1. Objective 1.01 Understand the purpose and the functions of business
Purpose of Business
Objective 1.01 Understand the purpose and the functions of business

2. 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

3. 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

4. Vocabulary
Profit : Money that remains after a business has paid for the expenses of running the business.
 Profit motive: A person's incentive to make money for him/herself.
Competition: Contest between businesses to win customers' business and loyalty
Needs: Items necessary for existence, such as clothing, food, and shelter.
Wants: Items that would be nice to have, but are not necessary.

5. Vocabulary Consumer: A person who USES goods or services.
Customer: A person who PURCHASES goods or services.
 Goods: Items businesses sell that can be physically weighed or measured, such as iPods and CDs.
 Services: Tasks that businesses perform or provide for customers, such as hair cuts and car washes.