Intro to Business

1. Intro to Business Unit Two Business Operations Chapter 5 Business in Our Economy

2. GOALS • Distinguish between the four basic kinds of businesses. • Recognize seven kinds of activities performed by businesses. • Understand how jobs are created in our economy.

3. Four Basic Kinds of Businesses • Extractors • Grows products or takes raw materials from nature. • Examples: • farmer who grows cotton to make jeans • silver and coal miners • fishers; oil pump; produce farm, lumber mill

4. Four Basic Kinds of Businesses • Manufacturers • Takes extractor’s products and changes them into a form that consumers can use. • Completely produce a product or a part of many stops • Jeans: textile mill makes cotton into yarn, yarn into cloth, plant dyes & prints cloth, clothing manufacturer takes cloth and makes it into jeans. • 3 Types of Manufacturing Businesses • Custom – specially designed (golf clubs) • Mass Production – large qty of identical products (cars) • Processing – changes form or materials (grain to flour)

5. Four Basic Kinds of Businesses • Marketers • Businesses that move goods from producers to consumers (Wholesalers, Retailers) • Marketing Includes (4 P’s) : • Transporting goods (Distribution – Place) • Selling goods at reasonable value (Price) • Identify, develop and test new products (Product) • Packaging goods (attractive/convenient) (Product) • Store goods (Warehouses) (Distribution - Place) • Design store windows (Promotion) • All of these marketing activities add value to the products by bringing them to where the consumer is, at the time they are wanted, in the assortment wanted, and at the prices consumers are willing to pay.

6. Four Basic Kinds of Businesses • Service Businesses • Business which does things for you rather than making a product for you. • Examples: • Hair Dresser or Barber • Oil Change or Car Wash • Tax Preparation • Child Care or Pet Care • Transportation (Airlines, Bus, Train) • Landscaping

7. Seven Business Activities • Generating Ideas • New Product or Improvement on Product • Raising Capital • Start-up $ or Improvement $ from Loans • Buying Goods & Services • Resale Products or Business Use Supplies • Using Human Resources • Recruit, Employ, Train, & Appraise Employees • Marketing Goods & Services • Activities used to Develop, Place, Price and Promote Products • Producing Goods & Services • Quality, Timely, Appropriate Quantity, Competitive Cost • Keeping Records • Decision Making – profit/loss, management, Gov. reporting

8. Jobs Creation • New restaurant opens; hires employees • Employee gets paid and buys groceries. • Grocer works and get paid. Pays Bills. • Collector works. Gets paid. Goes out to eat. • Continuous Cycle • More local sales = more business income = more employees needed for high demands • Businesses attract other businesses

9. Intro to Business Unit Two Business Operations Chapter 6 Business Structures

10. GOALS • Understand how ownership differs among sole proprietorships, partnerships, and corporations. • Grasp the advantages/disadvantages of the three major types of business ownership. • Learn the five functions of managers. • Recognize three specialized forms of business organization.

11. Types of Business Ownership (Pg 69) • Sole Proprietorship • Owned by 1 person (Small Firms) • Complete responsibility of business decisions • Partnership • Managed by small group (usually 2-3 people) • Written agreement of shared profits/losses & decisions • Unlimited liability for the debts of their business. • Corporation • Number of owners (shareholders) • Operated under state Certification of Incorporation • Acts as individual on behalf of group shareholders • Legal entity – existence separate from its owners

12. Advantages vs. Disadvantages

13. Five Functions of Managers (Pg 72) • Managers are employees who are responsible for coordinating the resources within a business. Five Functions of a Manager • Planning • Thinking, gathering, analyzing info to make decisions (goals) • Organizing • Process of determining what needs to be done and when. Assigning jobs and responsibilities.

14. Five Functions of Managers (Pg 72) • Staffing • Activities to find, select, hire, train, appraise & reward staff • Leading • Direct/influence staff; meet goals, follow plan/procedure • Effective leaders inspire workers to willingly perform their jobs and accept their share of responsibility for accomplishing the goals of the business. • Good human relations and communications skills • Controlling • Comparing what actually happened to what was planned. • Did business reach it’s goals? • Using standards set up in the planning stage

15. Three Specialized Forms of Business Organization (Pg 77) • Franchises • A written contact granting permission to sell someone else’s product/service in a prescribed manner, over a certain period of time, and in a specified territory. • Franchisee – buys into the franchise, apply for rights • Franchisor - parent company/owner, grants the rights • Details: • Franchise Agreement – state rights/ duties of both parties • Standardized business – same at every location • Franchisor collects portion/percentage of sales • Examples: fast food, car dealerships, motel chains

16. Three Specialized Forms of Business Organization (Pg 77) • Cooperatives • Owned by the members it serves and is managed in their interest. • Consumer Cooperative – consumers who buy goods more cheaply together than they could individually. • Producer’s Cooperative – farmers organization that markets products together . • Profits split among members and portion often kept to expand business.

