Purpose and Functions

of Business

What do businesses do?

Businesses fulfill the needs and wants of consumers by selling goods, services or both to consumers.

Goods = tangible items (e.g. Clothes, Cars, Computers, etc)

Services = intangible items (e.g. hairdresser, dry cleaner, babysitting, etc)

Needs

vs.

Needs = Must have to Survive (e.g. Food, Water, Shelter, etc)

Wants = Desired goods and services (e.g. iPad, Diamonds, Cute Fluffy Puppies, etc)

Motivation…

to start a business

Profit Motive

The desire to make money; see the opportunity to make money in the marketplace.

Profit = revenue - expense

Businesses are also investment opportunities for individuals for future income.

increase competition in the marketplace.

meet wants and needs of consumers, Opportunity to:

and/or

Functions of Business

Accounting:

Records and reports financial activity and transactions

Examples •Paying bills •Collecting money from customers •Paying taxes •Preparing employee payroll checks •Reconciling bank statements •Investing cash

Management:

Organization : assigns roles and responsibilities of group and individuals. Control : makes sure goals are met Planning: develops plans and forecasts for the future

Satisfies the needs and wants of consumers through exchange Based on four “P’s”

Product Price (establishing the price of the product) Placement (placing the product in attractive and convenient sales locations) Promotion (advertising)

Marketing

Uses technology to share knowledge, facts, and data to others (co-workers, customers, and suppliers) Examples

Maintains e-mail accounts Maintains software applications Maintains processing systems Maintains hardware for all technology used

Information Technology

Involves behind the scenes paperwork required to complete all transactions. Found in both the service and the manufacturing sector.

Operations

Manages “people” relations within the company Helps workers develop the skills and knowledge needed to be successful on the job Responsible for hiring and firing of employees Selects employee benefits and enrolls all employees in the benefits (insurance, retirement, etc.) Helps employees pursue educational opportunities

Human Resources