The Purpose of Business

Purpose of Business Businesses fulfill the needs and wants of the consumers by selling goods or services or both. Businesses fulfill the needs and wants of the consumers by selling goods or services or both. A consumer is someone who uses goods or services. At this level a consumer can be either an individual or another business. A customer (who purchases goods or services) may also be the consumer. A consumer is someone who uses goods or services. At this level a consumer can be either an individual or another business. A customer (who purchases goods or services) may also be the consumer. Needs are things that are necessary for survival. There are some basic needs like food, shelter, clothing, and water. Needs are things that are necessary for survival. There are some basic needs like food, shelter, clothing, and water. Wants are not necessary for our survival but add pleasure and comfort to our lives. Examples of wants are MP3 players, TVs, sodas, candy bars, jewelry, and make-up. Wants are not necessary for our survival but add pleasure and comfort to our lives. Examples of wants are MP3 players, TVs, sodas, candy bars, jewelry, and make-up.

Purpose of Business Continued Services Goods Hairdresser Dry Cleaner Nail Technician Waitress Lawn Care Babysitting Clothing Cars Computers DVDs Personal Care Products Products are physical goods or services that can satisfy consumers needs

Reasons or Motivations to Start a Business Profit Motive – The desire to make money. In short, people see opportunities where they can benefit financially in the marketplace. Profit Motive – The desire to make money. In short, people see opportunities where they can benefit financially in the marketplace. Opportunities to meet the needs and wants of consumers. People see opportunities to help others and then develop a good or a service, which ultimately helps the consumer. Opportunities to meet the needs and wants of consumers. People see opportunities to help others and then develop a good or a service, which ultimately helps the consumer.

Functions of Business

Function 1: Accounting Is a system of recording and reporting financial activity and transactions. Is a system of recording and reporting financial activity and transactions. Includes recording actives that deal with money in an accounting system so managers can make better decisions. Includes recording actives that deal with money in an accounting system so managers can make better decisions. Examples on next slide Examples on next slide

Accounting Continued Examples: Examples: Paying bills (Accounts Payable) Paying bills (Accounts Payable) Collecting money from customers (Accounts Receivable) Collecting money from customers (Accounts Receivable) Paying taxes Paying taxes Preparing employee payroll checks Preparing employee payroll checks Reconciling bank statements Reconciling bank statements Investing cash Investing cash Purchasing inventory Purchasing inventory

Function 2: Management Employees whose overall job is to make sure that the organization meets its goals and obligations in every department or function of business. Management is effectively working with people and using resources to accomplish the organization's goals.

Function 3: Marketing The process of satisfying the needs and wants of consumers through exchange. Marketing is based on four “P’s”—Product, Price, Placement and Promotion. Examples: Preparing advertisements for TV, Radio, Newspapers, websites Creating product displays for businesses Informing stores about new products and services

Function 4: Information Tech. The use of technology to share knowledge, facts, and data to others such as co-workers, customers, and suppliers. Examples: Maintaining accounts Maintaining software applications Maintaining processing systems Includes maintaining the hardware for all technology used.

Function 5: Operations This function of business is considered the “back office” and involves all the behind the scenes paperwork that must be finished in order for the transactions to be completed. Operations are found in both the service sector and the manufacturing sector.

Function 6: Human Resources Manages the personnel relations within a company; helps develop the skills and knowledge necessary to be successful while on the job. Examples: Hiring and firing of employees and the paperwork involved Selecting benefits a company offers and enrolling employees in the benefit programs: Insurance Retirement plan Credit union membership dues, and other deductions Coordinating/facilitating educational opportunities for employees