Nature of Business Flashcards
What is the main purpose of a business?
To produce and sell products that satisfy individual wants and needs in order to make a profit.
What does a business do in terms of buying and selling?
A business is an organisation that buys and sells goods.
How does a business add value?
They add value in the process of production or sale.
What does the value chain in a business refer to?
The value chain refers to the process through which a business adds value during production or sale.
What is a good?
A good is a tangible item something that we can physically see and touch.
What is a service?
A service is an action performed for someone, such as education, seeing a doctor, or receiving healthcare.
What is the key difference between goods and services?
Goods are tangible (physical items), while services are intangible (actions that cannot be touched).
Can you give examples of goods and services?
Tangible (Goods): Clothes, phones, food.
Intangible (Services): Education, medical treatment, hairdressing.
What are the main activities involved in running a business? (6)
Production:
Planning and Forecasting:
Management:
Organising:
Distributing:
Controlling:
Why are businesses important to society?
- Businesses provide goods and services to meet people’s needs and improve quality of life.
- They support the economy by creating jobs, income, wealth, and opportunities for entrepreneurship
What are some key roles and functions of a business?
Profit: Businesses earn money to grow.
Jobs: They provide employment.
Income: Owners, shareholders, and workers earn money.
Choice: Consumers get a variety of products.
Innovation: They improve products through research.
Entrepreneurship: They turn ideas into reality.
Economic growth: Businesses boost wealth and growth.
Better life: They improve quality of life.
What is profit, and why is it important?
Profit is the money left after all expenses are paid. It keeps the business running and rewards owners.
Why is employment an important role of business?
Employment provides people with income, supports communities, and helps the economy grow.
How do businesses provide income to people?
Business owners earn profit, shareholders earn dividends, and employees earn wages and salaries.
Why is choice important in a business economy?
Choice gives customers more options at competitive prices and improves customer satisfaction.
What is innovation and why is it important?
Innovation is improving or creating new products. It helps businesses stay competitive and meet changing customer needs.
What is entrepreneurship, and what does an entrepreneur do?
Entrepreneurship is the process of turning ideas into a business. Entrepreneurs take risks to start and grow businesses.
Examples: Steve Jobs, Elon Musk
What is meant by ‘quality of life’, and how do businesses help improve it?
Quality of life means how comfortable and happy people are. Businesses improve this by creating useful products and services (e.g., smartphones, healthcare services, transport).
What is wealth, and how do businesses help create it?
Wealth is the total value of resources in the economy. Businesses help create wealth through job creation, innovation, and investment in the economy.
