Understanding Business 1.1 - Business Activity Business Management (National 5) Understanding Business 1.1 - Business Activity N5 Bus Man – 1.1: Business Types © BEST Ltd ‹#› Licensed to: Turnbull High School

What is a business? BUSINESSES are organisations that are formed to provide: GOODS SERVICES GOODS and SERVICES can be: DURABLE NON DURABLE CAPITAL CONSUMER N5 Bus Man – 1.1: Business Types © BEST Ltd ‹#› Licensed to: Turnbull High School

The Business Cycle The process of businesses using the factors of production to produce goods and services to satisfy the needs and wants of consumers is known as the BUSINESS CYCLE. This process is a cycle because it goes on over and over again because consumers UNLIMITED wants constantly create new things that businesses can produce. The cycle means that if a business is to succeed it MUST pay particular attention to minimising its externalities and satisfying consumers unlimited wants to stop the business failing. Consumers have NEEDS and (NEW and UNLIMITED) WANTS. Businesses identify consumers NEEDS and WANTS and decide to make GOODS and SERVICES to satisfy them. THE BUSINESS CYCLE Wages from employment allow consumers to CONSUME goods and services. Businesses employ the FACTORS OF PRODUCTION to PRODUCE the desired goods and services and increase WEALTH. N5 Bus Man – 1.1: Business Types © BEST Ltd ‹#› Licensed to: Sample High School