Business FundamentalsIntroduction to Types of Business

What is a Business?

A business is an organization that produces and/or sells goods and/or

services to satisfy the needs, wants, and demands of consumers.

How to Classify Businesses

There are many ways to classify businesses.

For-Profit OR Not-for Profit Size Form of Ownership Goods or Services Distribution Method Role in the Community and Jobs

1. For-Profit OR Non-Profit

A For-profit Business

An organization that produces or sells goods or services to satisfy the needs, wants, and demands of consumers for the purposes of making a profit

For-Profit Business

Definitions: Profit: money left after all expenses have been

paid Expenses: money spent on running the business

(wages, supplies, etc.) Costs: money spent for the production of the

good or service

Businesses try to keep profits up by keeping costs and expenses down.

Profit = Revenue – Expenses

Non-Profit and Not-For-Profit

NP: does not look to make profit, but raises funds for a specific goal (charities, charitable organizations)

Examples: Salvation Army, UNICEF

NFP: does not seek to make profit, extra monies used to improve services

Examples: Victoria Cool Aid Society, Victoria Hospice

2. Size of Business

Small Medium Large

3. Type of Ownership Single Proprietorship (single owner)

Owned by one person Partnership

Two or more people Corporation

Owned by investors called shareholders Cooperative

Owned by members Franchise

Franchisee buys a franchise from a large corporation or franchisor.

4. Goods or Services Goods: items of monetary value that have been produced.

eg. Television, Paint Goods are TANGIBLE (can touch them)

Services: Tasks performed by businesses for consumers. eg. Lawn Mowing, Delivery Services are INTANGIBLE (can’t touch them)

Businesses can sell both goods and services

Goods or Services?

Businesses that sell goods Businesses that provide services

Businesses that do both.

5. Distribution

How are goods & services delivered? Bricks and mortar business telemarketing catalogue online.

Examples?

6. Role in the Community and Jobs

What role does the business play in the community?

What types of jobs does the business offer/employ?

Assignment

Go to Blackboard and download the Notes Document Complete Part A and B