Intro to Business

Question 1

What is business?

Answer 1

Business is economic activity that involves the exchange of products and/or services for profits, or other motives. It is a transactional activity.

Question 2

What are goods?

Answer 2

Goods are tangible items produced and traded by businesses in order to generate profits. Examples include bags, food, and electronics.

Question 3

What are services?

Answer 3

Services are intangible products that cannot be touched, held, or stored. Examples include services from lawyers, doctors, banks, or internet providers.

Question 4

What are natural resources?

Answer 4

Often referred to as just land, natural resources are inputs such as raw materials and land areas essential for business activities. Examples of natural resources include minerals, farmland, water, forests, etc.

Question 5

What is capital?

Answer 5

Capital refers to the resources and money used by the business to create further wealth. It is used to purchase non-current assets like machinery, equipment, warehouses, etc.

Question 6

What is labor or human resources?

Answer 6

Often referred to as labor, human resources involve human input - skilled or unskilled - into business activities. Examples include business managers, workers, scientists, and all employees who work for a company.

Question 7

Entrepreneurship

Answer 7

These are risk-takers who manage other factors of production to provide the goods and services needed to satisfy consumers’ needs, while also making profits for the business. They are referred to as risk-takers because not all business processes return profits.

Question 8

Business Environment

Answer 8

The business environment takes into consideration all events, factors, or conditions, internal or external, that influence business activities. These factors may either have a direct or an indirect effect on the business and may either provide it with an opportunity or a risk.

Question 9

Internal Business Environment

Answer 9

The internal environment is related to the internal functions of the business, such as its operations, its employees, its management, ethics, marketing resources, etc.

Question 10

External Business Environment

Answer 10

The external environment is related to influences that come from outside of the business, such as governmental bodies, the economic climate, customer demands, etc.

Question 11

Stakeholders

Answer 11

Stakeholders are either internal or external parties who hold interest in the activities of a business and can exert or receive influence in regard to that business. Stakeholders include owners, investors, employees, suppliers, customers, communities, trade associations, and government bodies.

Question 12

Internal Stakeholders

Answer 12

Internal stakeholders have a direct relationship with the business. They could be employees or investors. Thus, they have a significant interest in the business.

Question 13

Business Management

Answer 13

Business management refers to the organising, maintaining and allocating of business resources in order to achieve business goals and develop the business.

Question 14

Risks to starting a business

Answer 14

Starting a new business is risky. The kinds of risks in starting a new business include:

1. Strategic risks
2. Operational risks
3. Financial risks
4. Compliance risks
5. Reputation risks.

Question 15

Rewards of starting a business

Answer 15

The rewards of starting a new business include:

1. Sense of satisfaction
2. Financial rewards mostly from business profitability
3. Expanding business reach
4. Provides the entrepreneur with autonomy
5. Provides the entrepreneur with a platform for growth and development.

Question 16

The four factors of production

Answer 16

1. Land
2. Labor
3. Capital
4. Entrepreneurship