WHAT DO BUSINESSES DO? UNIT 1.1
Look out for the     ...   This means you have to DO   SOMETHING!
WHAT IS A BUSINESS? <ul><li>A business is a type of  organisation </li></ul><ul><li>It involves  people   and  resources <...
What are Goods? <ul><li>Items which you can  see  and  touch  and carry away with you </li></ul><ul><li>Examples include c...
Goods and Services satisfy our  Needs  and  Wants Needs ... The things we  must have  in order to survive: <ul><li>Water <...
It is human nature <ul><li>Never to be satisfied with what we have - we  always  want more </li></ul><ul><li>Which is  goo...
BUSINESS AIMS <ul><li>The main aim of most businesses or organisations is to sell their goods or services to make a  profi...
<ul><ul><ul><li>   Answer the questions on Worksheet What Businesses Do – worksheet 1 </li></ul></ul></ul>
CATEGORISING BUSINESSES Businesses may be put into categories based upon...  <ul><li>Size </li></ul><ul><li>Market  </li><...
Size of Business  Businesses may be described as  Small ,  Medium  or  Large
SMALL ... <ul><li>Often owned and run by one person - a sole trader </li></ul><ul><li>Or they may be run as a partnership ...
MEDIUM ... <ul><li>Usually owned and run by a group of people - these may be partners, directors or shareholders </li></ul...
LARGE  <ul><li>Usually owned by a large number of people - the shareholders - and run on their behalf by directors </li></...
Ownership Businesses can also be classified according to who owns them ... THE  PRIVATE  SECTOR <ul><li>Owned  by one or m...
THE  PUBLIC  SECTOR <ul><li>Nationalised industries, local authority services, schools and hospitals </li></ul><ul><li>Own...
Type of Product Another category is based on what is made ...
PRIMARY  SECTOR <ul><li>oil </li></ul><ul><li>fishing </li></ul><ul><li>forestry </li></ul><ul><li>agriculture </li></ul><...
SECONDARY  SECTOR <ul><li>Deals with  manufacturing  goods – turning the raw materials into finished products </li></ul><u...
TERTIARY*  SECTOR <ul><li>(* Pronounced “tershary” - just means third)   </li></ul><ul><li>Offers  services  rather than g...
All businesses and organisations have a number of things in common <ul><li>Name </li></ul><ul><li>Resources (including peo...
Smaller businesses ... <ul><li>May be quite  informal , and may not have anything written down about Aims, Rules and Image...
Larger firms ... <ul><li>Are more likely to be  formal  and have everything written out. </li></ul>
<ul><ul><ul><li>   Your school is an organisation. </li></ul></ul></ul><ul><ul><ul><li>Fill in the blanks on Worksheet </...
GOODS AND SERVICES <ul><li>We all use hundreds of goods and services every day without thinking much about them ... </li><...
<ul><li>(unless we can’t get them, such as when the water goes off and we can’t fill the kettle or have a shower!) </li></ul>
Think about ... <ul><li>What you did when you got up this morning –  </li></ul><ul><li>and the goods or services which you...
<ul><li>These might include cornflakes, bowl, spoon, milk, fridge, toothbrush, clothes, bus </li></ul>
<ul><ul><ul><li>   On your worksheet What Businesses Do – worksheet 3 make a list of the goods and services you used this...
But these products don’t just appear by magic! <ul><li>What happens to them before they reach you? </li></ul>
Goods go through many steps before they reach you, the consumer ... <ul><li>For example, take a newspaper –   </li></ul>
Life of a Newspaper <ul><li>A tree was grown  </li></ul><ul><li>It was cut down </li></ul><ul><li>It was transported to a ...
Then ... <ul><li>The paper was transported to the printing works  </li></ul>
<ul><li>The newspaper was transported to the shop ... </li></ul>
<ul><li>Where it was sold to you! </li></ul><ul><li>This is known as the  </li></ul><ul><li>Chain of Production </li></ul>
Chain of Production The process of making goods, where raw materials are turned into final products. INPUTS Raw Materials ...
<ul><ul><ul><li>   Now choose  ONE  item that you used this morning.  On Worksheet What Businesses Do – worksheet 4 write...
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What Do Businesses Do?

  1. 1. WHAT DO BUSINESSES DO? UNIT 1.1
  2. 2. Look out for the  ... This means you have to DO SOMETHING!
