What is a Business?

  • Created by: geedarcy
  • Created on: 20-03-18 12:54
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  • What is a Business?
    • A business is any organisation that makes goods or provides  services
      • Businesses exist to provide goods or services.
        • Goods are physical products such as burgers or cars.
        • Services are non-physical items such as hairdressing.
        • Customer needs are the wants and desires of buyers.
    • Nearly half a million businesses start up each year.
      • A business start- up is a new firm operating in a market for the first time.
    • The vast majority of businesses are very small and operate in the service sector.
    • Businesses buy the products they need from suppliers
      • Suppliers are firms selling products to other businesses
      • Then then sell to customers
      • The individual who uses the product is called a consumer. Sometimes the customer and consumer are different people - for example, parents buy a pen for their child to use at school.
    • Businesses sell to customers in markets.
      • A market is any place where buyers and sellers meet to trade products
    • In order to create goods and services, a business buys or hires inputs such as raw materials, equipment, buildings and staff
      • These inputs are transformed into outputs  called  products.
      • These products are the goods and services used by consumers.
      • Production is the business activity of using resources to make goods and services.
    • A business adds value when the selling price of an item produced is higher than the cost of all the resources used to make it.
    • Primary production
      • Involves acquiring raw materials
      • Secondary production
        • This is the  manufacturing and assembly  process
      • Tertiary production
        • This refers to the commercial services that support the production and distribution process

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