Purpose and Functions of Business Understand the purpose

Purpose and Functions of Business Understand the purpose and the functions of business

Purpose of Business n Businesses fulfill the needs and wants of consumers. n Consumers use goods and services n Customers purchase goods and services n Businesses sell goods, services or both to consumers n Goods—clothing, cars, computers, CDs n Services—hairdresser, dry cleaner, lawn care, babysitting

Motivation to start a business Profit motive—desire to make money; see the opportunity to make money in the marketplace. n Opportunity to meet wants and needs of consumers n Opportunity to increase competition in the marketplace n Businesses are investment opportunities for individuals—future income n

Functions of Business n Accounting—recording and reporting financial activity and transactions n Examples n Paying bills n Collecting money from customers n Paying taxes n Preparing employee payroll checks n Reconciling bank statements n Investing cash n Purchasing inventory

Functions of Business n Management n Makes sure that the entire organization meets its goals and obligations n Effectively works with people in the organization n Uses available resources to accomplish the organizations’ goals

Functions of Business n Marketing n Satisfies the needs and wants of consumers through exchange n Based on four “P’s” n Product n Price (establishing the price of the product) n Placement (placing the product in attractive and convenient sales locations) n Promotion (advertising)

Functions of Business n Information Technology n Uses technology to share knowledge, facts, and data to others (co-workers, customers, and suppliers) n Examples n Maintains e-mail accounts n Maintains software applications n Maintains processing systems n Maintains hardware for all technology used

Functions of Business n Operations n Considered n Involves the “back office” behind the scenes paperwork required to complete all transactions n Found in both the service and the manufacturing sector

Functions of Business n Human Resources n Manages “people” relations within the company n Helps workers develop the skills and knowledge needed to be successful on the job n Responsible for hiring and firing of employees n Selects employee benefits and enrolls all employees in the benefits (insurance, retirement, etc. ) n Helps employees pursue educational opportunities