Section 1.01

1. Section 1.01 The Purpose of Business

2. Purpose of Business • Businesses fulfill the needs and wants of the consumers by selling goods or services or both. • A consumer is someone who uses goods or services. At this level a consumer can be either an individual or another business. A customer (who purchases goods or services) may also be the consumer. • Needs are things that are necessary for survival. There are some basic needs like food, shelter, clothing, and water. • Wants are not necessary for our survival but add pleasure and comfort to our lives. Examples of wants are MP3 players, TVs, sodas, candy bars, jewelry, and make-up.

3. Purpose of Business Continued Services Goods • Products are physical goods or services that can satisfy consumers needs • Hairdresser • Dry Cleaner • Nail Technician • Waitress • Lawn Care • Babysitting • Clothing • Cars • Computers • DVDs • Personal Care Products

4. Reasons or Motivations to Start a Business • Profit Motive – The desire to make money. In short, people see opportunities where they can benefit financially in the marketplace. • Opportunities to meet the needs and wants of consumers. People see opportunities to help others and then develop a good or a service, which ultimately helps the consumer.

5. Section 1.01 Functions of Business

6. Function 1: Accounting • Is a system of recording and reporting financial activity and transactions. • Includes recording actives that deal with money in an accounting system so managers can make better decisions. • Examples on next slide

7. Accounting Continued • Examples: • Paying bills (Accounts Payable) • Collecting money from customers (Accounts Receivable) • Paying taxes • Preparing employee payroll checks • Reconciling bank statements • Investing cash • Purchasing inventory

8. Function 2: Management • Employees whose overall job is to make sure that the organization meets its goals and obligations in every department or function of business. • Management is effectively working with people and using resources to accomplish the organization's goals.

9. Function 3: Marketing • The process of satisfying the needs and wants of consumers through exchange. • Marketing is based on four “P’s”—Product, Price, Placement and Promotion. • Examples: • Preparing advertisements for TV, Radio, Newspapers, websites • Creating product displays for businesses • Informing stores about new products and services

10. Function 4: Information Tech. • The use of technology to share knowledge, facts, and data to others such as co-workers, customers, and suppliers. • Examples: • Maintaining e-mail accounts • Maintaining software applications • Maintaining processing systems • Includes maintaining the hardware for all technology used.

11. Function 5: Operations • This function of business is considered the “back office” and involves all the behind the scenes paperwork that must be finished in order for the transactions to be completed. • Operations are found in both the service sector and the manufacturing sector.

12. Function 6: Human Resources • Manages the personnel relations within a company; helps develop the skills and knowledge necessary to be successful while on the job. • Examples: • Hiring and firing of employees and the paperwork involved • Selecting benefits a company offers and enrolling employees in the benefit programs: • Insurance • Retirement plan • Credit union membership dues, and other deductions • Coordinating/facilitating educational opportunities for employees