Definition of Business

1. What is a Business?
Individuals or organizations trying to earn a
profit by providing products that satisfy
people's needs. Or
Business is any activity that seeks profit by
providing goods or services to others
• Businesses provide you with necessities.
• Businesses also provide people with the
opportunity to become wealthy
Introduction to Business

2. Introduction to Business
Ronald define business as “an organization that
produce or sells goods and services to make
profit.
In the words of Davis Business may be defined
as an activity in which different person
exchange something of value whether goods or
services for mutual gain or profit.

3. What Business does
• A business must organize the people and
equipment to provide the product.
• People within the organization manage the
company’s resources to produce the
product.
• The company markets the product or
service by deciding where to sell it and
how to advertise it.

4. What Business does
 Who are the stakeholders? – Anyone who has
an interest in the success of a business
• Customers
• Managers
• Employees
• Owners
• Local Community/Environment
• Suppliers
• Government
• Creditors

5. What Business does
Take Inputs Process/Manufacture Output
Costs – Fixed and Variable Revenue
Profit

6. What is a product?
• A good or service with tangible and intangible
characteristics that provide satisfaction and
benefits
The Nature of Business

7. Products
Tangible Goods & Services
Tangible Goods
Automobile
Computer
Loaf of bread
Television
Services
Dry cleaning
Photo processing
Checkup at doctor’s
Movie star performance
1-7

8. Graphic Organizer
GOODS
Tangible
Material
Things
Economics’ Starting Points
SERVICES
Tasks
Performed
RESOURCES
Anything people can
use to make or obtain
what they want or need
NEEDS
WANTS
Things you wish you
could have
Necessary wants

9. Business’s Motivations
• Profit is the amount of money left over after
a business has paid for the cost of producing
its goods and services.
• Profit is the motivation for taking the risk to
start a business.
• A business is profitable when sales are high
and costs are kept low.

10. Business’s Motivations
• Opportunity to meet wants and needs of
consumers
• Companies thrive on competition, or the
contest between businesses to win
customers.
• Businesses are investment opportunities
for individuals—future income

11. 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

12. Business objectives
Business objectives
Economic Social
Ample supply of
quality goods at fair
prices for the
community
Fair deal to workers
Fair return to
investors
Fair dealings with
suppliers of
materials
Satisfactory profit
Creation of
customers
Innovation