Lesson 3

What is Business?

  • Definition: The production and/or sale of goods and/or services to satisfy the wants, needs, and demands of consumers, with the purpose of making a profit.
  • This definition appears on Page 4 of the transcript and serves as the foundation for the unit.

Unit 1 Study Objectives

  • Business Leadership and Leadership Styles
  • What is Business – Today’s Lesson
  • The Role of Consumers
  • Starting a Business
  • Economic Resource
  • Demand, Supply and Price

Visual/Introductory Elements (Page 3 visuals)

  • What is Business (visual heading)
  • Key terms/labels often paired with business concepts:
    • TEAM
    • TIME
    • PLAN
    • STRATEGY
    • BUSINESS
    • PRODUCT
    • VISION
    • COMPANY
  • These elements suggest components of planning and branding within business activities.

Characteristics of Businesses

  • 1. Profit or Non-profit?
  • 2. Large or Small
  • 3. Forms of Business Ownership
  • 4. Goods or Services
  • 5. Channels of Distribution
  • 6. Role in the Community
  • 7. Jobs

1. Profit vs. Non-Profit vs. Not-for-Profit?

  • For Profit: goal is to make money.
  • Most businesses operate for profit.
  • Profit is defined as:
    Profit=Revenue−Expenses\text{Profit} = \text{Revenue} - \text{Expenses}
  • Not-for-profit organizations are organizations that do not earn profits for their owners.
  • Non-profit organizations, income is distributed to the group's members, directors, or officers.
  • Usually, not-for-profit entities raise money for a charity or cause (examples given: Heart & Stroke Foundation, Big Brothers, etc.).
  • Practical implication: Even non-profit entities manage revenues and expenses, but profits are reinvested in the mission rather than distributed to owners.

2. Large or Small?

  • Most businesses are small or medium-sized (SMB).
  • SMB is defined as a business that employs less than 500 people.
  • Canada context: More than 1 million SMBs, employing more than 60% of the Canadian workforce.
  • Significance: Small and medium businesses are a major source of employment and economic activity.

3. Forms of Business Ownership

  • This topic is introduced here and to be discussed in more depth later.
  • Simple introduction names the common forms:
    • Sole Proprietor
    • Partnership
    • Corporation
    • Co-operative
    • Franchise
  • Note: Each form has different implications for liability, taxation, control, and growth.

4. Goods or Services

  • GOOD: A tangible item that is sold, typically for profit; something you can touch.
  • SERVICE: An activity done for a fee, with no tangible good changing hands.
  • Examples:
    • Goods: physical items like cars, bags, electronics.
    • Services: mechanic work, legal advice, medical care, psychic readings (as listed).

5. Channels of Distribution

  • Distribution is how a business delivers goods or services to customers.
  • Bricks & Mortar: Physical location where customers go (store, gym).
  • Online stores: E-commerce without a physical storefront.
  • B2B: Business to Business interactions.
  • Wholesaler: Intermediaries who sell to retailers or other businesses.
  • Direct to customer: Selling straight to end consumers without intermediaries.

6. Role in the Community

  • Businesses fulfill various roles/functions within the community.
  • Examples from the transcript:
    • Canadian Diabetes Foundation: Offers support and raises funds to help people with diabetes.
    • GreenTech – John Deere dealership: Provides sales and service for customers (demonstrating a local business contributing to local economy and employment).
  • Real-world relevance: Businesses can support health, education, and services in their communities through operations and philanthropy.

7. Jobs

  • The types of jobs a business can provide depend on its operations.
  • Example from a Health Club:
    • Roles include fitness trainers, front desk workers, office workers, maintenance workers, and sometimes food service personnel.
  • Significance: Employment opportunities and workforce composition are a key aspect of a business’s impact.

Goods vs Services: Quick Recap with Examples

  • Goods: Tangible items that can be touched and stored before sale.
  • Services: Intangible activities provided for a fee.
  • Examples from the transcript illustrate both categories (e.g., a mechanic or doctor as services; a bag or other physical product as goods).

Cross-cutting Concepts and Real-world Relevance

  • Economic Resource (from objectives): Resources (natural, human, financial, capital) are foundational inputs for producing goods/services.
  • Demand, Supply and Price (from objectives): Core market forces that determine how goods and services are allocated and priced in an economy. This unit lays the groundwork for exploring these concepts more deeply in later lessons.

Worksheet Reference (Page 14)

  • Differences in Business: A dedicated worksheet is referenced for comparing differences in business forms and models. This suggests an emphasis on evaluating trade-offs between ownership structures, distributions channels, and community roles.

Summary of Key Definitions and Formulas

  • Profit: Profit=Revenue−Expenses\text{Profit} = \text{Revenue} - \text{Expenses}
  • SMB (Small and Medium-sized Business): \text{SMB} \iff \text{employees} < 500
  • Forms of Ownership (listed): Sole Proprietor, Partnership, Corporation, Co-operative, Franchise
  • Goods vs Services: tangible vs intangible offerings
  • Channels of Distribution: Bricks & Mortar, Online, B2B, Wholesaler, Direct to customer
  • Role in the Community: charitable and service-oriented contributions