1. Business Characteristics

2. Main Menu Types of Businesses Human Resources & Management
Finance & Accounting
Marketing, Production & Distribution

3. Types of Businesses

4. Types of Businesses Are classified by the work activities performed
Include:
producers
processors
manufacturers
intermediaries
service firms
non-profit organizations

5. Producers Develop products for distribution from raw goods
raw goods – materials derived from natural resources
Examples include:
farming
forestry
mining

6. Processors Change raw goods into a more finished form
Produce processed goods
Examples include:
cotton mills
oil refineries
textile mills
food processors

7. Manufacturers Change raw or processed goods into finished goods
Examples include:
juice factories
clothing factories
automobile factories

8. Intermediaries Are referred to as the middleman
Move finished goods from one business to another
Buy, store and resell goods
Examples include:
wholesalers
buy finished goods from manufacturers in large quantities and sell them to businesses in smaller quantities
retailers
buy finished goods from manufacturers or wholesalers and sell them directly to the consumer

9. Service Firms Provide services to consumers and other businesses
Examples include:
beauty salons
landscaping companies
plumbing companies

10. Non-profit Organizations
Provide goods and services to businesses and individuals
Operate on donations, volunteers and philanthropists rather than income/profit
Examples include:
Salvation Army
United Way of America
American Red Cross
YMCA and YWCA

11. Business Departments Human Resources Management Finance and Accounting
Marketing
Production and Distribution

12. Human Resources & Management

13. Human Resources Human Resources
Requires following laws and proper procedures
Requires people with strong human relation and communication skills
Responsibilities include:
maintaining the employment process
training and developing staff
Human Resources

14. Human Resources Employment Process Is carried out by human resources
Goal:
to obtain qualified employees who are well-matched to the open position
Steps:
assess employment needs
recruit potential employees
select employee who fulfills goals
help employee get oriented
Human Resources

15. Human Resources Employment Process Step one: assess employment needs
determine what openings in the company need to be filled
analyze what the open position involves
obtain or write job description, including:
qualifications
duties
responsibilities
Human Resources

16. Human Resources Employment Process
Step two: recruit potential employees
look within the company first
contact and utilize the following:
newspaper and/or Internet advertising
colleges, universities, and technical or vocational schools
applications on file
employment agencies and/or labor and professional organizations
Human Resources

17. Human Resources Employment Process
Step three: select employee who fulfills goals
review applications, resumes and cover letters of applicants
choose applicants appearing to best match company opening and conduct interviews
if there is not an appropriate applicant, start again at recruiting potential employees
review all obtained information and select best applicant
Human Resources

18. Human Resources Employment Process
Step four: help employee get oriented
introduce to coworkers
help fill out new employee paperwork
answer questions about company pay, benefits, policies, etc.
assist during adjustment phase
Human Resources

19. Human Resources Training & Developing
Is also performed by human resources
Goal:
maintain well-trained, qualified employees
Is accomplished through:
training
evaluating performance
focusing on motivation and cooperation
Human Resources

20. Human Resources Training Can be done individually or in groups
Includes the following techniques:
on-the-job training
companies train employees while they work
employees have hands-on practice with supervision
occurs typically on an individual basis
group training
companies teach new skills to several employees at once
employees listen and learn from each other
employees get the opportunity to express ideas and share experiences
Human Resources

21. Evaluating Performance
Is often achieved through performance appraisals
managers evaluate employee performance
managers provide feedback to employees
Helps when making decisions, including:
transfers
layoffs
promotions
terminations
Human Resources

22. Focusing on Motivation
Can help meet employees needs
Includes two types:
extrinsic – motivation through outside sources
for example: money, benefits, recognition
intrinsic – motivation occurring internally
for example: challenge, enjoyment, accomplishment
Human Resources
What motivates you to do well in school or hobbies? Are they extrinsic or intrinsic motivators?

23. Human Resources Motivation
Can be ensured by meeting employees’ needs, including:
hierarchy of needs proposed by Abraham Maslow:
Self-Actualization – realizing full potential
Self-Esteem – feeling skilled, useful, etc.
Human Resources
Belonging & Love – feeling accepted, loved, etc.
Safety – physical & emotional
Basic Needs – food, shelter, etc.

24. Focusing on Cooperation
Improves the output produced by working together in groups
Is needed to ensure high work quality and employee job satisfaction
Requires effective communication in order to:
enhance group dynamics
ensure employees know and understand their roles
encourage employees to contribute ideas
Human Resources

25. Management Management
Is the process of reaching a company’s goals and objectives by utilizing its resources
Has these four main functions:
planning
organizing
directing
controlling
Management

26. Management Planning Is management’s first main function
Means determining a direction for the company
Includes the following:
setting long- and short-term goals
determining strategies to utilize company resources
creating a written plan
Management

27. Management Organizing Is management’s second main function
Means obtaining and coordinating resources to meet company goals and objectives
Includes the following:
creating structure
dividing up the workload
arranging resources
coordinating activities
Management

28. Management Directing Is the third main function of management
Is leading employees to carry out their assigned tasks
Includes the following:
staffing
motivating
influencing
guiding
Management

