What is Business?

Business A business is an organization that produces or sells goods or services to satisfy the needs, wants, and demands of consumers for the purpose of making a profit Business also can be described by its type of ownership, the goods produced or services offered, the types of jobs provided, or the functions it performs in a community

Entrepreneurs People who take calculates risks and start a business to solve a problem or take an advantage of an opportunity are called entrepreneurs Recognize that unsatisfied needs and wants of consumers is an opportunity for a business opportunity People need businesses for employment opportunities; businesses need people to shop with the money they make from employment

Needs Needs would be defined as goods or services that are required. This would include the needs for food, clothing, shelter, health care.

Wants Wants are goods or services that are not necessary for survival yet we desire or wish to own or take advantage of them. For example, a people need clothes but may not need designer clothes. People do not need toys, entertainment, or cars. People need food but do not have to have steak or dessert.

Wants An important part of the economics is the distribution of resources or goods so that people's needs are met. This is especially true in times of scarcity when there are not enough resources, goods or services. Many times advertisers try to appeal to consumers in such a way that the consumers feel they need certain goods or services when in fact they only want them.

Goods Most goods have a monetary value (dollars and cents) Value of goods change over time All goods are tangible, meaning these goods are produce and can be seen and touched

Services Services also have a monetary value because people are willing to pay for them Example: Round of Golf, Dentist visit Services are intangible because they do not result in a product you can touch Services can be free such as the work performed by volunteers from not-for-profit organizations

Essential and Luxery Goods and Services Essential goods (food, clothing, shelter) and essential services (heat, water, and electricity) are needed for survival Luxury goods (swimming pools, home entertainment centres) and luxury services (limo service, spa visit) are not necessary for survival

Maslow’s Hierarchy of Needs

Maslow’s Hierarchy of Needs The basis of Maslow's theory is that human beings are motivated by unsatisfied needs. Certain lower needs must be satisfied before higher needs can be satisfied. As long as we are motivated to satisfy these cravings, we are moving towards growth, toward self-actualization.

Maslow’s Hierarchy of Needs Physiological Needs Needs required to sustain life, such as: Air Water Food Sleep

Maslow’s Hierarchy of Needs According to Maslow's theory, if these fundamental needs are not satisfied then one will surely be motivated to satisfy them. Higher needs such as social needs and esteem are not recognized until one satisfies the needs basic to existence.

Maslow’s Hierarchy of Needs Safety Needs Once physiological needs are met, one's attention turns to safety and security in order to be free from the threat of physical and emotional harm. Such needs might be fulfilled by: Living in a safe area Medical insurance Job security Financial reserves If a person feels threatened, needs further up the pyramid will not receive attention until that need has been resolved.

Maslow’s Hierarchy of Needs Social Needs Once a person has met the lower level physiological and safety needs, higher level needs awaken. The first level of higher level needs are social needs. Social needs are those related to interaction with others and may include: Friendship Belonging to a group Giving and receiving love

Maslow’s Hierarchy of Needs Esteem Needs Once a person feels a sense of "belonging", the need to feel important arises. Esteem needs may be classified as internal or external. Internal esteem needs are those related to self-esteem such as self respect and achievement.

Maslow’s Hierarchy of Needs Esteem Needs External esteem needs are those such as social status and recognition. Some esteem needs are: Self-respect Achievement Attention Recognition Reputation

Maslow’s Hierarchy of Needs Esteem Needs Maslow later refined his model to include a level between esteem needs and self-actualization: the need for knowledge and aesthetics

Maslow’s Hierarchy of Needs Self-Actualization Needs Self-actualization is the summit of Maslow's hierarchy of needs. It is the quest of reaching one's full potential as a person. Unlike lower level needs, this need is never fully satisfied; as one grows psychologically there are always new opportunities to continue to grow.

Maslow’s Hierarchy of Needs Self-Actualization Needs Self-actualized people tend to have needs such as: Truth Justice Wisdom Meaning

Maslow’s Hierarchy of Needs Self-Actualization Needs Self-actualized persons have frequent occurrences of peak experiences, which are energized moments of profound happiness and harmony. According to Maslow, only a small percentage of the population reaches the level of self-actualization.

Economic Resources Products and services don’t just appear Goods must be manufactured from basic components; services require skills and effort Economic resources (factors of production) are the means which goods and services are made available to consumers

Economic Resources Natural resources are those raw materials that come from the earth, water, and air such as oil, fish, and agricultural products Natural resources are renewable and non-renewable Human resources (also referred to as labour) are the people who work to create goods and services (farmers, factory workers, teachers, web designers) Capital resources include money, buildings, equipment, tools, trucks, and factories and usually last for a long period of time and often require a substantial investment on the part of the business.

Producers and Consumers Producers are those that manufacture the product, while those that repair computers provide a service. Consumers are the people who buy products and services. The more people that can be found to buy products equals greater profits for companies People can be both producers and consumers of the same product