Business Skills and Intro Flashcards

Business Skills: The Art of the Handshake

A handshake serves as a fundamental business skill and often provides the first impression in a professional setting. To understand what constitutes a successful interaction, one must recognize the characteristics of poor handshakes. Specifically, there are four common types of ineffective handshakes to avoid: The Limp, Dead Fish handshake, which lacks firmness; The Close Shaker, characterized by a person standing too near because they essentially desire a hug; The Bone Crusher, which is overly aggressive and physically painful; and The Never-Let-Go, where the individual continues to hold on while engaging in tangential conversation.

An example of the awkward nature of a Never-Let-Go shaker is illustrated by a person who continues a long anecdote while still holding your hand, such as saying: "So then I said 'get your baby off my lawn or I'll hit him with the pressure hose again!' So what does she do? She calls the cops! The nerve of some people… Hey do you like raisins? I think raisins are really neat! Better than grapes, grapes are for cups. One time I stuck a bunch of mine on my…" Proper business etiquette requires practicing self-introductions with a firm, professional handshake, a skill utilized even by world leaders.

Defining and Classifying Businesses

Business can be defined and described in various ways depending on its primary characteristics, including its purpose, size, structure, and the role it plays within its community. To understand the diversity of the business landscape, one can look at several major entities and categorize them accordingly. Examples of such entities include Amazon, Burger King, Apple, Unicef, Ikea, Heart and Stroke Foundation, McDonalds, Toronto Transit Commission (TTC), Walmart, Bell, Goodlife Fitness, and Longos.

Businesses are generally divided into three primary types based on their financial and organizational objectives: For-profit, Non-profit, and Not-for-profit organizations. Each type operates under different financial rules and serves distinct functions within the economy and society.

For-Profit Business Fundamentals and Financial Literacy

The primary goal of a for-profit business is to generate profit by supplying goods or services that meet consumer demands. Understanding for-profit operations requires a grasp of several key financial terms and formulas:

Profit (or Loss) is defined as the income that remains after all costs and expenses have been paid. Revenue represents the total amount of money earned from sales before deductions.

Expenses are the expenditures or payments involved in the active running of a business and the assets that are "used up" during operations.

Cost refers specifically to the amount of money required at each stage of production or the provision of goods and services, such as the purchase of raw materials.

The fundamental equation for determining financial success is: $\text{Profit (or Loss)} = \text{Revenue} - (\text{Expenses} + \text{Costs})$

As a concrete example, consider a business that sells backpacks. If the total sales (Revenue) amount to $550\,USD$, the cost of buying the bags is $200\,USD$, and the cost of applying logos to those bags is $120\,USD$, the financial breakdown is as follows: $\text{Revenue} = 550\,USD$$\text{Total Expenses/Costs} = 200\,USD + 120\,USD = 320\,USD$$\text{Profit} = 550\,USD - 320\,USD = 230\,USD$

When a business successfully generates profit, the funds can be used to reinvest in the company for expansion, improve existing goods and services, or provide the owners with funds for personal needs and wants. A business is considered solvent when it is capable of paying all debts and meeting its financial obligations.

Non-Profit vs. Not-For-Profit Organizations

While both non-profit and not-for-profit organizations operate without the primary goal of making money for owners, they have distinct structural and legal differences.

Non-profit organizations exist explicitly to enhance the public good and raise funds for specific goals. Examples include charities and human rights organizations like Amnesty International. These organizations can have a separate legal entity, they have salaried employees, and they act like businesses in their operations, though they do not benefit any single member personally.

Not-for-profit organizations use any surplus funds (surplus money remaining after operating costs) specifically to improve the services offered to their members rather than for public charity. They do not distribute profits to members. These organizations consist of independent associations of persons who join together to meet specific economic, social, or cultural goals. Examples include housing co-operatives or child-care co-operatives. Unlike non-profits, not-for-profits are typically managed by volunteers and cannot have a separate legal entity.

Business Sizes and the Canadian Economic Landscape

Businesses are classified by their geographic reach—local, regional, or global—and by their size. In Canada, Small to Medium-sized Enterprises (SMEs) dominate the economy. An SME is defined as a business with fewer than $500$ employees. Collectively, there are over $1$ million such businesses in Canada, and they provide jobs for $60\%$ of the Canadian workforce.

The breakdown of employer businesses in Canada by size is as follows:

• Small Businesses ($1\text{ to } 99$ employees): Account for $97.9\%$ of all businesses ($1,143,630$ total).
• Medium Businesses ($100\text{ to } 499$ employees): Account for $1.8\%$ of all businesses ($21,415$ total).
• Large Businesses ($500+$ employees): Account for only $0.3\%$ of all businesses ($2,933$ total).
• Total Employer Businesses: $1,167,978$.

Regional distribution of these businesses (totalMEs) across Canada includes:

• Ontario: $416,801$
• Quebec: $239,966$
• British Columbia: $178,966$
• Alberta: $169,305$
• Saskatchewan: $41,185$
• Manitoba: $38,712$
• Nova Scotia: $29,922$
• New Brunswick: $25,509$
• Newfoundland and Labrador: $17,526$
• Prince Edward Island: $5,935$
• Yukon: $1,757$
• Northwest Territories: $1,658$
• Nunavut: $736$

The number of SMEs per $1,000$ population (aged $15+$ years) averages $39.2$ nationally, with the highest density in Yukon at $57.3$ and the lowest in Nunavut at $29.6$.

Goods, Services, and Channels of Distribution

A fundamental way to classify what a business provides is the distinction between goods and services. Goods are tangible items that can be seen or touched (e.g., a phone, a book). Services are intangible forms of assistance or work provided to a consumer (e.g., a haircut, legal advice).

Businesses are also classified by their Channels of Distribution, which describes how they deliver their offerings to the customer:

• Retail ("Bricks and Mortar"): Physical storefronts where customers visit in person.
• Telephone: Services provided over phone lines, such as technical support.
• E-commerce: Transactions and services conducted over the internet.

Other classification methods include the type of ownership, the role the business plays in the community, and the types of jobs provided (labor-intensive versus technology-based roles).