1. Chapter 2: Business Basics
Unit 1: Marketing Basics
Chapter 2: Business Basics
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2. Learning Goals Differentiate between economic needs and wants
Describe the three uses of money
Explain how a business makes a profit
Describe the three forms of business ownership
Describe the difference between a for-profit corporation and a not-for-profit organization
Identify the four functions of business and give an example of each
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3. Day 1 Response Journal
What do you NEED to be able to live? Create a list. ***Save As Feb 9 in your Response Journal Folder***
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4. Economic Needs and Wants
A _________ is something that is necessary for survival
E.g. air, water, food, clothing and shelter
Includes things you need to function in society
E.g. you need schoolbooks, school clothes (uniform) and transportation to and from school
A __________ is something you desire, but could function without
Examples???
Need
Want
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5. Economic Needs and Wants
Everyone has needs and wants
Some cannot be satisfied by buying something
E.g. you cannot buy friendship
Needs and wants that you can satisfy by buying something are called ____________________________
_______________________________ are the items you buy to satisfy economic needs and wants
Economic Needs & Wants
Economic Goods & Services
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6. The Exchange Read the example on page 19 paragraph 6
To _____________ is to trade something of vales for something you want
You may exchange money for a;
Soft drink (a good)
A concert ticket (a service)
A cause – donate to a local animal shelter (an idea)
Exchanges are the basis of all business
Exchange
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7. Money
____________ is a consistent item that people accept in exchange for goods or work
Without money, modern business could not exist
Money is used in three ways;
As a medium of exchange
As a unit of value
As a store of wealth
Money
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8. 1. Medium of Exchange Read the example on page 21 paragraph 2
Money is a convenient medium of exchange
Paper money and coins are easy to carry
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9. 2. Unit of Value Money can express the exact ________ of an item Value
Value is how much something is worth
The dollar is the unit of value in Canada
The dollar is used to express the value of goods and services the same way km are used to express distance
The value of a product expressed in dollars is the __________
Marketers use price to set the value of a product
Value
Price
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10. 3. Store of Wealth Money is easy to __________ Store
It enables you to keep and store wealth in a compact, easy, long-lasting form
Money is considered a store of wealth because it enables you store (in other words save) money until you need it
Store
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11. What Is Business?
_______________ is the general term for activities involved in the development and exchange of products
The term business also refers to a person or group of people who are involved in the development and exchange of products
A business can be large (e.g. General Motors) or small (e.g. a lemonade stand)
Business
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12. What Is Business?
Other terms that are often used to refer to a business include;
Firm
Company
Organization
Corporation
Enterprise
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13. What Is Business?
Business is the engine that powers economies around the world
Money flows;
From businesses to workers
From the workers back to the businesses
Business provides;
Goods and services you use every day
Wages (money) people use to buy goods and services
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14. What Is Business?
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15. Making a Profit
The main goal of most businesses is to make a __________
Profit is the money that a business has left over after all the expenses and costs of running the business are paid
A business makes a profit by marketing products that customers want and are able and willing to buy
Customers want and are willing to buy products that meet their needs
Therefore, businesses make a profit by satisfying the needs and wants of their customers
Profit
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16. Making a Profit $ $ $ = -
Costs and Expenses
Sales
Profit
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17. Day 1 Assigned Work Students please complete the following;
K & U Questions #1 & 2 on page 27
Thinking Question #1 on page 27
Application Questions #1 on page 28
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18. Day 2 Response Journal
What do you think are the advantages and disadvantages of owning your own business? Create a list for each. ***Save As Feb 10 in your Response Journal Folder***
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19. Forms of Business Ownership
There are 3 main forms of business ownership;
Sole Proprietorship
Partnership
Corporation
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20. Forms of Business Ownership
A sole proprietorship is a business owned by ________ person who
Gets all profits
Bears all risks
E.g. Dr. Stephan Morrison, Dentist
A partnership is a business owned by a small number of people, usually ______ or ________
Partners share profits and risks
E.g. Dueck, Sauer, Jutzi & Noll Law Firm
One
Two
Three
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21. What Is a Corporation?
A _______________ is a legal entity established for the purpose of do business
Exists separately from the people who own it
Therefore, the owners are not responsible for the actions of a corporation
Owned by shareholders/stockholders
A ________ or ________ is the right to partial ownership in a corporation
The corporation sells stock, and the people who buy the stock become the owners of the corporation
Examples; Ford, Microsoft and Rogers
Corporation
Share
Stock
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22. What Is a Corporation? As a legal entity, a corporation can;
Buy property
Manufacture products
Earn money
Lose money
Sue
Be sued
A corporation offers __________________ to its shareholders. Therefore …
When sued, the corporation pays the damages, the shareholders (owners) do not pay
Limited Liability
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23. For Profit or Not-for-Profit?
In general, there are two types of business organizations;
For-Profit
Goal of a for-profit corporation is to make a profit for its owners
It is assumed that a business is for profit, unless otherwise stated
Not-for-Profit
Goal of a not-for-profit is to benefit society
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24. What Is a Not-for-Profit Organization?
Is a legal entity
Is established to provide a benefit to society
Can make a profit
However, any profit made must be reinvested in the organization to support its cause or benefit
Also called non-profit organizations
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25. What Is a Not-for-Profit Organization?
Examples of benefits or causes that many Not-for-Profits support include;
Raising money for medical research
E.g. Canadian Cancer Society
Protecting the environment
E.g. World Wildlife Fund
Providing services to children in need
E.g. Ronald McDonald House Charities Canada
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26. The Functions of Business
___________ is a general term for a category of activities
Businesses carry out numerous activities every day
These activities are grouped into 4 functions;
Production
Making products
Finance
Handling money
Marketing
Focusing on customers
Management
Planning, coordinating, monitoring
Function
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27. Production
Production is any activity related to the __________ of a product (good, service or idea)
Typically, when we think of production we think of factories and assembly lines of people putting together cars, TVs, etc.
However, production also includes;
Farming
Mining
Construction
Manufacturing
For services, production is often the service itself, for example, cutting and styling someone’s hair
Making
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28. Finance
The finance function of business includes all activities involving ____________
Finance involves;
Planning
Developing a budget; a spending plan
Loan repayment
Accounting
Paying bills
Receiving payments
Keeping track of all money that enters or leaves the business
Money
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29. Marketing
Marketing helps the entire business focus on the needs and wants of the customer
Marketing includes;
Learning about customers (research)
Pricing
Promotion (includes advertising)
Selling
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30. Management Planning Coordinating Monitoring Supervising
Management includes all activities required to plan, lead, organize and control a business
Read the example in paragraph 3 on page 26
Managers look at the big picture and lead workers in a direction that makes the business better
Management activities include;
Planning
Coordinating
Monitoring
Supervising
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31. Day 2 Assigned Work Students please complete the following;
K & U Question #8 on page 27
Thinking Questions #4 - 7 on page 27
Communication Question #1 on page 28
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