Business Characteristics
Hierarchy of needs proposed by
Abraham Maslow
Financial Transactions
Are financial entries affecting the financial position of a business
Intermediaries
Are referred to as the middleman, move finished goods from one business to another, buy, store and resell goods
Financial Statements
Are the reporting process of accounting, are used to make financial decisions
Factors of Production
Are the resources available to supply products and services
Finance & Accounting
Are vital because a business cannot exist without cash flow •
Two main types of Financial Statements
Balance Sheet, Income Sheet
Processors
Change raw goods into a more finished form, produce processed goods
Manufacturers
Change raw or processed goods into finished goods
The Marketing Mix
Consists of interrelated marketing strategies used to meet consumer needs, Product, Price, Promotion, Place
Producers
Develop products for distribution from raw goods − raw goods are materials derived from natural resources
Promotion
activities to persuade consumers they need the product • includes packaging, commercials, trials, etc.
Owner's equity
amount of capital invested by owners, total value of assets minus liabilities
The Steps involved with Human Resources are
assess employment needs, recruit potential employees, select employee who fulfills goals, help employee get oriented
The accounting equation is
assets = liabilities + owner's equity (both sides of the equation must balance)
Financial transactions classifications are
assets, liabilities, owner's equity, capital
Examples of Service Firms
beauty salons, landscaping companies, plumbing companies
Wholesalers
buy finished goods from manufacturers in large quantities and sell them to businesses in smaller quantities
Retailers
buy finished goods from manufacturers or wholesalers and sell them directly to the consumer
Examples of assets are
cash, land, buildings, equipment
Example of Intrinsic
challenge, enjoyment, accomplishment
Examples of processors are
cotton mills, oil refineries, textile mills, food processors
Finance & Accounting Focus on the following
creating up-to-date, accurate financial statements, making a plan to create profits, managing and utilizing company resources 2.
Examples of liabilities are
credit, mortgage payments
Liabilities
debts or obligations of a business
Focusing on Motivation can help meet employees needs which includes two types
extrinsic, intrinsic
Examples of producers are
farming, forestry, mining
Labor
human input for production process
Product
is a good and/or service designed to meet consumer wants and needs, is determined by conducting studies and surveys
Place
is a location where products and/or services are sold • includes stores and location within a store
Assets
items of value owned by a business
Examples of Manufacturers are
juice factories, clothing factories, automobile factories
Responsibilities of Human Resources include
maintaining the employment process, training and developing staff
Capital
man-made objects, such as machinery and equipment, which are used in production
Example of extrinsic motivation
money, benefits, recognition
Intrinsic
motivation occurring internally
Extrinsic
motivation through outside sources
Price
must be low enough to attract consumers, must be high enough to cover costs and create profit
Land
natural resources available for production
Management has different main functions
planning, organizing, directing, controlling
Income statement
reports net income or net loss of a company
Balance sheet
reports totals in asset, liability and owner's equity accounts
Entrepreneurship
the drive to develop an idea into a business
Modes of transportation
waterways, railroads, trucks, airlines
Net loss
when expenses are greater than revenue
Net income
when revenue is greater than expenses
Examples of intermediaries are
wholesalers, retailers
Accounting
Is a system used to record, classify, summarize and report the financial position of a business
Distribution
Is getting produced goods and services to consumers in a timely manner, is typically from producers to wholesalers and retailers
Marketing
Is the action of promoting and selling products or services
Management
Is the process of reaching a company's goals and objectives by utilizing its resources
Examples are
Land, Labor, Capital, Entrepreneurship
What are all the classified work activities performed by businesses?
Producers, Processors, Manufacturers, Intermediaries, Service Firms, Non-profit Organizations
Non-profit Organizations
Provide goods and services to businesses and individuals • Operate on donations, volunteers and philanthropists rather than income/profit
Service Firms
Provide services to consumers and other businesses
Human Resources
Requires following laws and proper procedures, requires people with strong human relation and communication skills
Examples of Non-profit Organization
Salvation Army, United Way of America, American Red Cross, YMCA and YWCA
What are the Hierarchy of Needs
Self-Actualization, Self-Esteem, Belonging & Love, Safety, Basic Needs