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Business Basics

Better Business1st EditionPoatsy Martin

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Slide presentation prepared by Pam JansonStark State College of Technology

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All rights reserved. No part of this publication may bereproduced, stored in a retrieval system, or transmitted, inany form or by any means, electronic, mechanical,photocopying, recording, or otherwise, without the priorwritten permission of the publisher. Printed in the UnitedStates of America.

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Learning Objectives1. What are profits , and how do businesses and non-

profit organizations compare?2. What is the difference between a good and a service ,

and what are the factors of production ?

3. How do competition , the social environment ,globalization , and technological growth challenge andprovide opportunities to business owners?

4. What are four types of businesses?5. How do sole proprietorships , partnerships ,

corporations , and limited liability companies (LLCs)differ from one another as forms of business?

6. How do life skills translate to the business environment?

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Basic Business Definitions Businesses: sell goods

and services to earnprofit

Profit Nonprofit

organizations Good Service

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Benefits of Businesses The proprietor benefits from earned profits. Society benefits from goods and services

provided. Communities benefit from the employment

opportunities. Businesses contribute to the quality of life

by creating higher standards of living forsociety.

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The Factors of Production Labor Natural resources

Capital Entrepreneurs Technology

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How Does CompetitionInfluence Business?

Competition forces companies too Improve their product offerings.o Lower their prices.o Promote their brands.o Focus on customer satisfaction.o Seek workers with interpersonal,

communication, and decision-makingskills.

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How Does the SocialEnvironment Affect Businesses? An aging population Increasing diversity The Green

Movemento Environmental

concernso New product

opportunities

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Globalization Multinational enterprises Offshoring Benefits to the U.S. economy

o Lower prices for goodso Increased competition stimulates innovation

Risks to the U.S. economyo U.S. jobs lost to overseas workerso Increased competition

o Fluctuation in the dollar valueo Security and patent protection concernso Unstable political climates in foreign countries

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Technological Changes Technology is expensive and time-consuming. Benefits include lower costs and improved

productivity, security, and communications.

Telecommuting, teleconferencing and othertools help human relations and globalization.

The Internet aids company operations.o E-commerce (B2B and B2C) streamline sales.o Businesses must provide online security and

privacy.

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Types of Businesses:Local and Regional

Managing money is the mostsignificant special challenge of thesebusinesseso Poor financial

planningo Undercapitalization

o Taxes andinsurance costs

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Types of Businesses:National

A national business has several outletsthroughout the country

Special challengeso Financeso Laws that vary from state to stateo Supply chain management

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Types of Businesses:Multinational

Special challengeso Different countries lawso Cultural differenceso Economic differences

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Types of Business Ownership

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The Players inBusiness Ownership

Corporate stakeholders includeemployees, shareholders, investors,suppliers, and society at large

Sole proprietorships usually havefewer stakeholders than largecorporations

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Taking Business Personally Are you a sole proprietorship or a partnership? How do you receive funding? What are your expenses? How does the social environment affect your

life? How does globalization affect your life? How do you keep up with new technology? What sort of e-commerce do you use?

How do you keep your business secure What types of goals do you have?

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Chapter Summary1. What are profits , and how do businesses and non-

profit organizations compare?2. What is the difference between a good and a service ,

and what are the factors of production ?

3. How do competition , the social environment ,globalization , and technological growth challenge andprovide opportunities to business owners?

4. What are four types of businesses?5. How do sole proprietorships , partnerships ,

corporations , and limited liability companies (LLCs)differ from one another as forms of business?

6. How do life skills translate to the business environment?

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