Intro To Business
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Formal – an organization that produces
or sells goods or services to satisfy the
needs, wants, and demands of
consumers for the purpose of making a
profit
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a) type of ownership – i.e. 2 or more owners,
called partnerships
b) the goods it produces or services it offers
– i.e. “Ford Company” produces cars, “All
Languages” provides translators and
interpreters for over 100 languages
c) the different functions it performs in its
community – i.e. the “Canadian Cancer
Society” offers support and raises funds to
help people who have cancer
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d) the types of jobs it provides – i.e. meat
packing company provides jobs to farmers,
inspectors, truck drivers
Entrepreneurs – people who take a risk and
start businesses to solve a problem or to take
advantage of an opportunity
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Need – an item that is necessary for survival
such as food, clothing or shelter
Want- an item that is not necessary for survival,
but it adds pleasure and comfort to life
Goods – monetary ($) value, which may change
over time (i.e. sneakers – old pair might not be
worth as much as a new pair, but they still might
be of some good use and value)
-produced and tangible (can see and touch it)
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Services - $ value
-intangible (can’t touch) i.e. dentist, golfing
- some are unpaid i.e. volunteers doing
community service work
Not-for-profit-organizations – a business
that does not seek to make a profit i.e.
charitable organization that helps people (i.e.
food bank)
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Co-branding – two or more businesses under
one roof
- advantage – allows businesses to share
space, reducing costs of operation and
increasing the opportunity for profit
Economic Resources (factors of production)
- the means through which goods & services
are made available to consumers
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3 Kinds:
a) natural resources – raw materials that
come from earth, water and soil
b) human resources- (labour) – the people
who work to create the goods and services
i.e. banker, farmer
**many businesses have established a
human resources department to manage
their employees
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c) capital resources – i.e. buildings,
equipment, tools, trucks, and factories
- usually last for a long time but large expense
for business i.e. money is also needed
Producers – individuals or businesses that
provide goods or services to meet the needs
and wants of a consumer
Consumers – the people who buy goods and
services
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Demand – the quantity of a good or service
that consumers are willing and able to buy at
a particular price
-we all have different demands
Law of Demand – usually consumers will
increase the quantity demanded of a good or
service as prices decrease
- as prices increase, the reverse is true
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1) consumers must be aware of or interested
in the good or service (advertise)
2) having enough supply of the good or
service
3) making prices that are reasonable &
competitive
4) accessibility – must be conveniently
located – “location, location, location”
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1) change in consumers’ income (i.e. usually
income increases, people buy more, or less
groceries and increase in restaurant meals)
2) change in consumers’ tastes (i.e. fashion
industry-fads)
3) change in expectations of future conditions
(i.e. if they expect prices will increase in
future, often purchase more now and vice
versa)
4) change in population (i.e. create an
increase in need for cars, housing)
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The quantity of a good or service that
businesses are willing and able to provide
within a range of prices that people would be
willing to pay
Law of Supply – the relationship of
increasing the quantity supplied as prices
increase
Conditions that Affect Supply – affected by
the cost of producing it, and, to some extent,
by the price people are willing to pay for it
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1) change in the number of producers
(competition, lower prices)
2) the price of related goods (i.e. the price of
gas goes up, consumers may switch to
smaller, more fuel-efficient cars or use more
public transit)
3) a change in technology – as computer chip
technology improved, computers more
powerful, cost decreased)
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Goal of Business – to make a profit by
supplying goods & services to meet consumer
demands
Profit – the income that is left after all costs
and expenses are paid
Expenses – those expenditures that are
involved in running a business, such as wages
Costs – the amount of $ required for each
stage of production, such as the cost of raw
materials
 As costs and expenses increase, the owner’s
profit gets smaller
 Businesses, therefore, try to keep costs &
expenses as low as possible by being efficient
and well organized
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Competition – demand and supply certainly
have an influence on price, but so does
competition
- i.e. if only one company offered cars for
sale, that company could set the prices and
consumers would have to pay if they wanted
a car
In reality, however, many companies sell cars
& compete for car-buying consumers. This
competition helps keep prices at a reasonable
level
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A business cannot survive unless it produces
goods or services that people need or want
Over the years, many products become
obsolete (no longer in use), either people no
longer want or need products or new and
improved products replace them i.e. 8-track
cassettes, manual typewriters
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Businesses are always looking for ways to
produce new and better products and to
provide better services to consumers
Successful businesses change as the wants
and needs of consumers change