Business 1.1

1.1: "What is a business?"

Define a business

a decision-making organization established to produce goods and/or provide services.

What is the purpose of a business

 Businesses exist to satisfy the needs and wants of their customers by selling goods and services, usually in return for profit.

4 factors of production

• Land 

• Labour

• Capital 

• Entrepreneurship 

Define Land

natural resources needed to produce goods and services

Define Labour

human effort used to produce goods and services

Define Capital

non-natural (or manufactured) resources used in the production process

Define Entrepreneurship

the knowledge, skills and experiences of individuals who have the capability to manage the overall production process.

4 Business functions

• Human resources

• Finance and accounts

• Marketing

• Operations management

Human resources

handles all aspects related to the workforce (business operations related to staff/personnel within an organization)

Finance and accounts

the responsibility for ensuring that the business has sufficient funds in order to conduct its daily operations (managing the organization’s money and maintaining accurate financial records of the firm’s funds)

Marketing

identifying the needs and wants of customers so that the business can provide goods and services to meet these requirements and desires, usually in a profitable way.

Operations management (production)

the process of making goods and providing services from the available resources of a business to meet the needs and wants of its customers (meet production targets, deadlines and certain quality standards)

Entrepreneurship

individuals who run their own business: both willing and able to take calculated risks by investing in a business start-up or commercial initiative.

Primary sector

business activity involved with the extraction of natural resources

Secondary Sector

business activity involved with the manufacturing or construction of finished products

Tertiary sector

business activity that involves providing services to customers

Quaternary sector

business activity involving the creation or sharing of knowledge and information