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

2. Purpose of Business Businesses fulfill the needs and wants of consumers. Businesses fulfill the needs and wants of consumers. Consumers use goods and services Consumers use goods and services Customers purchase goods and services Customers purchase goods and services Businesses sell goods, services or both to consumers Businesses sell goods, services or both to consumers Goods—clothing, cars, computers, CDs Goods—clothing, cars, computers, CDs Services—hairdresser, dry cleaner, lawn care, babysitting Services—hairdresser, dry cleaner, lawn care, babysitting

3. Customer

4. Consumer

5. Need verses Want Need – something one must have to survive Need – something one must have to survive Want – unfulfilled desire Want – unfulfilled desire

6. Products Goods – tangible items Goods – tangible items Services – intangible items Services – intangible items

7. Motivation to start a business Profit motive—desire to make money; see the opportunity to make money in the marketplace. Profit = revenue - expense Profit motive—desire to make money; see the opportunity to make money in the marketplace. Profit = revenue - expense Opportunity to meet wants and needs of consumers Opportunity to meet wants and needs of consumers Opportunity to increase competition in the marketplace Opportunity to increase competition in the marketplace Businesses are investment opportunities for individuals—future income Businesses are investment opportunities for individuals—future income

8. Functions of Business Accounting—recording and reporting financial activity and transactions Accounting—recording and reporting financial activity and transactions Examples Examples Paying bills Paying bills Collecting money from customers Collecting money from customers Paying taxes Paying taxes Preparing employee payroll checks Preparing employee payroll checks Reconciling bank statements Reconciling bank statements Investing cash Investing cash

9. Functions of Business Management Management Organization – assigns roles and responsibilities of group and individuals Organization – assigns roles and responsibilities of group and individuals Control – makes sure goals are met Control – makes sure goals are met Planning – develops plans and forecasts for the future Planning – develops plans and forecasts for the future

10. Functions of Business Marketing Marketing Satisfies the needs and wants of consumers through exchange Satisfies the needs and wants of consumers through exchange Based on four “ P ’ s ” Based on four “ P ’ s ” Product Product Price (establishing the price of the product) Price (establishing the price of the product) Placement (placing the product in attractive and convenient sales locations) Placement (placing the product in attractive and convenient sales locations) Promotion (advertising) Promotion (advertising)

11. Products

12. Promotion Banner Ads TV Ads

13. Price

14. Place

15. Functions of Business Information Technology Information Technology Uses technology to share knowledge, facts, and data to others (co-workers, customers, and suppliers) Uses technology to share knowledge, facts, and data to others (co-workers, customers, and suppliers) Examples Examples Maintains e-mail accounts Maintains e-mail accounts Maintains software applications Maintains software applications Maintains processing systems Maintains processing systems Maintains hardware for all technology used Maintains hardware for all technology used Maintains computer networks Maintains computer networks Responsible for computer security Responsible for computer security

16. Functions of Business Operations Operations Considered the “ back office ” Considered the “ back office ” Involves behind the scenes paperwork required to complete all transactions Involves behind the scenes paperwork required to complete all transactions Found in both the service and the manufacturing sector Found in both the service and the manufacturing sector

17. Functions of Business Human Resources Human Resources Manages “ people ” relations within the company Manages “ people ” relations within the company Helps TRAIN workers to develop the skills and knowledge needed to be successful on the job Helps TRAIN workers to develop the skills and knowledge needed to be successful on the job Responsible for hiring employees Responsible for hiring employees Responsible for firing employees Responsible for firing employees Selects employee benefits and enrolls all employees in the benefits (insurance, retirement, etc.) Selects employee benefits and enrolls all employees in the benefits (insurance, retirement, etc.) Helps employees pursue educational opportunities Helps employees pursue educational opportunities

18. Key Terms Profit Profit Profit motive Profit motive Competition Competition Needs Needs Wants Wants Consumer Consumer Customer Customer Goods Goods Services Services

19. Types of Businesses Sole proprietorship Sole proprietorship Partnership Partnership Franchise Franchise Non-profit organization Non-profit organization Corporation Corporation Multi-national corporation Multi-national corporation