The purpose and nature of business

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  • The purpose and nature of business.
    • What is a business?
      • Why start up a business?
        • People start a business because they believe there is a gap in the market.
        • Someone may start a business to make goods or provide services they believe the customer will pay for.
        • To distribute goods. Buy goods from manufacturer and sell to other businesses.
        • To benefit other people. e.g. charities.
        • To invest in a franchise.
    • Businesses supply goods or services.
      • Goods
        • A good is something that the customer can hold. They are physical objects.
      • Services
        • A service is are actions performed by others to aid the customer.
      • When purchasing a good or service the customer will either need or want it.
        • Need
          • A need is something a person needs in order to survive.
            • For example you need: warmth, shelter, food.
        • Want
          • A want is something is a good or service that a person desires but does not need in order for survival.
            • For example a person may want: A phone, holidays, entertainment and other luxuries.
    • The three factors of economy.
      • The primary sector.
        • These businesses produce the raw materials by extracting it from natural resources.
          • For example: Farming, mining, oil exploration, fishing.
      • The secondary sector
        • These businesses used the raw materials and make the products.
          • For example: Car manufacturing, clothing maker, construction
      • The tertiary sector.
        • These businesses distribute the products and provide the service.
          • For example: Shops, transport, hairdressing, banking, entertainment
    • The four factors of production.
      • capital
        • the buildings and machinery needed for the business.
      • enterprise
        • The entrepreneurs' who set up the business.
      • land
        • Where the business is based.
        • Where they get their natural resources from.
      • labour
        • The people working in the business.

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