17. Three Specialized Forms of Business Organization (Pg 77) • Non-Profit Organizations • Municipal Corporation – municipality • Has own officials, police, schools, fire dept • Provides street repairs, street lighting, of services • Buys supplies like a business but buys them under corporate name of city. • Examples: Private Colleges, American Red Cross, Boy Scouts of America, FBLA • Unlike a business organization, services are provided for its citizens with money from taxes levied rather than making a profit.

18. Intro to Business Unit Two Business Operations Chapter 7 Manager as Leader

19. GOALS • Discuss the common characteristics of effective leaders. • Explain the five human relations skills needed by managers. • Identify four types of influence that leaders use. • Describe the two main types of leadership styles.

20. Leadership Characteristics (Pg 88)

21. Five Human Relations Skills (Pg 89) • Self Understanding • Must understand their own strengths and weaknesses before they can assess staff. • Understanding Others • Get to know each person, their skills, abilities, strengths and weaknesses. • Treat everyone alike but use their individual skills • Recognizing similarities to build stronger team

22. Five Human Relations Skills (Pg 89) • Communication • Extremely important to communicate on all levels. • Formal – presentation, established and approved • Informal – common but not official (passing in the hall) • Internal – within the company • External – with people outside the company • Vertical – up and down levels of management • Horizontal – across the same levels (tier 2 to tier 2) • Oral – word of mouth • Written – notes, letters, reports, emails, instant messenger

23. Five Human Relations Skills (Pg 89) • Team Building • Helps people understand each other and their responsibilities • Managers must identify problems within a group and fix them quickly. • Developing Job Satisfaction • Managers influence how employees feel about their job • Daily difficulties can lead to employee dissatisfaction • Showing concern and support and solving employee problems help avoid employee dissatisfaction.

24. Four Types of Influence (Pg 91) • Position Influence • Ability to get other to accomplish tasks because of the position the leader holds. • Influences based on employee’s job rating, wages, potential promotion • Reward Influence • Ability to give or withhold rewards • Rewards - $ or job benefits, recognition, praise

25. Four Types of Influence (Pg 91) • Expert Influence • Arises when group members recognize that the leader has a special expertise area. • Experience equals knowledge • IdentityInfluence • Personal trust & respect members have for leader. • Leaders looks out for their best interest, gain support.

26. Two Main Types of Leadership (Pg 93) • Tactical Management • More directive and controlling • Manger makes decisions • Close contact with employees with working • Strategic Management • Less directive and involve employees in decisions • Trusts employees to work w/o direct supervision • Will seek advice on important decisions • Mixed – mixture of both styles b

27. Intro to Business Unit Two Business Operations Chapter 8 Producing & Marketing Goods & Services

28. GOALS • List common marketing activities and define the marketing concept. • Explain the two steps in marketing planning. • Explain the advantage of small businesses in providing customer service.

29. Role of Marketing (Pg 102) • Product/Service Planning • Assists in design and development by gathering information and testing ideas. • Purchasing • Identifies and obtains the product (service) needed for marketing activities • Financing • Makes sure financing and credit are available to support both the purchase and sale of product.

30. Role of Marketing (Pg 102) • Distribution • Involves getting the products to consumers (methods and locations) • Pricing • Sets prices and payment methods • Risk Management • Provides security and safety for products and people and reduces business risk.

31. Role of Marketing (Pg 102) • Marketing Information Management • Obtains and organizes information needed to make marketing decisions. • Promotion • Involves communicating with consumers to encourage purchases.

32. Two Steps in Marketing Strategy • Identify a target market. • Target Market – clearly identified group of consumers with needs (business satisfies need) • Develop a marketing mix • Marketing Mix - Combo of marketing elements designed to meet the needs of target market • Product/Service – anything offered to target market • Place/Distribution – location/method of product availability • Price – what the customer pays and method of payment • Promotion – communicate/encourage purchases

33. Customer Service • Advantage of small businesses in providing customer service • Personalized attention • Know your target market better • Specialized products (customize) • Large companies can offer more products but with less personal attention and customization.