Transcript Business in Our Economy - Solanco School District Moodle

Business in Our Economy
Chapter Five
Introduction to Business
Four Kinds of Business
 Extractors
 Manufacturers
 Marketers
 Service
businesses
Manufacturer

Takes the
extractor’s products
or raw materials and
changes them into a
form that consumers
can use.
Marketer


A business that moves
goods from producers
to consumers. These
activities are called
marketing.
Includes transporting,
selling, development
and testing of new
products, packaging,
and store displays.
Service Businesses



A business that does
things for you instead of
making or marketing
products.
Service businesses are
the fastest growing part
of our business world.
By 2006 3 out of 4
workers will work for a
service business.
Extractors


A business that grows
products or takes raw
materials from nature.
Most food products and
raw materials need
some processing before
the consumer can use
them.
Three Types of Manufacturing



Custom manufacturing—building a specific and
unique product to meet the needs of one
customer.
Mass production—a large number of identical
products are assembled using a continuous,
efficient procedure. The standard in U.S.
manufacturing for almost a century. (Henry Ford)
Processing– changes the form of materials so
they can be consume or used to manufacture
other products. Ex. Turning crude oil into
gasoline.
Seven Business Activities

Generating Ideas
 Raising Capital
 Buying Goods and Services
 Using Human Resources
 Marketing Goods and Services
 Producing Goods and Services
 Keeping Records
Generating Ideas

The first step in a
business is thinking of a
product or service.
 The product or service
must meet consumers’
needs or wants.
 New ideas must be
generated in order to
survive.
Raising Capital




Businesses need
capital (money) to
operate.
Start-up money must be
found to start a
business.
Examples: Owner’s
personal funds, loans
from banks, or
investors.
Existing businesses
must continue to raise
money.
Buying Goods and Services

Businesses buy
goods and services
for resale and their
own use.

Examples: products
for resale,
supplies,equipment,
and advertising
space.
Using Human Resources



Businesses cannot
operate without people.
Businesses must
recruit, interview, test,
train, and perform job
appraisals.
Some businesses have
human resource
departments to perform
the above functions.
Marketing Goods and Services

Many marketing
activities are done
before the product is
produced—design
and development,
and market
research.
 Getting the word out
to consumers about
the product.
Producing Goods and Services

You must make the
product or perform
the service.
 Must be produced at
the scheduled time,
in the correct
quantity and quality.
 You “do” the
business.
Keeping Records



All businesses must
keep records.
Many use computers to
keep records.
Businesses must keep
records because



To determine if a profit or
loss has been made.
Provide information to
management.
Supply data and
information to the
government for taxes and
other requirements.
The Impact of New Businesses on a
Community


Provide jobs--Pays wages to its employees
who spend the money in the community—
the spending chain.
Pay taxes—support local government,
schools, and police services.
 Make purchases of goods in the community.
 Attract other businesses—when one
business settles into a community other
businesses often come to support it.