What is a business?

A business is an organization set up to produce and/or sell goods and/or services to satisfy the needs, wants, and demands of consumers with the purpose of making a profit.

Examples – lemonade stand to Nike

What does non-profit, not-for-profit and for-profit business mean?

Non-profit businesses are set up to raise money for a charity.

Example: the Canadian Breast Cancer Foundation exists to raise money to advance: cancer research, education, diagnosis, and treatment. (CIBC run for the cure)

Do you have a favourite charity? For every dollar donated how much do you think is donated to the cause? ~ Read to class

Not-for-profit businesses put any money they receive back into the organization. Example: housing or child care centers.

For-profit businesses are organizations that produce goods or sells good or services for the purpose of making a profit.

East Coast Lifestyle, Cineplex

What is the difference between revenue and profit?

Revenue is the price the consumer (customer) pays for the product/service

Profit is the amount of money the company gets after it pays off the expenses and costs that it had to make that product or be able to provide the service.

The amount they get back in profit (money they make) can be used to make better/ different/ or more products to sell, the owner of the company could take it out and use it for personal use, or they could open up a new location, etc.

Risk vs. Reward with additional locations…

Sole Proprietorship – owned by one personEx: East Coast Lifestyle

Partnership – owned by two or more partners

Franchise – One business licenses another to use it’s name. Ex. PODS

Corporation – Business is created by law and owned by shareholders.Ex. TD Bank or Tim Horton’s

Work with a partner to describe a business you are familiar with. In your own words tell us about:

Its purpose (for profit, non-profit, or not for profit)

The industry it falls under Form of ownership The goods or services it provides How it delivers its goods or services Their role in the community The kinds of jobs it provides.

Producers are the businesses that make goods or provide services.

Consumers are the people who buy the good or service.

Producers and consumers operate together to create a marketplace.

This is any location where producers and consumers come together to buy or sell goods or services.

Talk to the person next to you about the following:

What do you think of this? Do you agree?

Do businesses actually function in this way?

Name some that do? Name some that don’t? What is the difference between the two?

Many years ago consumers had little choice in what they could buy.

When cars were first produced there was one model and they were black.

So you could either buy it or not buy it. Is this the case today? Why do you think things have changed?

Businesses were not concerned with meeting the needs and wants of the consumer because if there weren’t any other business to lose the sale to.

They had what is called ‘Pricing Power’ meaning they could get away with charging high prices and raise prices again when costs go up

Ex. NS pays highest power rates than any other province!

Companies need to take into consideration what they believe a consumer will pay for their product when they determine the price of it.

If it’s too high the company may not sell many and if the price is too low they may sell a lot but their profit would not be as high as it could be.

Thanks to competition, consumers have the power to choose where they will buy goods and services, and how much they will pay for them. This is called consumer ‘purchasing power’.

Why is competition good for both consumers and businesses?