Objective 1.01 Understand the purpose and the functions of business 1.01 Purpose and Functions of Business Objective 1.01 Understand the purpose and the functions of business

Purpose of Business Businesses fulfill the needs and wants of consumers. Consumers use goods and services Customers purchase goods and services Businesses sell goods, services or both to consumers Goods—clothing, cars, computers, CDs Services—hairdresser, dry cleaner, lawn care, babysitting

Motivation to start a 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

Functions of Business 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 e-mail 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