Before a business can be up and running there are five questions that must be answered before you can go forward:
Who will produce the goods and services?
Artists, farmers and dentists all provide different goods and services. The quality of these products and services depends upon the skills and abilities of the individuals involved. Workers must have a certain level of skill in order to carry out their work at the required level.
What goods and services are produced?
Geography often determines which goods and what services are needed. Florida farmers produce oranges and grapefruits because temperatures in Florida are warm enough to prevent the fruit from freezing. Companies along the Ottawa
River provide whitewater rafting because the river is lined with rapids that supports this activity.
How are goods and services produced?
Most automobiles are mass produced using assembly line techniques perfected by Henry Ford. Cars made by Porsche and Ferraris are hand built so the quality is much higher but so is the cost.
For whom are the goods and services produced?
Business must carefully study the wants and needs of potential customers before they make those products or provided services. Dog walkers, for example, must customize their services according to the needs of both pets and their owners. A dog walker might, in addition, offer related services such as grooming or house sitting based on the needs of customers.
How are the goods and services distributed?
Large companies such as Canadian Tire or Tim Horton
’s use large trucks to move their supplies and products to their outlet stores. However other companies use trains or ships to move their product but this option depends on where the goods are going and the proximity to stores and outlets.