1. Types & Functions of Businesses-6.2
Chapter 6
Types & Functions of Businesses-6.2

2. Types of Businesses -Crude oil into gasoline -Iron ore into steel
Producers gather raw goods in original state from natural resources.
Agriculture, mining, fishing, forestry
2. Processors change raw materials into more finished products.
Require further processing—
-Sugar cane into sugar
-Crude oil into gasoline
-Iron ore into steel

3. Types of Businesses-cont’d
3. Intermediaries & Wholesalers
a. Intermediary moves goods from one business to another.
b. Buys, stores, then resells goods.
Wholesalers distribute goods.
Also known as distributors.
Clothing wholesaler—buys thousands of jackets from several manufacturers, then
Divides them into smaller quantities & sells them to retailers.

4. Retailers & Service Businesses
4. Retailer purchases from wholesaler & sells to consumers.
Examples: service stations, auto dealers
Service businesses employ ¾ of workforce
Perform tasks—medical clinics, law firms
Provide conveniences—taxi companies, cleaning services

5. Functions of Businesses
1. Production & procurement
Production is the process of creating, expanding, manufacturing or improving goods/services.
Procurement is the buying & reselling of goods that have already been produced.
Wholesalers buy goods from producers to resell to retailers & other wholesalers.

6. Functions – cont’d
2. Marketing – process of planning, pricing, promoting, selling & distributing ideas, goods & services.
Involves getting consumer to buy product or service.
Marketers make decisions based on market research of trends & consumer habits.

7. Functions – cont’d
3. Management is process of achieving company goals by:
planning,
organizing,
leading,
controlling & evaluating effective use of resources.

8. 4. Finance/Accounting
Finance – manage money & analyze financial statements to make future decisions.
Accounting – maintaining & checking records, handling bills & preparing financial reports for a business.

9. The functional areas of business depend on each other.
Companies benefit when all functional areas work together.