Into. to Business (MKTG 101)1

 Introduction to Business  Business Definition  Types of Business  Business Objectives  Preparing Business Plans  Elements of Business Plan  Implementing Business Plan  Evaluation of Business Plan  Business Management & Styles of Management  Management  Leadership  Controlling  Business Organisation & Administration  Organisational Structures  Functions & Roles  Coordination of Organisational Roles  Business Operations  Design of Operation  Supply Chain Management  Cost Effectiveness of Operation  Business Finance  Understanding Capital & Its Sources  Business Liabilities  Business Assets  Basics of Capital Budgeting Into. to Business (MKTG 101)2

 Business Marketing  Understanding Marketing Functions  Selling & Distribution  Strategic Marketing  Business Accounting & Performance Measurement  Basic Concept of Accounting  Understanding Balance Sheet  Understanding Profit & Loss Accounts  Assessing Business Performance Trough Ratios & Scorecard.  Business Environment  Understanding Business Environment  Environmental Impact on Business  Analysing Business Environment  Business Risks  Types of Risks  Managing Risks  Business Rewards  Types of Rewards; Monitory & Non-Monitory  Distribution of Rewards  Business Globalisation  Reasons for Globalisation  Strategies for Globalisation  Roles for International Business Into. to Business (MKTG 101)3

 Introduction to Business  Business Definition  Types of Business  Business Objectives  Preparing Business Plans  Elements of Business Plan  Implementing Business Plan  Evaluation of Business Plan  Business Management & Styles of Management  Management  Leadership  Controlling  Business Organisation & Administration  Organisational Structures  Functions & Roles  Coordination of Organisational Roles  Business Operations  Design of Operation  Supply Chain Management  Cost Effectiveness of Operation  Business Finance  Understanding Capital & Its Sources  Business Liabilities  Business Assets  Basics of Capital Budgeting Into. to Business (MKTG 101)4

‘’ Business refers to group or individual activities with predetermined objectives of creating wealth through exchange of goods and services’’. A business also known as: ‘’company, enterprise, or firm’’ is a legally recognized entity designed to provide goods, services, or both to consumers or other businesses in exchange for money. Into. to Business (MKTG 101)5

A typical businesses is an economic activity which is mostly privately owned and formed for earning profit that will increase the wealth of its owners. The owners and operators (management) of private, for-profit businesses have as one of their main objectives i.e. generating return in exchange for work and acceptance of risk. Businesses can also be formed not-for-profit or be state-owned Into. to Business (MKTG 101)6

 There are four forms of Business 1. Sole proprietorship: Business owned by individual. Easy to form, less regulatory requirement except planning permission in certain cases to ensure that business does not have undesirable impact on its surroundings. Less capital required. 2. Partnership: Two or more individuals form partnership. Easy to form. Partners can agree on the amount of investment, profit sharing and management of business. Legal document such as partnership deed is preferable to avoid any conflict between partners. Into. to Business (MKTG 101)7

1. Private Limited Company: Its is a legal entity which is registered with governing body of the country such as Company House. The company has registered name with Ltd at the end of its name. There are legal requirements such as appointing Director(s), declare amount of capital, have a registered office and file annual return and business accounts with the regulatory body. The advantage is that Its liabilities are limited to the level of company assets. 2. Public Limited Company: This is a large business with huge capital owned by general public. There are strict regulation to be followed and its annual accounts need auditing by independent firm of accountants. It normally has plc at the end of its name. Into. to Business (MKTG 101)8

 Generally there are two types of business  Small Businesses  Large Businesses Into. to Business (MKTG 101)9

 Small Businesses: could be a sole proprietorship, partnership or private limited company. Small business is usually owned by owner manager. Main factor defining size of small business are: 1.Small percentage of market share. 2.They are managed by owner or partners without any formal organization and management structure. 3. They are independent and do not form a part of any large enterprise. 4.They have small capital not exceeding 10 million SR 5.They are owned by individuals or families 6.Quick decision-making Into. to Business (MKTG 101)10

 Large Businesses: Large business is normally Private Limited Company or Public Limited Company with Capital exceeding 10 Million SR. Main factors of large business are: 1.Large percentage of market share. 2.Run by professional management 3.Formal organization and management structure with large number of employees 4.Operating over large geographical territory and could multinational 5.Formal decision-making which could be slow and time consuming. Into. to Business (MKTG 101)11

 Business have two main objectives:  Economic Objectives  Social Objectives Into. to Business (MKTG 101)12

 Economic Objectives: I.Return on Investment (ROI). This refers to generating wealth for owners of business in the form of profit or dividends. II.Expanding business through diversification, merger and acquisition. III.Innovation and development for example creating new product or improving existing product. IV.Seeking strong market position and high profitability. Into. to Business (MKTG 101)13

 Social Objectives: I.Creation of employment. II.Environmental change and development. III.Development of infrastructure. IV.Development of small scale and ancillary/additional industry. Into. to Business (MKTG 101)14

 Two major business concerns are important to be aware of and take necessary precautions to handle them 1.Business Risk. 2.Impact on society. Into. to Business (MKTG 101)15

1. Business Risk: ◦ Business Risk: It is the Probability of loss inherent in a firm’s operations and environment ( such as competition and adverse economic conditions) that may impair its ability to provide returns on investment. ◦ Every business involves risk of loss due to: 1.Change of Technology. 2.Change in Consumer preferences and fashion. 3.Competition and new or alternate product development. 4.Change in Government policies. Into. to Business (MKTG 101)16

2. The Impact on Society: Every business influences society and gets influenced by the society some time called environmental impact. If business turns out to be successful it generates employment for the locality in which it operates and raises living standard of the community. It helps developing infrastructure i.e. road network, additional business, transport facilities and civic amenities like water supply, hospital and educational institutions etc. Into. to Business (MKTG 101)17

 Every business needs careful consideration and planning before it is started. Following factor are essential to be taken into account while starting business. Into. to Business (MKTG 101)18

1. Must have clear and well defined objectives that can be attained. 2. Should be based on proper planning such as financial feasibility using reliable and up-to-date information. 3. Must have proper organization structure with clear distribution of duties and responsibilities to ensure control and increased profit. 4. Competent management to respond to changing environment such as change in technology, change in fashion, change in government policies and impact of globalization 5. Customer focused marketing system such as sale and after sale service, distribution and promotion, quality assurance. 6. Good human resource policies to recruit appropriate staff, to retain staff, to train and develop staff. Into. to Business (MKTG 101)19

 There are several business activities to achieve business objectives however the following two are main activities which are vital to ensure business moves in the right direction. 1.Managing Business. 2.Administrating Business. Into. to Business (MKTG 101)20

 Managing Business 1.Managing means getting things done through people in organized setting. 2.Managing is an art or skill where managers need to influence staff to attain business objectives. 3.Management is a process that involves planning, organizing, coordinating, leading, motivating and controlling.  Administering Business It refers to implementation of policy decisions and running day-to-day operations of organization Into. to Business (MKTG 101)21

 Difference between management and administration 1.Management deals with policy formulation and strategic planning. 2.Administration deals with coordination, production and distribution through complex structure. 3.Management deals with overall planning on long term basis. 4.Administration is part of management dealing with installing and implementing policies. Into. to Business (MKTG 101)22

 Students are asked to think of a business of their own interest and develop business model showing what are the input, process, output and likely rewards to be achieved in the form of a business model. Into. to Business (MKTG 101)23