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Purpose and functions of business

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  • 1. Purpose and Functions of Business
  • 2. What do businesses do? Businesses fulfill the needs and wants of consumers by selling goods, services or both to consumers.
  • 3. Goods = tangible items (e.g. Clothes, Cars, Computers, etc) Services = intangible items (e.g. hairdresser, dry cleaner, babysitting, etc)
  • 4. Needs vs.
  • 5. Needs = Must have to Survive (e.g. Food, Water, Shelter, etc) Wants = Desired goods and services (e.g. iPad, Diamonds, Cute Fluffy Puppies, etc)
  • 6. Motivation… to start a business
  • 7. Profit Motive The desire to make money; see the opportunity to make money in the marketplace. Profit = revenue - expense Businesses are also investment opportunities for individuals for future income.
  • 8. Opportunity to: meet wants and needs of consumers, and/or increase competition in the marketplace.
  • 9. Functions of Business
  • 10. Accounting: Records and reports financial activity and transactions Examples •Paying bills •Collecting money from customers •Paying taxes •Preparing employee payroll checks •Reconciling bank statements •Investing cash
  • 11. Management: Organization : assigns roles and responsibilities of group and individuals. Control : makes sure goals are met Planning: develops plans and forecasts for the future
  • 12. Marketing Satisfies the needs and wants of consumers through exchange Based on four “P’s” Product Price (establishing the price of the product) Placement (placing the product in attractive and convenient sales locations) Promotion (advertising)
  • 13. Information Technology Uses technology to share knowledge, facts, and data to others (co-workers, customers, and suppliers) Examples Maintains e-mail accounts Maintains software applications Maintains processing systems Maintains hardware for all technology used
  • 14. Operations Involves behind the scenes paperwork required to complete all transactions. Found in both the service and the manufacturing sector.
  • 15. Human Resources Manages “people” relations within the company Helps workers develop the skills and knowledge needed to be successful on the job Responsible for hiring and firing of employees Selects employee benefits and enrolls all employees in the benefits (insurance, retirement, etc.) Helps employees pursue educational opportunities