Topic 1.1 - Introduction to business management Flashcards
Adding value
the practice of producing a good or service that is worth more that the cost of the resources used in the production process.
Business Plan
the document that sets out the business idea, its goals and objectives and other details of how the business will operate.
Businesses
Organizations involved in the production of goods and/or the provision of services.
Consumers
the people or organizations who actually use a product
customers
the people or organizations that buy the product
Entrepreneurs
owners or operators of an organization who manage, organize and plan the other three factors of production.
Entrepreneurship
the collective knowledge, skills and experiences of entrepreneurs
Factors of production
the resources needed in the production process, i.e. land, labour, capital and entrepreneurship
Goods
physical products produced and sold to customers, e.g. laptops, contact lenses, perfume, and toys
Intrapreneurship
the act of behaving as an entrepreneur but as an employee within a large business organization
Needs
the basic necessities that a person must have to survive, e.g. food, water, warmth, shelter, and clothing
Primary sector
businesses involved in the cultivation or extraction of natural resources , e.g. farming, mining, quarrying, fishing, oil exploration and forestry
Product
refers to what both goods and services produce
Production
the process of creating goods and/or services using factors of production to add value
Quaternary Sector
a sub-category of the tertiary sector where businesses are involved in intellectual, knowledge based activities that generate and share information, e.g. information communication technology and research organizations
Secondary sector
the section of the economy where business activity is concerned with the construction and manufacturing of products
Sectoral changes
a shift in the relative share of gross domestic product (or national output) and employment that is attributed to each business sector
Services
intangible products sold to customers e.g. air flights, restaurants, cinemas.
Tertiary Sector
the section of the economy where business activity is concerned with the provision of services to customers
Wants
People’s desires
Problems a new business may face
Lack of finance, cash flow problems, marketing problems, unestablished customer base, people management problems, legalities, production problems, high production costs, poor location, external influenced
Steps in the process of starting up a business
- Write a business plan
- Obtain start-up capital
- Obtain business registration
- Open a business bank account
- Marketing
