1. Introduction to Business & Technology
What is a Business?
Introduction to Business & Technology

2. Characteristics of a Business
An organization that produces or distributes a good or service
Reacts quickly to the changing nature of a society.

3. 3 Major Activities of a Business (whether it has one or one million workers)
Production
Involves making a product or providing a service
Marketing and Sales
Deals with how goods and services are exchanged between producers and consumers
Finance
Includes all money matters related to running a business

4. 2 Major Kinds of Businesses
Manufacturing/Industrial Businesses
Produce things/tangibles that you can touch.
Examples: mining, manufacturing, construction
Service/Commercial Businesses
Offer services (intangibles)
Examples:
marketing activities; such as, advertising, sales promotion
financing activities; such as, banking and investing companies
supplying/furnishing services; such as, transportation, insurance products, electric power, hotels, DVD rentals

5. Important Characteristics of Businesses
Changing Nature of Businesses
Businesses must be dynamic and react quickly to the changing nature of society.
Efficiency--measured by output and productivity
Output: the quantity/amount produced in a given period of time.
Productivity: producing the largest quantity in the least amount of time by using efficient methods and technology at the lowest cost.

6. 3 Ways to Improve Productivity
Specialization: workers become expert at what they do. As a result, quality improves while increasing the amount produced.
Mass Production: the use of up-to-date equipment and assembly line methods to produce large quantities of identical goods.
Technology: Includes equipment, manufacturing processes, software, and materials from which products are made. Because of new discoveries and inventions, better-quality goods and services are built at a faster pace and often at a lower cost. Advanced technology, offers a business a powerful advantage over competitors

7. Business in the U. S. can be organized in the following ways:

8. 1. Sole/Single Proprietorship/Ownership
A business owned by one person

9. Advantages and Disadvantages of organizing as a Sole Proprietorship
Advantages to the owner:
His/her own boss
Receives all profits
Personally knows employees and customers
Can act quickly in making decisions
Free from too much red tape
Usually pays less in income tax.
Disadvantages to the owner:
He/She may lack special skills and abilities.
May lack funds.
Bears all losses
Illness or death may close the business

10. Tax Considerations when organizing as a sole proprietorship
Owners are taxed at individual rates.
Owners have unlimited liability for the debts of the business.

11. A business owned by two or more people but is not incorporated.
2. Partnership
A business owned by two or more people but is not incorporated.

12. Advantages and Disadvantages of organizing as a Partnership
Skills and Abilities are pooled
Sources of funds/capital increased
Credit position improved
Less of a tax burden than a corporation
Disadvantages:
Unlimited financial liability
Each partner is bound by the contracts of other partners
Disagreement among partners can cause the demise of the business
Example: Profit distribution
Uncertain life of the business
Example: Difficulty withdrawing from the partnership

13. Tax Considerations for organizing as a partnership
Owners are taxed at individual rates.
In a general partnership owners have unlimited liability for not only themselves, but also for their partners.

14. Acts as a legal “person” on behalf of the owners.
3. Corporation
A business that operates as a legal “entity/being” separate from any of the owners.
Acts as a legal “person” on behalf of the owners.

15. Corporations
Raise money for business activity through the sale of stock to individuals and organizations that wish to be part owners, these part owners are known as (shareholders/stockholders) .

16. Advantages and Disadvantages of organizing as a Corporation
More available sources of funds/capital/cash to operate through the sale of stock.
Fixed financial liability of owners.
Limited Liability of the stockholders
Availability of Specialized Management.
Permanency of Existence (Unlimited life of the company.
Ease of transfer of ownership
Disadvantages:
More difficult creation process than other forms of business organization--Restrictions to charter used to incorporate.
Taxes are usually higher.
Government regulations and reports are more extensive
Owners are usually limited in their control
Record keeping for stockholders is more complex