Business: Formative 1

Annotations:

• ESTEFANIA PAZMIÑO  5 PAI C 

1. DEFINITION:
   1. Business is a decision - making organization involved in process of using inputs to produce goods or to provide services.
      1. Convine human, physical and financial resources to create goods and services in order to satisfy the needs and wants of people

         Annotations:

         • 4 NEEDS * Basic Needs * Social Needs  * Knowledge Needs * Develop ourselfs - autosuficients.  
2. PRODUCTION:
   1. FACTS OF PRODUCTION:
      1. Labour

         Annotations:

         • Manual and skilled labour.  Workforce of business.  - House cleaning services.
      2. Land

         Annotations:

         • Renewable and no-renewable resources:  - Oil- Solar Energy - Water - Wind - Limestone-  Phosphate 
      3. Capital

         Annotations:

         • Manual and skilled labour.  Workforce of business.  - House cleaning services.
      4. Enterprice /Entrepreneur

         Annotations:

         • Driving force of business.  Provided by risk-taken individuals.  Convine the other factors of production, into a unit that is capable of producting goods or services.
   2. PRODUCTION PROCESS:
      1. 2. Processes

         Annotations:

         • Turning the inputs into manufactured goods or into the provision of services. 
      2. 3. Outputs

         Annotations:

         • The output or provision of final good or service.  
      3. 1. Inputs

         Annotations:

         • Raw Material, component, machinery, equipment, and labour.
3. BUSINESS ORGANIZATION/ MAIN FUNCTION OF BUSINESS

   Annotations:

   • The main business functional areas must work together in order to achieve the organization goals 
   1. Human Resources

      Annotations:

      • Responsible for managing the personnel of the organization. 
   2. Finance and accounts

      Annotations:

      • Is in charge of managing the organization money. 
   3. Marketing

      Annotations:

      • Responsible for identifying and satisfying the needs and wants of costumers.  In charge of ensuring the firms product sells.  4 PS of marketing:  - Product  - Price - Promotion   - Place
   4. Operations

      Annotations:

      • Responsible for the process of converting raw materials into finished goods.
4. BUSINESS SECTORS
   1. Primary Sector

      Annotations:

      • -Extraction, harvesting, and corvesion of natural resources.  - LEDC's: Less economically developed countries.  (Mining, Fishing, Agriculture, Forestry, Mineral Extraction) 
   2. Secondary Sector

      Annotations:

      • Manufacturing or construction of products.  Economically developing countries tend to have a dominant secondary sector.  Value is added to the natural resource used during the production process. 
      • - Clothes  - Construction firms  - Electronic Manufacturers.  - Energy production companies.    
   3. Tertiary Sector

      Annotations:

      • Providing services to general population. Goods can be transformed in the process of providing a service.  Ej:  - Transportation and distribution.  - Leisure and Tourism  - Insurance  - Finance  - Health Care  - Banking 
   4. Quaternary Sector

      Annotations:

      • Subcategory of the Tertiary Sector.  Involves in intellectual, knowledge-based activities that generate and share information.
5. ENTREPRENEUR/ INTRAPRENEUR
   1. INTRAPRENEUR
      1. Employes of Organization
      2. Takes medium to high risks
      3. Failure is absorbed by the organization
      4. Rewarded with pay and remuneration
      5. Accountability to the owner/ operation
      6. Innovative
   2. ENTREPRENEUR
      1. Owner or operator of organization
      2. Take substancial risk
      3. Visionary
      4. Rewarded for profit
      5. Failure incurs personal cost
      6. Responsibility for workforce
6. REASONS FOR STRART A BUSINESS AND PROBLEMS THAT A NEW BUSINESS MAY FACE
   1. REASONS FOR STRART A BUSINESS
      1. Get Cash

         Annotations:

         • Remembered by the mnemonic 
      2. Earnings

         Annotations:

         • Potential returns from setting up your own business 
      3. Challenge

         Annotations:

         • Personal Satisfaction
      4. Transference and inheritance

         Annotations:

         • Pass businesses to the next generation. 
      5. Growth

         Annotations:

         • Capital growth 
      6. Autonomy

         Annotations:

         • Work for yourself, don’t follow the instructions and rules of others
   2. PROBLEMS THAT A NEW BUSINESS MAY FACE

      Annotations:

      • 20 to 25 per cent of new business fail in their first year.   
      1. Lack of finance

         Annotations:

         •  All business need finance.   
      2. Cash flow problems

         Annotations:

         •  Business might have a lot of stock, such as raw materials or semifinished output.
      3. People management problems

         Annotations:

         • New businesses may lack experience in hiring the right staff with all the necessary skills.   
      4. Unestablished customer base

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         • Businesses no attract customer. Marketing of rivals.
      5. Marketing problem

         Annotations:

         • Business fall to meet customer needs.     
      6. Legalities

         Annotations:

         • Business comply with all necessary legalization
7. STEPS IN THE PROCESS OF BUSINESS
   1. Write a business plan
   2. Obtain start-up capital
   3. Obtain business registration
   4. Open a business bank account
   5. Marketing
   6. Starting a new business