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