Introduc*on to Business

Marking

60% of the mark

Final Exam

40% of the mark Case studies prepare them at home in groups of 3 before the lesson

You will be asked to present your case study ndings

Class par*cipa*on also taken into account

Introduc*on to Business

1. Types of businesses and business ac*vi*es 2. Growth and Strategic Planning 3. Analyzing the compe**ve market and

business analysis 4. Developing a strategy and compe**on in

markets 5. Distribu*on 6. Finance and accounts

WHAT IS A BUSINESS AND WHAT IT DOES?

What is a business?

A BUSINESS is the organized eort of individuals to produce and sell, for a prot, the goods and services that sa*sfy societys needs.

What business do?

Meet the needs of stakeholders Buy inputs (raw materials, machinery, land) Produce outputs (goods and services) Focus on ecient use of resources Generate prots/surplus (non-for prot)

What business do?

Who are stakeholders: Anyone who has an interest or concern in the organisa6on: - Customers - Local community - Government - Suppliers - Owners - Creditors - Employees

What business do?

Take Inputs Process/Manufacture Output

Costs Fixed and Variable Revenue

Profit

Business objec*ves

Businesses exist to provide goods or services to its customers Whether they have to make prot or not they have to sa*sfy the needs and wants of its customers

Why set up a business?

There can be many dierent mo*va*ons for people to set up a business: - Fed up with working for someone else - Quality of life - Buzz of success - Feel in control - Financial reward - I could do beker than that

Why set up a business?

Advantages: Ease of Start-up and Closure Pride of ownership Reten*on of all prots Flexibility you are your own boss

Why set up a business?

Dissadvantages: Unlimited liability Lack of investment money High risk of going under (sta*s*cally)

Types of businesses

Private Sector: Business ac*vity owned nanced and controlled by private individuals

Sole Ownership Partnerships

Private Limited Companies Public Limited Companies (PLCs)

Co-opera*ves Franchises Chari*es

Types of businesses

Sole Proprietorship/Ownership: You are the only owner of the company Unlimited liablity Partnerships: General Partners at leat two partners sharing unlimited liability for the all debts Limited Partners General Partner(s) + Limited Partner(s);

- Limited Parner(s) invests money - no managerial responsibility - liability for losses - only his investment

Types of businesses

Public Limited- Liability Companies: Ownership stockholders Shares available at the stock market Private Limited-Liability Companies: Shares available privately Management Flexibility Tax Benets

Types of businesses

Co-opera*ves: Associa*on of individuals or rms whose purpose is to perform some business func*on for its members. Franchize: A privilege license granted to produce or sell a good or service under a patented process or trademarked name.

Types of businesses

Joint Ventures Agreement between two or more businesses crea*ng a separate business en*ty to achieve a specic goal. Non-prot organisa6ons Organized to provide a social, educa*onal, religious, or other service not to earn a prot - chari*es, museums, private schools and universi*es, Ensures limited liability.

Objec*ves of Private Sector Business

Objectives

Profit Survival

Share Price

Market Power Sales and Sales

Revenue

Efficiency

Quality and Innovation

Image and Reputation

Environment

Satisfaction

Social Issues

The Public Sector

Public Sector: Business Ac*vity owned, nanced and controlled by the state through government

or local authori*es Government key departments set policy and monitor

implementa*on Local Authori*es County Councils, District Councils, Parish Councils

Health Trusts Public Corpora*ons BBC

The Public Sector

Objec6ves of Public Sector Ac6vity Access

available to all regardless of loca*on or income Quality

high quality services that do not cut corners Aordability

services oered at prices that are cheaper than private sector or free at the point of use

Equity available to anyone whatever their background, status,

income, class, race, religion, etc

Range of Business Oered by the Public Sector

Roads Allotments Museums and Arts

Paths and Parks Environmental Health Cemeteries

Planning Street Ligh*ng Licensing

Care of the Elderly Social Services Waste Disposal

Schools Economic Development and Tourism Trading Standatds

Business Ac6vity

Business ac*vity can be conveniently divided into 4 sectors:

Primary sector Extrac*on of raw materials from earth mining,

quarrying, shing, agriculture, forrestry Secondary sector

Manufacturing processing raw materials into nished or semi-nished products

Business Ac6vity

Ter*ary sector Service industries leasure, transport, nance,

distribu*on, retailing, wholesaling, communica*ons Quarternary sector

Research and Hi-tech indus*res, training, educa*on, health

Business Ac6vity

Mul*ple Business Ac*vity e.g. BP involved in:

Oil explora*on and drilling (Primary) Rening oil produc*on of gas, petroleum, bitumen, lubricants, etc. (Manufacturing)

Distribu*on of petrol from reneries to petrol sta*ons and sales of petrol to consumer (Ter*ary)

Research and Development (Quarternary)