Introduction to Introduction to Business ActivitiesBusiness Activities

1. Purpose 1. Purpose

2. Types of Businesses 2. Types of Businesses

3. Jobs in Service industries 3. Jobs in Service industries

4. Business Resources 4. Business Resources

5. Unlimited Needs & Wants 5. Unlimited Needs & Wants Vs Limited Resources Vs Limited Resources

6. Managing Financial Resources 6. Managing Financial Resources - Calculation of Loan Interest- Calculation of Loan Interest

7. The Changing Business Environment 7. The Changing Business Environment

8. Nature of Competition8. Nature of Competition- Direct vs Indirect- Direct vs Indirect

1. PURPOSE OF BUSINESS ACTIVITIES1. PURPOSE OF BUSINESS ACTIVITIESHow will this affect the people in the country & the country?

- Provide Goods and Services to the people.

- Provide Jobs for the people.

- Contribute to the wealth of the country.

2 business terms you must know:

NEEDSNEEDS – These are goods and services that are necessary for SURVIVAL.

Question: What are some basic needs of yours?

WANTSWANTS – These are goods and services that are NOT necessary for survival but which we WISH to have.

2. TYPES OF BUSINESSES2. TYPES OF BUSINESSES

GOODS-PRODUCING SERVICES

The goods:

- can be seen & touched

- are produced with machines and/or labour

Examples:

The services:

- CANNOT be seen & touched but can be EXPERIENCED.

- are performed when sellers interact with customers.

Examples:

WHAT ABOUT THESE?WHAT ABOUT THESE?

3. Jobs in Service industries 3. Jobs in Service industries

RETAILRETAIL

TRAVEL AND TOURISMTRAVEL AND TOURISM

HOSPITALITYHOSPITALITY

RECREATIONRECREATION

FINANCEFINANCE

HEALTH CAREHEALTH CARE

EDUCATIONEDUCATION

4. Business Resources (‘CELL’) 4. Business Resources (‘CELL’)

CCAPITAL

EENTERPRISE

LLAND

LLABOUR

Natural resources Eg: rivers, forests, minerals, oil etc.

You need land to grow crops / build factories to produce goods to meet customers’ needs and wants.

Buildings, equipment and machinery used to manufacture goods and services.

Use of business resources to produce goods and services, and earn profits.

Efforts of the people involved in the production of goods and services. Eg: Farmers, receptionists, tour guides, chefs, bus drivers, engineers, teachers form part of the labour force etc.

5. Unlimited Needs & Wants Vs Limited Resources 5. Unlimited Needs & Wants Vs Limited Resources

6. Managing Financial Resources 6. Managing Financial Resources - Calculation of Loan Interest- Calculation of Loan Interest

Needs & Wants > Resources

Question: What is money needed for when you start a new business?

Salary of Worker

Machinery

Office Furniture &Equipment

Rent and Utilities

Raw materials etc

Question: Where do you get the money when you want to start a new business?

Personal Savings

Loan from a Family members / friends

Bank Loans

Trade Credit fromSuppliers

What is Trade Credit from Suppliers?What is Trade Credit from Suppliers?

You get your goods first and pay your suppliers later.

Question: Why does the entrepreneur not have enough $ to pay his suppliers?

- Customers do not settle their debts on time

- Sales tend to go up or down according to the seasons of the year

Calculate LOAN INTERESTCalculate LOAN INTEREST

Interest = $Amount borrowed x Interest rate/100 x Duration of loan

Refer to Textbook Pg 8 and 9

7. The Changing Business Environment 7. The Changing Business Environment

“PETS D G”

PPolitical and Legalolitical and Legal

EEconomicconomic

TTechnologicalechnological

SSocialocial

DDemographicemographic

GGloballobal

NATURE OF COMPETITIONNATURE OF COMPETITION

1. 1. DIRECTDIRECT

2. INDIRECT2. INDIRECT