1.1.1 Nature of Business

Business

Decision-making organization that provides goods or services to satisfy a customers needs or wants (may or may not be for profit)

Inputs

Resources used by a business in the production process

Outputs

Final goods or services

Goods

Physical products that are tangible

Services

Intangible products

Entrepreneur

Individual who plans, starts, organizes and runs a business by taking financial risks

Added value

Selling price-cost of production

Needs

Basic necessities required to survive

Wants

A customer’s desires

Capital goods

Physical products bought by businesses to produce more goods or services (eg. machinery)

Human resources

Manages personnel of the organization

Finance

Manages the organizations financial accounts and money

Marketing

Identify and satisfy the needs and wants of the customers requiring market research, promotion, pricing, branding and distribution

Operations

Process of converting raw materials into finished goods for sale