Business Basics

Business Basics

• A business is an organization or activity that provides goods or services to meet the needs of customers, aiming to make a profit.
• Profit is achieved when a business receives more money than it spends.
• Goods are physical things that people buy, while services are actions or tasks performed for another person.

Types of Economy

• Traditional Economy: a bartering system where people exchange items they have for things they need, creating a direct swap of goods or services.
• Controlled Economy: the government decides what gets produced, how much, and how it's distributed.
• Free-market Economy: individuals and businesses make most of the decisions about buying and selling goods and services, with minimal government control.
• Mixed Economy: both people and the government have a part in decision-making, ensuring a balance between individual freedom and government regulation.

Market Research

• Market research involves checking if an idea will work or can be improved by researching the competition, market pain, and customer reviews.
• Secondary market research uses companies to find information about other companies, while primary market research involves conducting one's own research, such as surveys, which is the most accurate but time-consuming method.

Business Planning

• A business plan is a roadmap that helps entrepreneurs figure out what they want to do, how they'll do it, and what might come up along the way.
• It enables making smart decisions and being prepared for potential challenges, ultimately leading to business success.

Target Market

• The target market is the specific group of people a business aims to sell its products or services to.

Business Risks

• Business risks are factors that may cause a company to fail or lose money.
• Market risk occurs when customers no longer want a company's products or services.
• Financial risk involves unexpected expenses or financial obligations.
• Environmental risk includes external factors like weather, pandemics, or earthquakes that can impact a business.

Supply Channels

• Supply channels are the ways in which a business gets its products or services to customers.
• Direct supply involves sending goods or services directly to the customer.
• Indirect supply involves using intermediaries, such as stores, between the company and the customer.

SWOT Analysis

• SWOT analysis is a tool that helps businesses identify and address potential risks and opportunities.
• Strengths: what a business does well.
• Weaknesses: what a business does not do well.
• Opportunities: goals or areas for improvement that can enhance a business.
• Threats: potential roadblocks or obstacles that a business may face.

Test your knowledge of business fundamentals, including types of businesses, goods and services, profit, manufacturers, and supply. Learn the basics of business and understand how companies operate.