1.1 What is a business? Flashcards
why do businesses exist?
to satisfy costumer needs and wants by selling goods and services in return for profit
what areas of the syllabus does this unit uses?
human resource management, finance and accounts, marketing, operations management
what is a tangible product
it is defined as a good. can be seen or taken home. ex. phone, vegetables
what is an intangible product?
defined as a service. consumer cant physically take it home. like a yoga class, medical appointment, haircuts, bus ride, education, health
what is the role of a business
to meet the needs and wants of individuals or organizations
what are the inputs for factors of production
land, capital, entrepreneurship, labour
the outputs of thr production process
goods and services
what is land in inputs of production
these are natural resources needed to produce goods and series.
ex. water, sand, minerals, animals, plants
what is labour as an input of production
human effort used to produce goods and services. (referred to as human resources
what is capital as an input of factors of production
non-natural or manufactured resources used in production process. ex. machinery, tools, motor vehicles, physical premises or infrastructure. this is funded by money. capital resources referred to as financial resources
what is entrepreneurship in factors of production
refers to knowledge, skills, and experiences of individuals who have the capability to manage the overall production process. entrepreneurs hae ability and willingness to take risks in order to produce goods and provide services to costumers profitably
what are costumers
people or businesses that purchase goods or services. willing to pay to buy certain products
what is adding value to goods or services
process of producing a particular good or service that is worth more than the cost of the resources used to produce it
what are the 4 main business functions
human resources, finance and accounts, marketing, operations
what is human resources
department responsible for managing the personnel of the organization
what is finance and accounts
department in charge of managing the organization´s money
what is marketing
the department is responsible for identifying and satisfying the needs and wants of costumers. responsible for ensuring that the firm´s products sell
what is operations management
department responsible for managing the resources which are dedicated to the production and delivery of products and services
What is the primary sector
acquisition of raw materials. for ex. coals and animals raised
what is the secondary sector
manufactures and assembles products. transforms raw materials into finished goods. goods
what is the tertiary sector
this sector provides to costumers. which sometime includes tangible goods. ex. banks, education, transportation, insurance. service.
what is the quaternary sector
service that are focused on knowledge. This includes IT, research and development, consultancy, the media etc. service.
what is an entrepreneur
an individual who deelops and runs a business assuming all the risks and rewards. able and willing to take calculated risks by investing in a business or start up
characteristics of an entrepreneur
- able to see opportunities where others dont
- necessary skills and initiative to take good new ideas to market
- can make right decisions that lead to profitability
entrepreneurship
describes traits of individuals who run their own business
visionary
foresight and driving force behind an organization´s growth and development. can see market changes and trends before they actually happen or materialize. even set trends themselves
What are the opportunities to start a business?
- Rewards: getting to keep all the profit. Also the possibility.
- Necessity: the need for a salary may lead to some starting a new business
- Sharing an idea: if you really believe in something you want to share it with others
- Finding a gap: some people stumble across a business idea by chance
- interest: some people have a passion for something that they want to make their work
- challenge: some people just want to see if nthey can make it
challenges of starting a business
- lack of experience
- poor location chosen
- difficulty raising finance
- inability to raise brand awareness
- lack of costumer interest
- difficulty in registering the business/following the law
- difficulty finding suppliers
- expanding too fast
- rigidity (do not adapt to change)
- little finance
- not investigating the market (market research)
- business plan problems
- poor marketing social media presence
