Principles of Business Term #1

Business.

Business is the process of trading goods or services to make a profit.

5 Disiplines

-Accounting/Finance

-Marketing

-HR

-Management

-Operations

How do the 5 disciplines work together?

The 5 disciplines work together by integrating their functions to achieve a company's overall goals. Each discipline contributes its expertise, ensuring financial stability, effective marketing, human resource management, efficient operations, and strategic management.

Inter disciplinary collaboration.

Collaboration between two departments.

Focus.

The main goal of a company.

Risk.

Is always present and has to be accounted and planned for.

Business basic.

how do we turn a business idea into sustainable profits?

Business model steps.

1. How do we create value?

2. Who are we creating value for?

3. How are we delivering value?'

4. How can we make a profit doing that?

Business model definition.

describes how a company creates, delivers, and captures value.

Business model extra.

-view is like dissecting a business it allows, you to see more.

-It’s like the recipe for profits.

Value Proposition.

-why should people care?

-why should people buy this product?

-the bridge of the needs gap.

Customer segemnts.

the same as a target market, you can not serve everyone. allows more precise decisions.

Revenue streams.

what is the plan to make money?

Key resources.

what is really needed(bare bones) to produce profit?

Fiancial.

All covered in accounting:

Income statement-

-all statements aside from statement of changes in equity.

-Profit/loss=total revenue - total expenses

balance sheet-

-assets=liabilities + equity

statement of cash flow-

-operating activities

-investing activities

-financing activities

-what is the actual cash amount in the business?

-is the actual value being added to the company.

Fixed costs.

Something that will never or rarely change price with supply use.

ex) a lease

variable cost.

something that changes price with the volume of supply used.

ex) electricity, gas, supplies.

Where does money come from?

-Personal investment by owner

-borrowing on property(morgage)

-Love money(personal relationships)

-partnerships

-group investors

-crowd funding

-grants(government)

-business loans

Supply

how much a company is willing to provide for a price.

demand.

how much customers are willing to pay for a product based on things like scarcity etc.

supply and demand dance.

high demand + low supply = higher price

low demand + high supply = low price

supply and demand

help find proper market price.

direct competition

the same or similar product

indirect comeptition

different product same needs gap

alternative competition

a different way to fill the needs gap.

Business competition methods.

1. price

2. quality

3. service

4. innovation

5. convenience

Competitive responses

1. price matching

2. feature improvements

3. marketing campaigns

4. new market entry

Stakeholders

Anyone who affects a business.

Ex) owner, employee, customers, suppliers, shareholders, etc.

Types of business ownership:

-Sole proprietorship

-Partnership

-Limited liability partnership

-Corperation

Sole proprietorship

-only one owner

-not continueous

-full legal liability

-easy to set up

Partnership

-Two or more owners

-Not continuous

-Full legal responsibility for all

-easy to set up

LLP

-Two or more owners

-Not continuous

-Full legal liability for selected parties, limited to none for others

-easy to set up

Corperation

-indefinable numbers(shareholders)

-continuous

-no legal responsibility, company is legally separate.

-Harder and more expensive to set up

Organizational innovation

Successful implementation of new ideas, if companies don’t evolve and adapt they die.

Business innovation

The most successful businesses are ones who create value through innovation.

Time management

how to properly manage and use time, as there is only so much in a day.

Tips for time management

1. create calendars

2. build a personalized schedule

3. set reminders

4. use tools that work for you

5. prioritize

6. make time to have fun and for yourself

7. find support

8. be realistic and flexible

5 D’s

1. Do it now

2. Delegate

3. Delete it

4. Designate a time

5. Document it

Personal development

Activities that develop a persons capabilities and potential. aiming towards personal growth.

Steps in personal developemnt

• take action

• self-assessment

• self discovery. strengths and weaknesses

• goal setting

Values and beliefs

what we think about life and what is important to us.

Ethics

a framework of principles that governs how we act

SWOT

• strengths

• Weaknesses

• Opportunities

• Threats

personal vision statement

• what truly motivates you?

• set long term goals

• vision statement

Personal branding

Is who you are and what you want to be seen as, presenting your value intentionally in a strategic way. it is determined by the amalgamation of how people view you.

Personal branding is not:

• Narcissism

• Shameless self promotion

• Success packaged

• A sham

• A tagline

• Bragging

Why is personal branding important?

• how will people talk about you when you are not around?

• Gathers opportunities

• Professional identify

• increased visibility

• enhanced prospects

• builds trust

Reasons teams are used:

• matching skills to tasks

• too much work for one person

• Different group perspectives

• Simulations work

• decisions benefit from more perspectives

4 things for a successful team

1. Clear goal

2. Clear responsibilities

3. Way of working

4. Accountability

SMART

Specific

Measurable

Attainable

Realistic

Timely

Clear goals

what are you working towards and what are the priorities? is it SMART? did everyone agree?

Have clear responsibilities (RACI)

Responsibility

Accountability

Consulted

Informed

Ways of working

• communication

• information sharing

• decision making

• disagreements

• deadlines

Accoutnability

• assign clear owners

• set deadlines for tasks

• visible progress

• follow up on missed commitments

• address problems

Set expectations

1. communicate important values

2. set collective goals

3. agree on “ways of working”

4. Determine responsibilities and roles

Stages of team development

1. Forming

2. storming

3. norming

4. performing

5. adjourning