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What is Business?

What is Business?. An Introduction – Chapter 1. What is Business?. Is a lemonade stand a business? What about Roots Canada? Definition: an organization that produces or sells goods or services to satisfy the needs, wants and demands of consumers for the purpose of making a profit.

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What is Business?

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  1. What is Business? An Introduction – Chapter 1

  2. What is Business? • Is a lemonade stand a business? What about Roots Canada? • Definition: an organization that produces or sells goods or services to satisfy the needs, wants and demands of consumers for the purpose of making a profit.

  3. What is Business? • What things has business done for you today? • What businesses have your family interacted with within the last week? • There are as many different types of businesses as there are ways to describe them. Can you think of other ways to describe business?

  4. Business Goods Needs Profits Business Services Wants Demands

  5. Entrepreneurs • People who take the risks and start a business to solve a problem or to take advantage of an opportunity are called entrepreneurs. • Often entrepreneurs go into business to satisfy a need that is not being met in the marketplace. • An unsatisfied need is an opportunity • Businesses can NOT exit with the people to start them, manage them and work in them. • BUT.... Without people to buy their goods and services, businesses would have no need to produce anything

  6. Needs vs. Wants • Needs • an item necessary for survival • Examples? • Wants • an item not necessary for survival but which adds pleasure and comfort to life • Examples?

  7. MASLOW’S HIERARCHY OF NEEDS •  Everyone starts at the bottom and works their way to the top of the pyramid as they attain what is at their current level. • According to those who study needs and use this pyramid, less than 1% of us reach the top of this pyramid. • Most people get as far as the self-esteem level and do not progress from there. 

  8. Goods and Services • Businesses provide the goods and services to satisfy the needs and wants people have in their everyday lives. • Goods [tangible items] • Services [intangible ] • Some services are unpaid, such as those provided by volunteers doing community service work ... Including you {40 community service hours} • A not-for-profit Organization is a business that does not seek to make a profit. • Some businesses have two businesses under one roof like the Wal-Mart and McDonalds businesses. This is an example of co-branding. What benefits do these businesses share?

  9. Goods and Services • Examples? • What are some goods you might buy? • What about services you might use?

  10. Essentials vs. Luxuries • Essential Goods and Services are necessary for survival • What are some examples of each? • Luxury Goods and Services are not necessary for survival • What are some examples of each? • Can someone consider a luxury good an essential good?

  11. Activity • Exploring www.OttawaCitizen.com, see if you can find at least one examples of each of the following • Essential Good • Essential Service • Luxury Good • Luxury Service Make a screen cap of what you found and explain which one it is and why.

  12. Economic Resources • Goods and services do not just appear but must be created by employing economic resources. • Economic Resources are commonly referred to as the Factors of Production: • Natural resources • Human resources • Capital resources • Financial resources

  13. NON-PROFIT & NOT-FOR-PROFIT Not all organizations are for-profit. Non-profit organizations and not-for-profit organizationsdo not have the fundamental purpose of earning profits, although they may provide goods or services.

  14. NON-PROFIT ORGANIZATIONS Non-profit organizations raise funds for specific goals (i.e. research or support). These organizations operate to serve people and their communities. Only charities and charitable organizations are called non-profit.

  15. NOT-FOR-PROFIT ORGANIZATIONS • Not-for-profit organizations do not seek profit as their primary motive. • The purpose of operating is to meet specific needs of its members • Any surplus funds are used to improve the products and services offered to their members • A co-operative is an example of a not-for-profit. However, not all co-operatives are not-for-profit. • A co-operative is an independent association of persons who come together to meet their economic, social, and cultural needs and goals. • EX: child-care or housing co-operatives

  16. Human Resources • This is the resource from people working either mentally or physically to create the goods and services. • Sometimes human resources are referred to as Labour. • Some examples of human resources are: • Farmers, factory workers, construction workers, pilots, teachers, bankers, Web site designers and entrepreneurs

  17. Natural Resources • Natural resources are the raw materials that come form the earth, water and air that can be used in the production of goods and services such as: • Iron ore, gold, oil and trees • Fish, seals and seaweed • Oxygen, sunlight, wind

  18. Capital Resources • Capital resources generally last for a substantial period of time and often require a substantial investment by the business. • Include the buildings, tools and equipment, transportation equipment, and factories

  19. Financial Resources • Businesses also require the financial resources or money require to buy and pay for the natural, human and capital resources. This is MONEY • Often these financial resources are provided by the entrepreneur, investors and referred to as equity financing or by borrowed the money to generating debt financing

  20. Limited Resources • It generally takes all four types of resources to produce or to acquire the goods and services which people (consumers) need and want. • Because there are limited natural, human, capital and financial resources businesses are limited on what they can build and produce. • When resources become depleted, businesses are forced to find alternative economic resources • ie: when oil runs out what will the next energy source be?

  21. Producers and Consumers • Most businesses provide goods or services to satisfy consumer needs or wants • Computer manufacturer such as HP is a producer of a good while BWD Systems of Carleton Place is a service provider • People who buy computers or have them serviced are known as consumers. • Businesses which can attract more consumers to their place of business will have more opportunities to generate sales and make a profit.

  22. Being Both a Producer and Consumer • As a Producer: • When a computer store owner combines component parts to make a computer for sale • As a Consumer: • When the same store owner uses a personal computer for accounting, inventory, pricing and sales

  23. Activity • Describe a business with which you are familiar • Include: • Purpose (profit or non-profit) • Size • Describe the goods/services it provides • Explain the resources (natural and human) that go into the business

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