29. Management Controlling Is management’s fourth main function
Is ensuring results meet expected goals and objectives
Includes the following:
evaluating employee performance
solving problems
setting standards for desired performance
Management

30. Management Management
Is most effective when all four functions play an important role
Is responsible for making sure the company runs smoothly
Must remember to evaluate progress regularly and provide feedback to the appropriate personnel
Management

31. Finance & Accounting

32. Finance & Accounting Finance & Accounting
VITAL - a business cannot exist without cash flow
What is cash flow?
Focus on the following:
Maintain proper records
making a plan to create profits
managing and utilizing company resources
What are company resourse?
Finance & Accounting

33. Finance & Accounting Accounting
Is a system used to record, classify, summarize and report the financial position of a business
Responsibilities include:
recording financial transactions
creating financial statements
Finance & Accounting

34. Accounting The Accounting Equation
Assets = Liabilities + Owner’s Equity

35. Accounting: Financial Transactions
financial entries affecting the financial position of a business
Include these classifications:
assets – items of value owned by a business
examples include: cash, land, buildings, equipment
liabilities – debts or obligations of a business
examples include: credit, mortgage payments
owner’s equity – amount of capital invested by owners
total value of assets minus liabilities
Finance & Accounting

36. Finance & Accounting Financial Statements
reporting process of accounting
used to make financial decisions
Include:
balance sheet – totals in asset, liability and owner’s equity accounts
Statement of Change in Owner’s Equity – how owner’s equity has changed over the course of the accounting period
income statement – reports net income or net loss of a company
net income – when revenue is greater than expenses
net loss – when expenses are greater than revenue
Finance & Accounting

37. Financial Statements – Balance Sheet Example
Kay’s Kloth Shop
Balance sheet
Assets
Cash in bank $4,000.00
Cloth $8,000.00
Supplies $2,000.00
Total assets $14,000.00
Liabilities
Accounts payable $ 4,000.00
Owner’s Equity
Capital from Kay $10,000.00
Total liabilities
and owner’s equity $14,000.00
Finance & Accounting

38. Financial Statements – Income Statement Example
Kay’s Kloth Shop
Income Statement
Revenue:
Cloth Sales $6,000.00
Expenses:
Advertising $100.00
Utilities $300.00
Rent $600.00
Payroll $3,000.00
Total expenses $4,000.00
Net Income: $2,000.00
Finance & Accounting

39. Financial Statements – Income Statement Example
Finance & Accounting

40. Financial Statements – Statement of Change in Owner’s Equity Example
Finance & Accounting

41. Financial Statements – Balance Sheet Example
Finance & Accounting

42. Finance & Accounting Finance Goal:
determine use of company resources and funds
Responsibilities include the following:
managing use of company funds
obtained needed funds
creating a financial plan
Finance & Accounting

43. Finance & Accounting Finance Funds are used to do the following:
buy resources used to create goods and services
pay expenses required for operation
When available, excess funds can be used in many ways including:
purchasing assets to help the company grow
paying unexpected or high expenses
investing to obtain profit
Finance & Accounting

44. Finance & Accounting Finance Sources of funding include:
borrowing funds
selling stock
looking for new investors
increasing owner contributions
The financial plan does the following:
specifies what funds are needed
documents period funds are needed
is crucial to the success of a business
Finance & Accounting

45. Marketing, Production & Distribution

46. Marketing Marketing Goal:
create products meeting consumer wants and needs
How? Marketing Mix
to understand consumers through marketing research
EX: What do Senior Citizens want?
What do they need?
What do children want?
Marketing

47. Marketing Target Market
Market – an area of trade for a specific type of product or business or a group of consumers
What do you think a target market is?
Marketing

48. Marketing The Marketing Mix four interrelated marketing strategies
1. Product
– good or service that meets customers wants and needs
–conducting studies and surveys
2. Price
–low enough to attract consumers
–high enough to cover costs and create profit
3. Promotion
–Inform, pursued, remind consumers they need the product
– Ex:?
Place
– is a location where products and/or services are sold
– includes stores and location within a store
5. Target Market – already went over
Marketing

49. Understanding Consumers
understanding the needs they attempt to meet when making purchases, including:
physical
safety, security and health
EX: food, clothing, transportation, etc.
social
to feel loved and accepted
EX: fancy clothing, make-up, cologne, etc.
psychological
for prestige and approval
luxury items, make the consumer feel important
Marketing

50. Marketing Marketing Mix Example Product: Average Surfboard
Price: around $300
Place:
Promotion
Target Market
Marketing

51. Production & Distribution
Goal:
to produce and distribute goods and services in the most efficient and cost-effective manner
Consists of three roles:
facilities – physical elements needed for production
• need a good layout and location
processing – changing or combining resources to create a product or service
• adds value by transforming resources into products
people – invaluable human resource
• plan, operate and supervise the process
Production & Distribution

52. Production Must be effective and efficient by doing the following:
forecasting demand
scheduling production of goods and services
managing inventory
controlling quality

53. Distribution
Is getting produced goods and services to consumers in a timely manner
Is typically from producers to wholesalers and retailers
Uses the following four modes of transportation:
waterways
railroads
trucks
airlines