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Chapter 6

Chapter 6 . Types & Functions of Businesses-6.2. Types of Businesses . Producers gather raw goods in original state from natural resources. Agriculture, mining, fishing, forestry 2. Processors change raw materials into more finished products. Require further processing—

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Chapter 6

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  1. Chapter 6 Types & Functions of Businesses-6.2

  2. Types of Businesses • Producers gather raw goods in original state from natural resources. Agriculture, mining, fishing, forestry 2. Processorschange raw materials into more finished products. Require further processing— -Sugar cane into sugar -Crude oil into gasoline -Iron ore into steel

  3. Types of Businesses-cont’d • 3. Intermediaries & Wholesalers • a. Intermediary moves goods from one business to another. • b. Buys, stores, then resells goods. • Wholesalers distribute goods. • Also known as distributors. • Clothing wholesaler—buys thousands of jackets from several manufacturers, then • Divides them into smaller quantities & sells them to retailers.

  4. Retailers & Service Businesses • 4. Retailer purchases from wholesaler & sells to consumers. • Examples: service stations, auto dealers • Service businesses employ ¾ of workforce • Perform tasks—medical clinics, law firms • Provide conveniences—taxi companies, cleaning services

  5. Functions of Businesses • 1. Production & procurement • Production is the process of creating, expanding, manufacturing or improving goods/services. • Procurement is the buying & reselling of goods that have already been produced. • Wholesalers buy goods from producers to resell to retailers & other wholesalers.

  6. Functions – cont’d • 2. Marketing – process of planning, pricing, promoting, selling & distributing ideas, goods & services. • Involves getting consumer to buy product or service. • Marketers make decisions based on market research of trends & consumer habits.

  7. Functions – cont’d • 3. Management is process of achieving company goals by: • planning, • organizing, • leading, • controlling & evaluating effective use of resources.

  8. 4. Finance/Accounting • Finance – manage money & analyze financial statements to make future decisions. • Accounting – maintaining & checking records, handling bills & preparing financial reports for a business.

  9. The functional areas of business depend on each other. • Companies benefit when all functional areas work together.

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