BUSINESS FUNDAMENTALS

What is a Business?

Review: Goods and Services These are things that satisfy people’s wants

and needs…

Goods: Cars, computers, phones, candy, etc. Services: Doctor, Accountant, Librarian

(provide a service), etc.

Look at your list of wants/needs and see whether you listed goods, services, or both.

What is a Business?

An organization that produces or sells goods or services to satisfy the needs and wants of consumers to make a profit.

Garage sale or Telus Mobility?

Businesses come in all sizes and shapes – some are local, some are regional, while others are national, and some are global

Local Business

Regional Business

http://www.workbc.ca/Statistics/Regional-Profiles/Pages/Regional-Profiles.aspx

Be sure to fill this information into your notes!

National Business

Global Business

As of 2015, over 1 billion people are using Microsoft products

For-Profit or Non-Profit? Profit – an organization that produces or sells

goods or services to satisfy the needs, wants, and demands of consumers for the purposes of making a profit ($$$)

Non-Profit – an organization that does not seek profit as its primary goal, but raises funds for people for a specific goal

Examples of For-Profit Businesses

For-Profit Business Goal: To make a profit by supplying goods and

services to meet consumer demands Profit = The income left over once all costs and

expenses are paid Revenue = Income generated from the sale of

goods/services Expenses – includes employee wages,

supplies/materials needed for the business (paper, printer ink, etc.)

Costs – the amount of money needed at each stage of production (buying raw materials, manufacturing those materials into a product, selling the product, etc.)

Simply remember…

Revenue – Expenses = Profit (or Loss)

Example: If a store sells gym equipment for $500, and costs & expenses add up to $350, the profit on the sale is $150

$500 - $350 = $150Revenue Expenses Profit (or Loss)

Now it’s your turn…

If a sporting good store sells a pair of shoes for $130, and the costs and expenses for the shoes total $50, what is the profit on the sale?

Remember:Revenue – Expenses = Profit (or Loss)

Profit?

Revenue – Expenses = Profit (or Loss)

$130 - $50 = $80 Revenue Expenses Profit

Importance of Profit

Obviously, a business needs profit in order to be successful

Profit = more $$$ going back into the business for growth and expansion

Profit = more $$$ to buy better goods or improved services

Profit = more $$$ in the owner’s pocket

No Profit? Sometimes, businesses will not make a

profit. If a business makes no profit, but the

owner is still able to pay debts (rent/lease for space, paying for raw materials, employee wages), the business is considered solvent.

Solvency means being able to pay debt and meet financial obligations.

Non-Profit Organizations

A non-profit organization is one that does not seek profit as its primary motive.

Seeks to raise money for a specific goal Example: Charities are non-profit

organizations

Now it’s your turn… In MS Word, copy and paste 6 different

pictures to represent the following:For-profit businessNon-profit businessLocal BusinessRegional BusinessNational BusinessGlobal BusinessLabel each picture with the business type!Due Thurs end of class: Print and submit to

Block B basket