Chapter 6 Types Functions of Businesses6 2 Types

Chapter 6 Types & Functions of Businesses-6. 2

Types of Businesses 1. Producers gather raw goods in original state from natural resources. Agriculture, mining, fishing, forestry 2. Processors change raw materials into more finished products. Require further processing— -Sugar cane into sugar -Crude oil into gasoline -Iron ore into steel

Types of Businesses-cont’d � 3. Intermediaries & Wholesalers ◦ a. Intermediary moves goods from one business to another. ◦ b. Buys, stores, then resells goods. ◦ Wholesalers distribute goods. �Also known as distributors. �Clothing wholesaler—buys thousands of jackets from several manufacturers, then �Divides them into smaller quantities & sells them to retailers.

Retailers & Service Businesses � 4. Retailer purchases from wholesaler & sells to consumers. ◦ Examples: service stations, auto dealers ◦ Service businesses employ ¾ of workforce �Perform tasks—medical clinics, law firms �Provide conveniences—taxi companies, cleaning services

Functions of Businesses � 1. Production & procurement ◦ Production is the process of creating, expanding, manufacturing or improving goods/services. ◦ Procurement is the buying & reselling of goods that have already been produced. ◦ Wholesalers buy goods from producers to resell to retailers & other wholesalers.

Functions – cont’d � 2. Marketing – process of planning, pricing, promoting, selling & distributing ideas, goods & services. � Involves service. getting consumer to buy product or � Marketers make decisions based on market research of trends & consumer habits.

Functions – cont’d � 3. Management is process of achieving company goals by: ◦ planning, ◦ organizing, ◦ leading, ◦ controlling & evaluating effective use of resources.

4. Finance/Accounting � Finance – manage money & analyze financial statements to make future decisions. � Accounting – maintaining & checking records, handling bills & preparing financial reports for a business.

�The functional areas of business depend on each other. �Companies benefit when all functional areas work together.