INTRODUCTION TO BUSINESS
OBJECTIVE
Be able to define the term “Business”
An activity that satisfies economic needs by planning, organizing, & controlling resources to
produce & market goods & services
Activity: For the businesses listed below, explain how each meets the definition of business:
McDonald’s
AOL
Nichols Hardware
Nike
Food Lion
(Your Choice)
ASSIGNMENT
Read Chapter 5
Do two of the “Critical Thinking questions
Do workbook pages 25, 26, 28, (#1 only on page 28)
OBJECTIVE
Be able to describe the three functions of business
Production - Creating, growing, manufacturing, or improving products
Marketing - Activities that move goods/services from producers to consumers
Management - Achieving company goals by directing its resources (Make $ or else!!!)
OBJECTIVE
Be able to describe the “social responsibilities” of a business:
- Social Responsibility is what a business “should” do in the eyes of the majority of the
population
- Ethics are guidelines for “good” or acceptable behavior in the eyes of the majority of the
population
Areas of Social Responsibility
 Consumption of Natural Resources
 Use of resources & recycling efforts
 Environmental Issues
 Damage to & protection of the environment
 Worker Issues
 Treatment (handicapped, health-care, etc.)
 Pay (amounts, docking, profit-sharing, telecommuting, etc.)
 Consumerism - “Using legal, moral, & economic pressure on business protect the
consumer’s rights ”
 To be protected against fraud, deceit, & misleading statements & to be educated in wise
financial decisions
 To be protected from unsafe products
 To have a choice in products & services
 To have a say in product/marketing decisions
OBJECTIVE
Be able to explain the difference between statutory law & common law
Statutory Law - Laws that are written by congress or other ruling bodies & then enforced
by law enforcement institutions (police, FBI, etc.)
Common Law - Laws that are based on the actions of a “reasonable person,” often
determined in court. (negligence, for example)
OBJECTIVE
Be able to define “Entrepreneurship” and identify its advantages & disadvantages
ENTREPRENEURSHIP: Owning & operating your own business
ASSIGNMENT
Read Chapter 37, Pages 488 - 497
Do One “Critical Thinking” question
Do workbook pages 231 - 234.
Owning & Operating Your Own Business
Advantages
Freedom
Satisfaction
$$$$$
Self-Esteem
Disadvantages
RISK!!!
Loss of income
Long & irregular hours
Need for self-discipline
OBJECTIVE
Be able to describe the most common personality traits of successful entrepreneurs
confidence
flexible
skill
disciplined
risk-taker
healthy
competitive
experienced
determined
goal-oriented
hardworking
people-person
OBJECTIVE
Be able to describe the three major types of business ownership & discuss their advantages &
disadvantages
SOLE PROPRIETORSHIP
Owned & operated by one person (Usually highly skilled)
employs 95% of the workforce
examples include plumbers, dentists, beauticians, small shop owners, etc.
Advantages
easy to start
decisions are easy to make
low taxes
fewer gov. regulations
you get all the money!!
Disadvantages
capital ($) is limited
can’t have “group-think”
no help available w/ other skills
big Risk
PARTNERSHIP
Two or more people legally agree to share the ownership & responsibilities of a business
Advantages
more ideas & opinions to consider
you have help to run the business
the risk is shared
more capital available
Disadvantages
more ideas & opinions to consider (?)
harder to make decisions
personally at risk
death of a partner causes problems
CORPORATION
A charted (legal) entity that operates apart from the owners
the corporation will often sell stock
the stockholders will elect a board of directors to run the company
Advantages
liability is limited to your investment
It’s easy to raise more capital
It’s easy to get into & out of the
corporation (sell or buy stock)
Disadvantages
often a complex & changing ownership
picture making decisions difficult
highly regulated
higher tax rates
Doctors will often incorporate their practice; Why?
FRANCHISE
a legal agreement to operate a business in the name of a recognized company..
Advantages
Franchisor offers help
Planning already done
Disadvantages
Expensive to buy
Limited creativity
INTRODUCTION TO BUSINESS
Quiz Review

Understand the definition of business. Be able to provide an example of how a specific business
meets each part of this definition

Be able to define the terms and provide examples of how each is done:
Production
Marketing
Management
Ethics
Social Responsibility
Statutory Law
Common Law

Be able to discuss at least five things that business should do (in some people's opinion) to fulfill their
social responsibilities. Topics include but are not limited to preserving natural resources, protecting
the environment, treatment of workers, & consumerism.

Define “Entrepreneurship”

Identify & define the three major forms of business ownership