Welcome to
MGTA01
Introduction to Business
Today’s Lecture: Agenda
1. Course Intro & Overview
Break (10 minutes)
2. “Business Enterprise”
MGTA01: Introduction
MGTA01 background and overview:
- “business” defined
- economic systems
-measuring performance
- entrepreneurs
- forms of organization
- strategy
- factors of production
- markets/competition
- small businesses
- business plans
- raising capital
Please read the textbook
Course Textbook
Introduction to Canadian Business
Chris Bovaird
Second Edition
McGraw Hill Education
2019
Available in the UTSC Bookstore
Professor Toor
• Teaches courses in
business,
entrepreneurship,
marketing and operations
• Runs his own business
• Believes in participatory
style of teaching
Arif Toor – Contact Info
e-Mail:
Office:
Hours:
a.toor@utoronto.ca
BB Collaborate
Wed 11 – 1 (By appointment only)
Most other afternoons:
shoot me an email
Course Evaluation
Type
Probable Date
Weight
Format
1st Midterm
Oct 20th, 2021
20%
20-40 MCQs
1 – 3 SAQs
2nd Midterm
Nov 17th, 2021
30%
30-50 MCQs
1-3 SAQs
Final Exam
Somewhere in Dec
50%
40-60 MCQs; 3-6
SAQs
Note Takers
I am asking for volunteer note takers
If:
You attend class regularly
Take fairly detailed notes
Have decent handwriting or
Type your notes
Please consider volunteering
er… that’s it
MGTA01 – Intro to Business – Key Points
Main points of today’s lecture:
Definition of “business”
Characteristics of business
Revenues and expenses
Profit and Loss
The Profit Motive
Risk and Return
What is a BUSINESS?
• Any
activity undertaken for
the sake of profit is known as
business
“Business” Defined as per the textbook
Business:
an organised effort,
to create or provide something,
that people want
and will pay for,
in order to make a profit.
Your Turn
• Think of a profession whose practitioners make a lot
of money (in your opinion).
• Share the profession and the estimated annual
earnings with the class..
Business and Wealth Maximization
• Businesses are a means to wealth maximization
This is a business
So is this…
..
Business: Characteristics
This business exists…
Because people might be hungry
Business: Characteristics
This business exists…
Because people might be thirsty
Business: Characteristics
Customers need and want things
and they will pay for them
Why do businesses exist?
• Businesses exist to satisfy customer needs
and acquire benefits from this activity
• Business ideas can come from:
Entrepreneurs
Environment
Experts
Government Legislation
Evolution of Business
• http://www.bain.com/publications/articles/3000years-of-business-history-in-two-minutes-video.aspx
Business: Some Basics
A business must make enough money to
continue serving its customers
The $$$ that comes in:
“Revenues”
or
“Sales”
Business: Characteristics
Customers pay, get something in return.
The business must provide a pizza.
Dough = 50 ¢
Cheese = 50 ¢
Mushrooms = 40 ¢
Green Pepper = 40 ¢
Onion = 15 ¢
Paper Plate = 5 ¢
Profit
Profit - The difference between:
$$$ in (revenues or sales)
$$$ out (costs or expenses)
Profit: Simple Example
Business sells small, plain pizza
Revenue (sales)
= $6.00
less Expenses (costs) = - $5.00
Profit
=
$1.00
Profit versus Loss
Profit
When revenues are more than costs
business owners become wealthier
Profit versus Loss
Loss
When revenues are less than costs
Business owners become poorer.
Profit
Key reason for a business to exist
Not all organisations are businesses
Hospitals, universities, churches: provide
services but not intended for profit
These are “not for profit” organisations
Not for Profit Organisations
This is not a business
Not for Profit Organisations
Nor is this
Businesses vs. Not for Profits
A business tries to make a profit
Churches and universities do not
U of T is not a business
Tuition fees pay for less than 40% of
the cost of running the university
11%
3%
19%
38%
14%
26%
tuition fees
government grants
research grants
investments
donations
other
The Profit Motive
People give up their time, energy and
money if there is incentive to do so.
Profit – the chance for owners to create
wealth – is the incentive
The Profit Motive
He liked the idea.
Adam Smith
The Profit Motive
He didn’t.
Karl Marx
Businesses Can and Do Fail
New Entries
Exits
Net Change
120
100
80
60
40
20
0
-20
-40
-60
-80
-100
2002
2003
2004
2005
2006
2007
2008
2009
Businesses Can and Do Fail
2002-2009: Canadians started 95,000
businesses per year
(260 per day)
88,000 closed (240 per day)
2008-2009: Number of businesses fell
by ~ 40,000
Businesses Can and Do Fail
• Running a business is difficult
• Running a business is complicated
• Businesses must anticipate needs
• Customers are unpredictable
• Competition can enter at any time
Businesses Can and Do Fail
Another characteristic of business:
“risk”
Main points - Review
Definition of “business”
Profit and Loss
The Profit Motive
Risk
• Thanks