirements
• Have to share profits with other shareholders
• More expensive to set up than sole trader

Opportunity cost is the next best thing you give up when you make a choice. For example, if you spend money on a new machine, the opportunity cost might be the training for workers that you could not buy instead.

A business has $10,000 and can either buy new computers or send workers on training. If they choose to buy computers, the opportunity cost is the worker training they gave up. If they choose training, the opportunity cost is the new computers they could not buy.

Sole traders have less money so they cannot buy in bulk to get cheaper prices. They cannot afford expensive advertising like big companies. They also have to do many jobs themselves so they have less time to focus on growing the business. Large businesses can offer lower prices because they have more money and resources.