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Introduction to Business

Introduction to Business. HOMEWORK. Read Chapters 5 & 6. OBJECTIVE. Be able to define the term “Business”. “Business”. An activity that satisfies economic needs by planning, organizing, & controlling resources to produce & market goods & services. Business. An activity . . .

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Introduction to Business

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  1. Introduction to Business

  2. HOMEWORK Read Chapters 5 & 6

  3. OBJECTIVE Be able to define the term “Business”

  4. “Business” An activity that satisfies economic needs by planning, organizing, & controlling resources to produce & market goods & services

  5. Business • An activity . . . • that satisfies . . . • economic wants & needs . . . • by planning, • organizing,

  6. Business • & controlling. . . • resources . . . • to produce . . . • & market . . . • goods & services.

  7. “Business”(Revisited) An activity that satisfies economic needs by planning, organizing, & controlling resources to produce & market goods & services

  8. BusinessActivity • For the businesses listed below, explain how each meets the definition of business: • McDonald’s • Nichols Hardware • Food Lion • Google • (Your Choice)

  9. OBJECTIVE Be able to describe the three functions of business

  10. Three Functions of Business • Production • Marketing • Management

  11. Three Functions of Business • Production - Creating, growing, manufacturing, or improving products • Marketing - Activities that move goods/services from producers to consumers • Management - Achieving company goals by directing its resources (Make $ or else!!!)

  12. OBJECTIVE Be able to define the term utility & describe all of the different types of utilities

  13. UTILITY • Defined as “value added”

  14. UTILITY TYPESHow we “add value” • Form • Place • Time • Information • Possession

  15. UTILITY TYPESHow we “add value” • Form: • - changing item’s shape or creating item • Place: - By putting a product where the consumer can get it easily • Time: - By making an item available when the consumer needs it Oil, for example

  16. UTILITY TYPESHow we “add value” • Information: - By letting people know how the item will benefit them • Possession: - By allowing people to own the product Oil, for example

  17. UTILITY TYPESHow we “add value” to the computer • Form: - By changing an item’s shape or creating an item • Place: - By putting a product where the consumer can get it easily • Time: - By making a product available when the customer needs it

  18. UTILITY TYPESHow we “add value” to the computer • Information: - By letting people know how the item will benefit them • Possession: - allowing people to own the product

  19. OBJECTIVE Be able to describe the “social responsibilities” of a business including its ethical treatment of customers

  20. Social Responsibility & Ethics • Social Responsibility - What a business “should” do in the eyes of the majority of the population • Ethics - Guidelines for “good” or acceptable behavior in the eyes of the majority of the population

  21. Areas of Social Responsibility • Consumption of Natural Resources • Use of resources & recycling efforts • Environmental Issues • Damage to & protection of the environment • Worker Issues • Treatment (handicapped, health-care, etc.) • Pay (amounts, docking, profit-sharing, telecommuting, etc.)

  22. Areas of Social Responsibility Consumerism - “Using legal, moral, & economic pressure on business protect the consumer’s rights ” • To be protected against fraud, deceit, & misleading statements & to be educated in wise financial decisions • To be protected from unsafe products • To have a choice in products & services • To have a say in product/marketing decisions

  23. LEGAL CONSIDERATIONS • Statutory Law - Laws that are written by congress or other ruling bodies & then enforced by law enforcement institutions (police, FBI, etc.)

  24. LEGAL CONSIDERATIONS • Common Law - Laws that are based on the actions of a “reasonable person,” often determined in court. (negligence, for example)

  25. OBJECTIVE Be able to define “Entrepreneurship” and identify its advantages & disadvantages

  26. ENTREPRENEURSHIP Owning & operating your own business

  27. Advantages Disadvantages ENTREPRENEURSHIPOwning & Operating Your Own Business Discussion

  28. Advantages Freedom Satisfaction $$$$$ Self-Esteem Disadvantages RISK!!! Loss of income Long & irregular hours Need for self-discipline ENTREPRENEURSHIPOwning & Operating Your Own Business

  29. OBJECTIVE Be able to describe the most common personality traits of successful entrepreneurs

  30. ENTREPRENEURS • Personality Traits of Successful Entrepreneurs: (Discussion)

  31. ENTREPRENEURS • Personality Traits of Successful Entrepreneurs • confidence • skill • risk-taker • competitive • determined • hardworking

  32. ENTREPRENEURS • Personality Traits of Successful Entrepreneurs • flexible • disciplined • healthy • experienced • goal-oriented • people-person

  33. OBJECTIVE Be able to describe the three major types of business ownership & discuss their advantages & disadvantages

  34. SOLE PROPRIETORSHIP • Owned & operated by one person (Usually highly skilled) • employs 95% of the workforce • examples include plumbers, dentists, beauticians, small shop owners, etc.

  35. PARTNERSHIP • Two or more people legally agree to share the ownership & responsibilities of a business

  36. CORPORATION • A charted (legal) entity that operates apart from the owners • the corporation will often sell stock • the stockholders will elect a board of directors to run the company

  37. CORPORATIONS(Discussion) • Doctors will often incorporate their practice; Why? (Discussion)

  38. Advantages Disadvantages SOLE PROPRIETORSHIP (Discussion)

  39. Advantages Disadvantages PARTNERSHIPS (Discussion)

  40. Advantages Disadvantages CORPORATIONS (Discussion)

  41. Advantages easy to start decisions are easy to make low taxes fewer gov. regulations you get all the money!! Disadvantages capital ($) is limited can’t have “group-think” no help available w/ other skills big Risk SOLE PROPRIETORSHIP

  42. Advantages more ideas & opinions to consider you have help to run the business the risk is shared more capital available Disadvantages more ideas & opinions to consider (?) harder to make decisions personally at risk death of a partner causes problems PARTNERSHIPS

  43. Advantages liability is limited to your investment it is easy to raise more capital (sell more stock) it is easy to get into & out of the corporation (sell or buy stock) Disadvantages often a complex & changing ownership picture making decisions difficult highly regulated higher tax rates CORPORATIONS

  44. OTHER FORMS OF BUSINESS OWNERSHIP • Franchise: • a legal agreement to operate a business in the name of a recognized company. AdvantagesDisadvantages Franchisor offers help Expensive to buy Planning already done Limited creativity

  45. OTHER FORMS OF BUSINESS OWNERSHIP • Subchapter S Corporation: • A small business taxed like a sole proprietorship or partnership but w/ limits: • No more than 35 stockholders • Incorporated in the US • Max. 20 % of income comes from investments • Max. 80% of revenue comes from overseas

  46. INTRODUCTION TO BUSINESSQuiz Review

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