Introduc*on

to Business

Marking
60% of the mark

Final Exam

40% of the mark

Case studies prepare them at home

in groups of 3 before the lesson
You will be asked to present your case
study ndings
Class par*cipa*on also taken into
account

Introduc*on to Business
1. Types of businesses and business ac*vi*es
2. Growth and Strategic Planning
3. Analyzing the compe**ve market and
business analysis
4. Developing a strategy and compe**on in
markets
5. Distribu*on
6. Finance and accounts



WHAT IS A BUSINESS AND WHAT IT DOES?

What is a business?
A BUSINESS is the organized eort of individuals
to produce and sell, for a prot, the goods and
services that sa*sfy societys needs.

What business do?

Meet the needs of stakeholders
Buy inputs (raw materials, machinery, land)
Produce outputs (goods and services)
Focus on ecient use of resources
Generate prots/surplus (non-for prot)

What business do?

Who are stakeholders:
Anyone who has an interest or concern in the
organisa6on:
- Customers - Local community
- Government - Suppliers
- Owners - Creditors
- Employees

What business do?

Take Inputs

Process/Manufacture

Output

Revenue

Costs Fixed and Variable

Profit

Business objec*ves
Businesses exist to provide goods or services
to its customers
Whether they have to make prot or not
they have to sa*sfy the needs and wants of its
customers

Why set up a business?

There can be many dierent mo*va*ons for
people to set up a business:
- Fed up with working for someone else
- Quality of life
- Buzz of success
- Feel in control
- Financial reward
- I could do beker than that

Why set up a business?

Advantages:
Ease of Start-up and Closure
Pride of ownership
Reten*on of all prots
Flexibility you are your own boss

Why set up a business?

Dissadvantages:
Unlimited liability
Lack of investment money
High risk of going under (sta*s*cally)

Types of businesses
Private Sector: Business ac*vity owned nanced
and controlled by private individuals
Sole Ownership
Partnerships
Private Limited Companies
Public Limited Companies (PLCs)
Co-opera*ves
Franchises
Chari*es

Types of businesses
Sole Proprietorship/Ownership:
You are the only owner of the company
Unlimited liablity
Partnerships:
General Partners at leat two partners sharing unlimited
liability for the all debts

Limited Partners General Partner(s) + Limited
Partner(s);

- Limited Parner(s) invests money
- no managerial responsibility

- liability for losses - only his investment

Types of businesses
Public Limited- Liability Companies:
Ownership stockholders
Shares available at the stock market
Private Limited-Liability Companies:
Shares available privately
Management Flexibility
Tax Benets

Types of businesses
Co-opera*ves:
Associa*on of individuals or rms whose
purpose is to perform some business func*on
for its members.
Franchize:
A privilege license granted to produce or sell a
good or service under a patented process or
trademarked name.

Types of businesses
Joint Ventures
Agreement between two or more businesses
crea*ng a separate business en*ty to achieve a
specic goal.
Non-prot organisa6ons
Organized to provide a social, educa*onal,
religious, or other service not to earn a prot -
chari*es, museums, private schools and
universi*es,
Ensures limited liability.

Objec*ves of Private Sector Business

Satisfaction

Profit
Survival

Environment
Image and
Reputation

Share Price
Objectives
Social Issues

Quality and
Innovation
Efficiency

Sales and Sales

Revenue

Market Power

The Public Sector

Public Sector: Business Ac*vity owned, nanced
and controlled by the state through government
or local authori*es
Government key departments set policy and monitor
implementa*on
Local Authori*es County Councils,
District Councils, Parish Councils
Health Trusts
Public Corpora*ons BBC

The Public Sector

Objec6ves of Public Sector Ac6vity
Access
available to all regardless of loca*on or income
Quality
high quality services that do not cut corners
Aordability
services oered at prices that are cheaper than private
sector or free at the point of use
Equity
available to anyone whatever their background, status,
income, class, race, religion, etc

Range of Business Oered by the Public Sector

Roads

Allotments

Museums and Arts

Paths and Parks

Environmental Health

Cemeteries

Planning

Street Ligh*ng

Licensing

Care of the Elderly

Social Services

Waste Disposal

Schools

Economic Development
and Tourism

Trading Standatds

Business Ac6vity
Business ac*vity can be conveniently divided
into 4 sectors:
Primary sector
Extrac*on of raw materials from earth mining,
quarrying, shing, agriculture, forrestry
Secondary sector
Manufacturing processing raw materials into
nished or semi-nished products

Business Ac6vity
Ter*ary sector
Service industries leasure, transport, nance,
distribu*on, retailing, wholesaling,
communica*ons
Quarternary sector
Research and Hi-tech indus*res, training,
educa*on, health

Business Ac6vity
Mul*ple Business Ac*vity
e.g. BP involved in:
Oil explora*on and drilling (Primary)
Rening oil produc*on of gas, petroleum,
bitumen, lubricants, etc. (Manufacturing)
Distribu*on of petrol from reneries to petrol
sta*ons and sales of petrol to consumer (Ter*ary)
Research and Development (Quarternary)