Understand the purpose and the functions of business Purpose and Functions of Business

 Businesses sell goods, services or both to consumers  Goods—clothing, cars, computers, CDs  Services—hairdresser, dry cleaner, lawn care, babysitting  Businesses fulfill the needs and wants of consumers.  Consumers use goods and services  Customers purchase goods and services  Need – necessary for survival; Want – something that’s nice to have. Purpose of Business

 Profit motive—desire to make money; see the opportunity to make money in the marketplace.  Opportunity to meet wants and needs of consumers  Opportunity to increase competition in the marketplace  Businesses are investment opportunities for individuals— future income Motivation to start a business

 Competition is basically a contest between businesses to win customers’ business and loyalty by offering the most favorable items. What is Competition?

 Accounting—recording and reporting financial activity and transactions  Examples  Paying bills  Collecting money from customers  Paying taxes  Preparing employee payroll checks  Reconciling bank statements  Investing cash  Purchasing inventory Functions of Business

 Management  Makes sure that the entire organization meets its goals and obligations  Effectively works with people in the organization  Uses available resources to accomplish the organizations’ goals Functions of Business

 Marketing  Satisfies the needs and wants of consumers through exchange  Based on four “P’s”  Product  Price (establishing the price of the product)  Placement (placing the product in attractive and convenient sales locations)  Promotion (advertising) Functions of Business

 Information Technology  Uses technology to share knowledge, facts, and data to others (co-workers, customers, and suppliers)  Examples  Maintains accounts  Maintains software applications  Maintains processing systems  Maintains hardware for all technology used Functions of Business

 Operations  Considered the “back office”  Involves behind the scenes paperwork required to complete all transactions  Found in both the service and the manufacturing sector Functions of Business

 Human Resources  Manages “people” relations within the company  Helps workers develop the skills and knowledge needed to be successful on the job  Responsible for hiring and firing of employees  Selects employee benefits and enrolls all employees in the benefits (insurance, retirement, etc.)  Helps employees pursue educational opportunities Functions of Business