  3. 3. WHAT IS A BUSINESS? <ul><li>A business is a type of organisation </li></ul><ul><li>It involves people and resources </li></ul><ul><li>Goods or services are produced </li></ul>
  4. 4. What are Goods? <ul><li>Items which you can see and touch and carry away with you </li></ul><ul><li>Examples include chocolate, clothes or cars </li></ul><ul><li>Goods can be durable (longlasting – eg cars) or non-durable (used up quickly – eg chocolate) </li></ul>What are Services? <ul><li>Services are things that you might want someone to do for you but which you cannot touch – they are intangible. </li></ul><ul><li>Examples of services include – doctors, dentists, lawyers, insurance companies etc </li></ul>
  5. 5. Goods and Services satisfy our Needs and Wants Needs ... The things we must have in order to survive: <ul><li>Water </li></ul><ul><li>Food </li></ul><ul><li>Shelter </li></ul><ul><li>Clothing </li></ul>Wants ... The things we would like to have (but don’t really need ) <ul><li>Fashion clothes </li></ul><ul><li>CDs </li></ul><ul><li>Car </li></ul><ul><li>Holiday </li></ul>
  6. 6. It is human nature <ul><li>Never to be satisfied with what we have - we always want more </li></ul><ul><li>Which is good news for business! </li></ul>OK, I’ve got the flat and the Ford Focus, which I really wanted, but a house and a Porsche would be better ….
  7. 7. BUSINESS AIMS <ul><li>The main aim of most businesses or organisations is to sell their goods or services to make a profit ... </li></ul>… but there are some which do not - <ul><li>These are charities , which raise funds by a variety of means and use them to help the needy, or </li></ul><ul><li>Organisations set up to provide a service to the public </li></ul>
  8. 8. <ul><ul><ul><li> Answer the questions on Worksheet What Businesses Do – worksheet 1 </li></ul></ul></ul>
  9. 9. CATEGORISING BUSINESSES Businesses may be put into categories based upon... <ul><li>Size </li></ul><ul><li>Market </li></ul><ul><li>Ownership </li></ul><ul><li>Product </li></ul>
  10. 10. Size of Business Businesses may be described as Small , Medium or Large
  11. 11. SMALL ... <ul><li>Often owned and run by one person - a sole trader </li></ul><ul><li>Or they may be run as a partnership - between 2 and 20 people </li></ul><ul><li>They employ less than 50 people </li></ul><ul><li>They usually sell their good and services locally </li></ul><ul><li>Opticians, solicitors, accountants </li></ul><ul><li>Tradespeople - plumbers, electricians, hairdressers </li></ul><ul><li>Small shops </li></ul>Examples of small businesses ...
  12. 12. MEDIUM ... <ul><li>Usually owned and run by a group of people - these may be partners, directors or shareholders </li></ul><ul><li>They employ between 50 and 250 people </li></ul><ul><li>May have branches and sell goods nationally </li></ul>Examples of Medium-size businesses ... <ul><li>Manufacturers of clothing, furniture </li></ul><ul><li>Car hire companies </li></ul><ul><li>Theatres </li></ul><ul><li>Insurance Companies </li></ul>
  13. 13. LARGE <ul><li>Usually owned by a large number of people - the shareholders - and run on their behalf by directors </li></ul><ul><li>They employ more than 250 people </li></ul><ul><li>May produce and sell goods internationally </li></ul>Examples of Large Businesses ... <ul><li>Car manufacturers eg Ford, Nissan </li></ul><ul><li>Chainstores eg Marks & Spencers </li></ul><ul><li>Finance companies eg Bank of Scotland </li></ul><ul><li>Oil companies eg Esso </li></ul>
  14. 14. Ownership Businesses can also be classified according to who owns them ... THE PRIVATE SECTOR <ul><li>Owned by one or more persons (sole traders, partners and shareholders) </li></ul><ul><li>Started in order to provide goods or services </li></ul><ul><li>They use private money from owners or lenders </li></ul><ul><li>Aim to make a profit </li></ul><ul><li>Examples include – McDonalds, BP, Florists, Newsagents etc </li></ul>
  15. 15. THE PUBLIC SECTOR <ul><li>Nationalised industries, local authority services, schools and hospitals </li></ul><ul><li>Owned by the state </li></ul><ul><li>They use public money from taxes </li></ul><ul><li>Supply Public Services, eg Hospitals, Schools, Police, Armed Forces etc </li></ul>THE VOLUNTARY SECTOR <ul><li>Charities, youth clubs, golf clubs </li></ul><ul><li>Run by officials who may volunteer or be elected, and are often unpaid </li></ul><ul><li>They use money from donations, gifts and fund-raising </li></ul>
  16. 16. Type of Product Another category is based on what is made ...
