Key Idea: A business is an organization that provides goods or services to satisfy customer needs and wants, adding value through the transformation process.
- Business
- An organization providing goods/services to satisfy customer needs and wants.
- Goods
- Tangible (physical) products that can be touched and stored.
- Services
- Intangible activities performed for customers.
- Needs
- Essentials required for survival.
- Wants
- Desires that improve quality of life but are not essential.
The 4 Business Functions
- Human Resources (HR) — manages people
- Finance & Accounts — manages money
- Marketing — satisfies customer needs
- Operations — creates products/services
⛏️ Production Sectors: Primary: extracts raw materials. Secondary: manufactures products.
🛍️ Service Sectors: Tertiary: provides services. Quaternary: provides knowledge.
Developed economies = more tertiary/quaternary. Developing economies = more primary.
Starting a Business — Key Steps
- 1. Identify opportunity
- 2. Market research
- 3. Business plan
- 4. Secure financing
- 5. Choose legal structure
- 6. Register & launch
✨ Opportunities: Unlimited income potential. Independence & flexibility. Pursuing passion. First-mover advantage.
⚠️ Challenges: Cash flow problems. Competition. Long hours & stress. Legal compliance.
Important: Cash flow problems are the #1 killer of new businesses — even profitable ones can fail without cash!
Always define a business as providing goods OR services to satisfy needs AND wants. Link functions together (interdependence). Balance opportunities with challenges.