Unit: Business Basics Note Taking Outline
DIRECTIONS: Complete the following outline during the class discussion. When our unit is completed, students will need to share this / submit this file to the teacher so students can receive credit for completing this note guide!
What Will You Learn?
What is profit, and what is the difference between a good and a service?
How do for-profit businesses and not for profit businesses compare?
What are the four functions of business?
What are the factors of production?
How do competition, the social environment, globalization, and technological changes challenge and provide opportunities to business owners?
What are the four main types of businesses?
Virginia Department of Education CTE Competencies Covered:
Exploring the Core Concepts of Business & Marketing
52: Identify the four types of business ownership.
54: Identify the functions of management and business.
55. Compare leadership styles.
Understanding the Role of Economics in a Global Economy
39: Identify the difference between needs and wants and goods and services.
41: Distinguish among the factors of production.
42: Explain the relevance of scarcity to economics.
51: Describe possible outcomes and other important aspects of world trade.
Investigating Technology Trends
67: Explain the influence of technology on employment, business operations, and global activities.
What Is a Business & How Does a Business Operate?
A business offers products to its customers to earn a profit.
Revenue = money a business brings in
Expenses = money a business pays out
Profit = the money left after paying expenses
Profit formula = Revenue - Expenses
(Overall take home $) (Money Made) (Bills to pay)
Goal is always for a business to operate so it makes a profit. If a business’ expenses are greater than the revenue, the company experiences a loss!
What do businesses do with their profits?
Profits are the driving force behind a business’ growth!
Not only does the business owner benefit from profits, profits can be used to:
Reward employees
Increase productivity
Expand business into new areas
Successful businesses…
A successful business benefits society by providing the goods and the services that consumers want and need!
Businesses provide employment opportunities for members of the community, which generates income and increases spending in the economy!
Successful businesses contribute to the quality of people’s lives by creating higher standards of living!
What kinds of products do businesses offer?
Goods = physical, tangible products a business sells that satisfy customer needs and wants
Ex: sandwich, car, television, clothes
Services = an intangible product that is bought or sold and satisfies customer needs and wants
Ex: haircut, car insurance, going to a play
Wants vs. Needs
Wants = Things we wish we could have
Needs = Things necessary for our survival
Services
United States economy is currently dominated by businesses in the service sector
By 2022, 79.1% of total jobs are predicted to be service sector jobs
Within the service sector, education, health care and social services, and business and professional services are the service sectors with the largest expected growth. These areas are expected to grow at double the rate of the normal economy over the next 10 years!
In this blank space, write down the businesses that you visited in the past weekend.
The businesses I visited this past weekend are Costco, Basketball gym, Kung Fu Tea, and Outlet mall.
In this table, classify the businesses based on whether they sold goods or services.
Nonprofit Businesses
Nonprofit organizations do not go into business to make a profit.
They provide a service to the community through educational, social, or political ways.
Money they make gets reinvested in the organization to expand the services they provide
4 Major Functions of a Business (Write down each function and we will create definition as a class)
Production - creating/making a product
Marketing - asking for the sale, telling people to buy your product
Management - all planning behind your idea
Finance and Accounting - what is done with the money
Resources needed by Businesses/Factors of Production
Factors of Production = resources a business uses to produce goods and services
1. Labor = people; human resources that contribute to a business’s production…can be physical or intellectual (ideas or knowledge)
2. Natural Resource = raw materials used to produce goods and services (could be coal, oil, soil, trees, water, etc)
3. Capital = 2 types of capital a business can use
Real Capital = physical facilities used to produce goods and services, such as office buildings and factories
Financial Capital=money used to finance a business
4. Entrepreneur = someone who assumes the risk of creating, organizing, and operating a business. Reward for an entrepreneur’s risk is profit that a business can make.
5. Intellectual Property = intangible assets developed as a result of people’s intellect and creativity. Could be patents, copyrights, and trademarks
6. Technology = resources such as smart phones, computers, software, and digital broadcasting that helps make businesses more productive and efficient.
Are resources limited?? YES!!!
Scarcity = humans have unlimited wants and needs and only limited resources
Scarcity means that choices must be made about how to allocate the resources!
Opportunity Cost = the loss of potential gain from other alternatives when one alternative is chosen; what you give up to purchase something else
Challenges and Opportunities Businesses Face
Competition = struggle between two or more businesses to attract scarce customer dollars
Although competition is challenging, it provides a continuous opportunity for businesses to grow and think of new ideas
Competition benefits the economy by:
Forcing companies to offer higher quality products
Forcing companies to lower prices
Promoting different brands
Making companies focus on customer satisfaction
How does a business compete in today’s marketplace?
Customer Satisfaction: Better products, better prices, better experiences, better services
Social Networking: Connecting with customers, communicating and building relationships, allows for quick responses and happier customers
Employee Empowerment: Empowering workers to deal with customer needs and being reactive to customers.
Intellectual Property
Opportunities for Businesses
Social Environment = interconnected system of demographic factors that can change and affect the marketplace for businesses.
Social, economic, and political movements and trends are constantly changing the social environment of the United States and businesses must adapt.
3 specific trends that businesses are currently adapting to:
Aging Population
Increasing Workforce Diversity
The Green Movement
Globalization = a movement toward a more connected world economy; the movement of products across international borders
Globalization Opportunities:
Greater profits
Increased markets
Offshoring
Globalization Challenges:
Greater competition for business and workers
Technological changes currently play a HUGE role in the business world! (Think back to your pizza articles!)
Technological Opportunities:
Business more efficient and productive
Easier tools of communication
E-commerce is well established
Allows small business the chance to be global
Technological Challenges
Keeping up with the pace of growth (Expensive)
Time consuming
Four Main Types of Businesses (All businesses fall into one of these categories)
Local - relies on local consumers
Regional - wider area than local but not national or international
National - several locations throughout the country
Multinational - (International) - operations in more than one country; leaders in the movement called Globalization (One World Marketplace)
(We will discuss types of business ownership in a different chapter! Don’t get confused!)