BUSINESS ACTIVITIES Identify the three types of businesses Lesson 2.1 2/4/2019 LESSON 2.1 BUSINESS ACTIVITIES Identify the three types of businesses Describe the six business activities INTRO TO BUSINESS

2.1 Types of Businesses Producers Intermediaries Service businesses

2.1 Producers Producers are businesses that create products used by individuals and other businesses. If they take resources from nature to make their products or for direct consumption, they are referred to as extractors. A major group of producers is manufacturers, businesses who get supplies from other producers and convert them into their own products.

2.1 Intermediaries Intermediaries are businesses involved in selling the goods and services of producers to consumers and other businesses. Most common types of intermediaries are retailers and wholesalers. A retailer sells products directly to consumers at a place of business. A wholesaler is an intermediary business that sells the products of a manufacturer or extractor to a retailer. Some intermediaries help in distributing and selling products and services.

Examples of Service Businesses 2.1 Service Businesses Instead of offering products for sale, a service business performs activities that are consumed by customers. Both businesses and consumers use service businesses. Examples of Service Businesses Accountants Landscapers Painters Baby sitters Lawyers Pet sitters Dentists and doctors Online travel agents Web designers

Business Activities Generate ideas Raise capital 2.1 Business Activities Generate ideas Improve or offer something new Good or better than the competition Raise capital Capital resources to operate a business is critical Financial resources are needed to purchase: Buildings and equipment Hire and train employees Day-to-day operations

Business Activities Buy goods and services Employ and train personnel 2.1 Business Activities Buy goods and services Needed for operating a business Include inventory of goods Expenses and equipment Employ and train personnel Most important resource: People Most businesses have a Human Resource department to hire, train, and recruit

Business Activities Market goods and services 2.1 Business Activities Market goods and services Without good marketing, even the best products and services might not be known and, therefore, not purchased by consumers Maintain business records Computer technology to analyze financial data The failure to keep adequate records is a major reason why some businesses fail

BUSINESS OWNERSHIP Describe the nine forms of business ownership Lesson 2.2 2/4/2019 LESSON 2.2 BUSINESS OWNERSHIP Describe the nine forms of business ownership Identify five business management activities INTRO TO BUSINESS

Forms of Business Ownership 2.2 Forms of Business Ownership Common Forms Sole proprietorship Partnership Corporation Other Forms Franchises Cooperatives Nonprofit corporations Joint ventures S corporations Limited liability company

Common Forms of Business 2.2 Common Forms of Business A business owned and operated by just one person is called a sole proprietorship. A business owned and managed by a small group—often not more than two or three people—who have entered into an agreement is called a partnership. A business owned by a number of people and operated under written permission from the state that charters it is called a corporation.

United States Business Ownership 2.2 United States Business Ownership

2.2 Franchises A franchise is a written contract granting permission to a businessperson to sell someone else’s product or service.

2.2 Cooperatives A business owned by the members it serves and managed in their interests is called a cooperative. In a consumers’ cooperative, consumers buy goods and services together at lower prices than each person could buy individually. A producers’ cooperative, usually a farm organization, gives the producers greater bargaining power in selling their products and allows them to be more competitive in the marketplace.

Nonprofit Corporations 2.2 Nonprofit Corporations Corporations that are created for social, political, charitable, educational, or general welfare purposes are known as nonprofit corporations.

2.2 Joint Ventures An agreement between two or more companies to share a business project is known as a joint venture.

2.2 S Corporations The S corporation gets its name from a section of the Internal Revenue Service code. Many small businesses favor this type of corporation. One advantage of the S Corporation is the elimination of double taxation.

Limited Liability Company 2.2 Limited Liability Company A limited liability company (LLC) combines the best features of a corporation and a partnership. It provides liability protection for the owners but does not require a complex set of organizational and operating requirements such as those needed for a corporation.

Management Activities 2.2 Management Activities Plan Organize Staff Lead Control

2.2 Plan The process of thinking, gathering, and analyzing information, as well as making decisions about all phases of the business, is called planning.

2.2 Organize The process of determining what work has to be done and who is to do it is called organizing.

2.2 Staff Staffing includes the many activities involved in finding, selecting, hiring, training, evaluating, and rewarding employees.

2.2 Lead Directing employees in their work so that they perform their tasks correctly and in a timely manner is called leading.

2.2 Control When managers or supervisors compare what has been accomplished with what was planned, they are engaging in the process known as control.

EFFECTIVE MARKETING Explain what marketing involves LESSON 2.3 2/4/2019 LESSON 2.3 EFFECTIVE MARKETING Explain what marketing involves Identify the functions of marketing INTRO TO BUSINESS

2.3 Marketing Basics Marketing is the process of informing the general public about goods and services that are available for sale at a convenient location or online.

2.3 Marketing Strategy The plan that a company develops to show how it will use marketing to achieve its goals is called its marketing strategy. Target Market A group of individuals or businesses that has similar product needs is called a target market. Marketing Mix Product Place - Distribution Price Promotion

Marketing Orientation 2.3 Marketing Orientation Businesses that have a marketing orientation consider the needs of customers when developing products and services.

2.3 Marketing Channels The path that a product travels as it goes from producer to consumer is called a channel of distribution. There are two basic channels of distribution, direct and indirect. A direct channel brings the product to the consumer directly from the producer. The indirect channel consists of one or more businesses that come between the producer and the consumer.

Functions of Marketing 2.3 Functions of Marketing Product/service management Distribution Selling Marketing-information management Financial analysis Pricing Promotion

Functions of Marketing 2.3 Functions of Marketing Product/service management Marketers assist with the design, development, maintenance, improvement, and acquisition of products and services that meet consumer needs Information and test results related to a new product or service are gathered and utilized.

Functions of Marketing 2.3 Functions of Marketing Distribution There are many steps taken to get the product or service to potential customers in the most efficient manner. Distribution involves giving careful consideration to such things as shipping, handling, and storing products and getting them to the desired locations in a timely manner.

Functions of Marketing 2.3 Functions of Marketing Selling Communicating directly or indirectly with potential customers to learn about their needs and wants and then trying to satisfy those needs and wants is part of the selling function. Sales Person

Functions of Marketing 2.3 Functions of Marketing Marketing-information management Gathering information from the target market through surveys. Use statistics to create or maintain those products/services

Functions of Marketing 2.3 Functions of Marketing Financial analysis Business: create a budget Customers: given financing options

Functions of Marketing 2.3 Functions of Marketing Pricing 3 goals of pricing: cover costs and generate a profit set a price that consumers will consider to be a good value be competitive Markup: The amount that is added to the cost of producing a product or service

Functions of Marketing 2.3 Functions of Marketing Promotion: Marketers search for effective ways to communicate with consumers and encourage the purchase of their goods and services. Advertising: Radio, TV, Internet, contests, product displays, sponsorships Promote the benefits of their products