The purpose and nature of a business

What is a business?

an organization or entity engaged in commercial, industrial, or professional activities, aiming to generate profit through the provision of goods or services.

What is a good?

a tangible/physical product that satisfies consumer needs and can be bought or sold. e.g. a car

What is a service?

an intangible/non-physical product that provides value to consumers by fulfilling their needs or wants. E.g. a bus journey

What is a customer?

an individual or entity that purchases goods or services from a business, seeking to fulfill their needs or desires.

What is a consumer?

Someone who uses goods or services produced by a business.

What are people who start businesses called?

entrepreneurs

What is an entrepreneur

A person who takes risks in the hope of rewards.

What are some examples of the objectives of becoming an entrepreneur?

• Want to be their own boss

• Want to keep all profit

• Want a job and need a secure employment

  • Have an interest or hobby.

What are the factors of production?

Capital

Enterprise

Land

Labour.

What is an opportunity cost

What we give up or sacrifice whenever we decide to do anything.

The alternative given when a decision is made

What is interest?

The money paid by banks as a reward to attract people to save with them.

What are some examples of characteristics of an entrepreneur?

Innovative - Good at spotting opportunity

Risk takers - taking the risk that their idea is going to work

Hard-working - Prepared for struggle

Organised - Good at organising material

What is the primary sector?

Organisations that extract the earth’s natural resources e.g. Farms, oil exploration, fishing fleets.

What is the secondary sector?

Organisations that use raw materials to manufacture goods or construct items e.g. printers, manufacturers.

What is the tertiary sector?

Organisations that provide services to consumers or other organisations e.g. fast-food, estate agents, delivery.