  17. 17. PRIMARY SECTOR <ul><li>oil </li></ul><ul><li>fishing </li></ul><ul><li>forestry </li></ul><ul><li>agriculture </li></ul><ul><li>quarrying </li></ul><ul><li>mining </li></ul>This is the first stage of the production process where raw materials and natural resources are farmed or extracted from the land or sea.
  18. 18. SECONDARY SECTOR <ul><li>Deals with manufacturing goods – turning the raw materials into finished products </li></ul><ul><li>car manufacturers </li></ul><ul><li>engineering </li></ul><ul><li>shipbuilding </li></ul><ul><li>“ white goods” manufacturers (including fridges, freezers, dishwashers etc) </li></ul><ul><li>housebuilding </li></ul>
  19. 19. TERTIARY* SECTOR <ul><li>(* Pronounced “tershary” - just means third) </li></ul><ul><li>Offers services rather than goods </li></ul><ul><li>insurance </li></ul><ul><li>banking </li></ul><ul><li>education </li></ul><ul><li>hairdressing </li></ul><ul><li>tourism & leisure </li></ul><ul><li>armed forces </li></ul>
  20. 20. All businesses and organisations have a number of things in common <ul><li>Name </li></ul><ul><li>Resources (including people) </li></ul><ul><li>Aims </li></ul><ul><li>Rules/procedures </li></ul><ul><li>Image </li></ul>
  21. 21. Smaller businesses ... <ul><li>May be quite informal , and may not have anything written down about Aims, Rules and Image. Information often passed on verbally . </li></ul>
  22. 22. Larger firms ... <ul><li>Are more likely to be formal and have everything written out. </li></ul>
  23. 23. <ul><ul><ul><li> Your school is an organisation. </li></ul></ul></ul><ul><ul><ul><li>Fill in the blanks on Worksheet </li></ul></ul></ul><ul><ul><ul><li>What Businesses Do – worksheet 2 </li></ul></ul></ul> <ul><ul><ul><li> Now do the same for HMV </li></ul></ul></ul>
  24. 24. GOODS AND SERVICES <ul><li>We all use hundreds of goods and services every day without thinking much about them ... </li></ul>
  25. 25. <ul><li>(unless we can’t get them, such as when the water goes off and we can’t fill the kettle or have a shower!) </li></ul>
  26. 26. Think about ... <ul><li>What you did when you got up this morning – </li></ul><ul><li>and the goods or services which you used before you got to school </li></ul>
  27. 27. <ul><li>These might include cornflakes, bowl, spoon, milk, fridge, toothbrush, clothes, bus </li></ul>
  28. 28. <ul><ul><ul><li> On your worksheet What Businesses Do – worksheet 3 make a list of the goods and services you used this morning. </li></ul></ul></ul>
  29. 29. But these products don’t just appear by magic! <ul><li>What happens to them before they reach you? </li></ul>
  30. 30. Goods go through many steps before they reach you, the consumer ... <ul><li>For example, take a newspaper – </li></ul>
  31. 31. Life of a Newspaper <ul><li>A tree was grown </li></ul><ul><li>It was cut down </li></ul><ul><li>It was transported to a mill where it was turned into pulp </li></ul><ul><li>The pulp was made into paper ... </li></ul>
  32. 32. Then ... <ul><li>The paper was transported to the printing works </li></ul>
  33. 33. <ul><li>The newspaper was transported to the shop ... </li></ul>
  34. 34. <ul><li>Where it was sold to you! </li></ul><ul><li>This is known as the </li></ul><ul><li>Chain of Production </li></ul>
  35. 35. Chain of Production The process of making goods, where raw materials are turned into final products. INPUTS Raw Materials (Money, Premises, People) PROCESS Manufacturing stages OUTPUTS Finished Goods (sold on to customers) At every stage in the production process, value is added, eg a house is worth more than the bricks and plaster it started out as.
  36. 36. <ul><ul><ul><li> Now choose ONE item that you used this morning. On Worksheet What Businesses Do – worksheet 4 write down all the steps it went through before reaching you. </li></ul></ul></ul>
  37. 37. End of Unit

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