Understand the purpose and the functions of business Purpose and Functions of Business

Purpose of Business Businesses fulfill the needs and wants of consumers. Businesses fulfill the needs and wants of consumers. Consumers use goods and services Consumers use goods and services Customers purchase goods and services Customers purchase goods and services Businesses sell goods, services or both to consumers Businesses sell goods, services or both to consumers Goods—clothing, cars, computers, CDs Goods—clothing, cars, computers, CDs Services—hairdresser, dry cleaner, lawn care, babysitting Services—hairdresser, dry cleaner, lawn care, babysitting

Motivation to start a business Profit motive—desire to make money; see the opportunity to make money in the marketplace. Profit motive—desire to make money; see the opportunity to make money in the marketplace. Opportunity to meet wants and needs of consumers Opportunity to meet wants and needs of consumers Opportunity to increase competition in the marketplace Opportunity to increase competition in the marketplace Businesses are investment opportunities for individuals—future income Businesses are investment opportunities for individuals—future income

Functions of Business Accounting—recording and reporting financial activity and transactions Accounting—recording and reporting financial activity and transactions Examples Examples Paying bills Paying bills Collecting money from customers Collecting money from customers Paying taxes Paying taxes Preparing employee payroll checks Preparing employee payroll checks Reconciling bank statements Reconciling bank statements Investing cash Investing cash Purchasing inventory Purchasing inventory

Functions of Business Management Management Makes sure that the entire organization meets its goals and obligations Makes sure that the entire organization meets its goals and obligations Effectively works with people in the organization Effectively works with people in the organization Uses available resources to accomplish the organizations’ goals Uses available resources to accomplish the organizations’ goals

Functions of Business Marketing Marketing Satisfies the needs and wants of consumers through exchange Satisfies the needs and wants of consumers through exchange Based on four “P’s” Based on four “P’s” Product Product Price (establishing the price of the product) Price (establishing the price of the product) Placement (placing the product in attractive and convenient sales locations) Placement (placing the product in attractive and convenient sales locations) Promotion (advertising) Promotion (advertising)

Functions of Business Information Technology Information Technology Uses technology to share knowledge, facts, and data to others (co-workers, customers, and suppliers) Uses technology to share knowledge, facts, and data to others (co-workers, customers, and suppliers) Examples Examples Maintains accounts Maintains accounts Maintains software applications Maintains software applications Maintains processing systems Maintains processing systems Maintains hardware for all technology used Maintains hardware for all technology used

Functions of Business Operations Operations Considered the “back office” Considered the “back office” Involves behind the scenes paperwork required to complete all transactions Involves behind the scenes paperwork required to complete all transactions Found in both the service and the manufacturing sector Found in both the service and the manufacturing sector

Functions of Business Human Resources Human Resources Manages “people” relations within the company Manages “people” relations within the company Helps workers develop the skills and knowledge needed to be successful on the job Helps workers develop the skills and knowledge needed to be successful on the job Responsible for hiring and firing of employees Responsible for hiring and firing of employees Selects employee benefits and enrolls all employees in the benefits (insurance, retirement, etc.) Selects employee benefits and enrolls all employees in the benefits (insurance, retirement, etc.) Helps employees pursue educational opportunities Helps employees pursue educational opportunities