Objective 1 Vocabulary PURPOSES OF BUSINESS O Profit O Money that remains after a business has paid for the expenses of running the business. O Income > Expenses Purposes of Business O Profit Motive O A person's incentive to work to gain something for himself or herself (that is to make money). Purposes of Business O Competition O Contest between businesses to win customers ‘ business and loyalty Purposes of Business O Needs O Items necessary for existence, such as clothing, food, shelter Purposes of Business O Wants O Items that would be nice to have but are not necessary Purposes of Business O Consumer O A person who uses good or services. O Many times that consumer is also the customer (purchaser) Purposes of Business O Goods O Items businesses sell that can be physically weighted or measured, such as iPODS and CDs Purposes of Business O Services O Tasks that businesses perform or provide for customers, such as hair cuts and car washes Types of Businesses O Sole Proprietorship O A business owned by only one person. Types of Businesses O Partnership O A business owned by two or more people Types of Businesses O Franchise O A contract between a parent company and a franchisee to use the name and sell the goods or services of the parent company, such as KFC. Types of Businesses O Non-profit organization O A business whose goal is to provide a service rather than to make a profit, such as the American Red Corss. Types of Businesses O Corporation O A business considered separate from the owners of the business by law. The owners are the stockholders. Types of Businesses O Multinational corporation O A company that does business and has business facilities in many countries, such as Coca-Cola. Functions of a Business O Accounting O The process of recording and reporting the financial data for a business Functions of a Business O Management O The process of leading and directing all or part of an organization. Functions of a Business O Marketing O The process of creating, promoting, and presenting a product to the consumers. Functions of a Business O Information Technology O The process of developing, installing and implementing computer information systems and applications. IT includes the support and maintenance of computer hardware and sfotware. Functions of a Business O Operations O The activities involved in the day-to-day running of a business for the purpose of producing value for the stakeholders. Functions of a Business O Human Resources O The activities that deal with the hiring, firing, training and other personnel (employee) issues.