Types of businesses

UNIT 1: Business Fundamentals

WHAT IS A BUSINESS?▪ In groups of 2:

1) Brainstorm a definition for a business;2) Create a list of at least 20 specific businesses. (Aim for variety.)

PIECES OF THE ‘BUSINESS’ PUZZLE

Accounting

Marketing/ Sales

Information & Communication

Technology

Human Resources

Production

Ethics & Social Responsibility

Skills

Knowledge

WHAT IS A BUSINESS?▪ An important classification is if the

business if FOR-PROFIT or NON-PROFIT (also called Not-for-Profit).

A FOR-PROFIT BUSINESS:

▪ An organization that produces or sells goods or services (G & S) to satisfy the needs, wants and demands of consumers for the purpose of making a profit ($).

Of your 20 businesses, do they provide goods or services, or both?Goods▪ items that have monetary value

and can be seen and touched. (TANGIBLE)

▪ Services▪ assistance provided, usually in

return for payment, to satisfy needs/wants of people or business. (INTANGIBLE)

GOODS AND SERVICES:

FOR-PROFIT BUSINESSES:

PROFIT = income that is left after all costs and expenses are paid.

EXPENSES = cost that are incurred in running a business.(e.g. wages ex, office supplies ex, telephone, ex)

COSTS = the amount of money required for each stage of production. (e.g. raw materials)

FOR EXAMPLE:▪ A hotdog stand owner sells $1,000 worth of food in one

day.

▪ The cost of the food is $400, which includes buns, hotdogs, toppings and drinks.

▪ The vendor is renting the stand for $100 per day and he is paying the city $25 per day for the permit.

▪ The vendor pays himself $100 in wages for the day.

▪ What is the profit of the Business? $375/day

NON-PROFIT ORGANIZATION:

▪ Its purpose is something other than profit▪ It may still be interested in raising funds - but it

will be for a specific goal.For example:▪ Canadian Breast Cancer Foundation raises funds through events like the

CIBC run for the cure, ▪ Heart and Stroke Foundation raises funds through the Heart and Stroke

Lottery

TYPES OF BUSINESSES:

▪ 1. Service business: Generates profit by doing something for other businesses or consumers.

▪ For example: Cable companies, airlines, theatres and movers.


▪ 2. Retail business: Generates profits by selling things. Usually buys items from a manufacturer (producer of item) and then sells them the consumer.

▪ For example: Department stores, electronics stores, grocery stores.


▪ 3. Manufacturing business: Generates profit by producing products from raw materials or component parts (semi-processed) and then selling them to distributors/retailers.

▪ Manufacturers can be retailers also if they sell directly to the end consumer

▪ For example: Appliance and car manufacturers.

Needs◦ Items that is necessary for

survival.Wants

◦ Items that are not necessary for survival but add pleasure or comfort to life.

NEEDS VS. WANTSIn pairs, brainstorm one list of

needs and one list of wants

Questions:

1.Create a list of (what you believe to be) essential (necessary) goods for all member of our society.

2.Create a list of essential (necessary) services for all members of our society.

3.Do “essential” goods and services differ by geographic region? Explain and give examples.

Education

Types of businesses