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