Business: any organization that uses resources to meet the needs of customers by providing a product/service that they demand.
Role of businesses:
Consumer goods: physical and tangible goods sold to the general public.
Consumer services: non tangible products that are sold to the general public and include hotel accommodation, insurance services and train journeys.
Capital goods: physical goods that are used by industry to aid in the production of other goods and services such as machines and commercial vehicles.
Human resource (HR) management identifies the workforce needs of the business, recruits, selects and trains appropriate employees and provides motivational systems to help retain workers and encourage them to work productively.
Finance and accounts department has responsibility for monitoring the flow of finance into and out of the business, keeping and analyzing accounts and providing financial information to both senior management and other departments.
Marketing department is responsible for market research and for analyzing the results of such research so that consumer wants can be correctly identified. This information will then be discussed with other departments of the business so that the right product decisions are made. Once a product is available for sale, the marketing function will have to make important decisions concerning its pricing, how and where to promote it and how to sell it and distribute it for sale.
Operations management department has responsibility for ensuring adequate resources are available for production, maintaining production and quality levels and achieving high levels of productive efficiency.
Primary sector business activity: firms engaged in farming, fishing, oil extraction and all other industries that extract natural resources so that they can be used and processed by other firms.
Secondary sector business activity: firms that manufacture and process products from natural resources, including computers, brewing, baking, clothing and construction.
Tertiary sector business activity: firms that provide services to consumers and other businesses, such as retailing, transport, insurance, banking, hotels, tourism and telecommunications.
Quaternary sector business activity: focused on information technology (IT) businesses and information service providers such as research and development, business consulting and information gathering.
Why start a business?
Entrepreneur: someone who takes the financial risk of starting and managing a new venture.
Intrapreneur: someone within a large corporation who takes direct responsibility for turning an idea into a profitable finished product through using “entrepreneurial talents” such as risk-taking and innovation.
Employment creation
Economic growth
Firms’ survival and growth
Innovation and technological change
Identifying market opportunities
Problems faced by start-ups
Business plan: written document that describes a business, its objectives and its strategies, the market it is in and its financial forecasts.
Contents of a typical business plan:
Importance of business plans: