IntroBiz Week 1-23-47 PDF

What is Doing Business? "Doing Business" refers to the process of engaging in any activities that involve producing, selling, or trading goods and services with the aim of generating profit. It is an essential concept that underpins the global economy, representing a variety of activities, from sma...

What is Doing Business? "Doing Business" refers to the process of engaging in any activities that involve producing, selling, or trading goods and services with the aim of generating profit. It is an essential concept that underpins the global economy, representing a variety of activities, from small street vendors to multinational corporations. What is Doing Business? At its core, doing business involves several key elements: 1. Value Creation 2. Profit Motivation 3. Exchange of Goods and Services 4. Sustainability and Growth 5. Risk and Reward 6. Legal and Ethical Considerations What is Doing Business? Value Creation : A business exists to create value, whether through tangible products or intangible services. The value should meet the needs or desires of customers, offering solutions to their problems or fulfilling their demands. Example: A street vendor creates value by selling snacks to busy passersby, while a tech company creates value by offering smartphones with advanced features to enhance communication and entertainment. What is Doing Business? Profit Motivation : The fundamental goal of doing business is to make a profit. This means that the income generated from sales must exceed the costs of production, operations, and other business activities. Example: A small gorengan seller calculates their daily costs (ingredients, labor, packaging) and aims to earn a profit by pricing their products higher than the total costs incurred. What is Doing Business? Exchange of Goods and Services : Businesses operate by providing goods or services to customers in exchange for money or other valuable resources. This exchange can happen in various forms: Selling physical products (e.g., Samsung selling phones) Providing services (e.g., SBM ITB offering education) Example: Samsung produces smartphones and exchanges them for money through retail sales, while SBM ITB offers educational services for tuition fees. What is Doing Business? Sustainability and Growth : Businesses need to focus not only on immediate profits but also on sustainable practices that ensure long-term survival. This involves managing resources, understanding market trends, and innovating over time. Example: A small business like a gorengan seller may evolve by expanding to different locations, while large companies like Samsung continuously innovate by releasing new products to stay relevant in a competitive market. What is Doing Business? Risk and Reward : Doing business inherently involves taking risks. Entrepreneurs must assess market conditions, competition, and customer behavior to make informed decisions that could lead to success or failure. Example: A street vendor deciding to open a second location is taking a risk, hoping that the new spot will attract more customers. Similarly, Samsung investing in the development of a new phone model is a calculated risk aiming for market dominance. What is Doing Business? Legal and Ethical Considerations : Businesses are bound by laws and regulations that govern trade, labor, consumer protection, and ethical practices. Ensuring compliance with legal standards is crucial for long-term success. Example: A small business must adhere to local health regulations when selling food, while a multinational company like Samsung needs to ensure its global operations comply with various international trade laws. Are All These Examples "Doing Business"? What’s different from all of these? Why These Examples Matter Each of the examples (Street Vendor, SBM ITB, Samsung) represents a business at different scales, but they all share common goals. Here’s how they relate to the core concept of "doing business" by creating value for customers and generating profit: Business Value Creation Profit Generation The street vendor provides affordable, ready-to-eat food for people By selling these snacks at a price higher than the cost of ingredients who want a quick snack. This convenience is the value they bring to and labor, the vendor generates a profit. Even though the operation their customers, who may be busy or need something inexpensive to is small, the goal is to earn a daily income to support their eat on the go. livelihood. SBM ITB creates value by offering high-quality education, helping While SBM ITB’s goal may not be purely profit-driven, it still needs students develop skills, knowledge, and credentials that can lead to to generate revenue through tuition fees and other sources to fund successful careers. The value comes from the expertise of the operations. This revenue allows it to reinvest in improving the faculty, the resources provided, and the network opportunities institution’s services, facilities, and programs, ensuring offered to students. sustainability. Samsung creates value by producing high-tech products that Samsung’s scale allows for large profit margins. They sell millions enhance communication, entertainment, and productivity. of products worldwide, generating significant revenue. Profit is Their smartphones, for example, meet global consumer reinvested in research, development, and expanding market share, ensuring they stay competitive. demand for advanced features, sleek design, and reliable performance. Key Business Functions HR (Human Resources): Manages recruitment, training, employee well-being, and workplace culture. Finance: Tracks revenues, costs, profits, and manages budgets for financial health and growth. Marketing: Promotes products/services, attracts customers, and builds brand awareness. Operations: Ensures efficient day-to-day activities, including production, logistics, and service delivery. Key Business Functions HR (Human Resources): Role: HR is responsible for managing the people within an organization, ensuring that the workforce is capable, motivated, and aligned with business goals. Key Functions: Recruitment: Attracts and hires the right talent to meet organizational needs. Training and Development: Provides employees with skills and growth opportunities to improve performance and job satisfaction. Payroll & Benefits: Ensures employees are compensated fairly and receive benefits like health insurance, pensions, etc. Workplace Culture: Shapes a positive work environment that promotes collaboration, productivity, and retention. Importance: HR ensures the organization has the right people in the right roles, fostering a productive and engaged workforce that drives business success. Key Business Functions Example: HR in a Small Business Even though a Pedagang Gorengan (street vendor) may not have a formal HR department, they still handle basic HR functions: Recruitment: The vendor hires helpers, often based on trust or personal connections. Shifts & Schedules: Manages working hours, ensuring enough help during peak times and balancing rest. Training: Informally teaches employees how to prepare food, handle customers, and manage the stall. Compensation: Pays employees daily or weekly, handling payroll in a simple, cash-based system. Workplace Culture: Encourages cooperation and trust within a small, close-knit team. These informal HR practices ensure the business runs smoothly, even at a small scale. Key Business Functions Finance: Managing Money Role: Finance is responsible for managing the flow of money in a business, ensuring that all financial activities are tracked, budgets are adhered to, and profits are maximized. Key Functions: Tracking Income and Expenses: Ensures all revenue (sales, investments) and costs (materials, salaries, rent) are recorded accurately. Budget Management: Creates and monitors budgets to control spending and allocate resources effectively for business operations and growth. Cash Flow Management: Ensures there is enough liquidity to cover day-to-day operations, avoiding cash shortages. Profitability Analysis: Analyzes financial data to assess whether the business is profitable and identifies areas for improvement. Importance: Financial health is vital for the sustainability and growth of any business. Proper management of money ensures a business can meet its obligations, invest in opportunities, and remain profitable in the long run. Without sound financial practices, even successful businesses can fail. Key Business Functions Example: Finance in a Small Business Even though a Pedagang Gorengan operates on a small scale, basic financial management is still crucial: Tracking Daily Income: The vendor keeps a simple record of daily sales, often manually counting the money earned each day after selling snacks. Tracking Expenses: Keeps track of daily costs like ingredients (oil, flour), gas for cooking, and packaging. These expenses are often paid in cash, and the vendor must ensure they are covered by the day's sales. Budgeting: While informal, the vendor allocates a portion of income for purchasing supplies for the next day, saving profits for personal or business needs. Profit Calculation: After subtracting daily expenses from income, the vendor determines their profit, ensuring the business remains profitable over time. Cash Flow: Ensures enough cash on hand for operating the stall daily, avoiding running out of essential supplies. Even at a small scale, tracking income and expenses is key for sustainability and ensuring that the business remains profitable. Key Business Functions Marketing: Understanding and Reaching Customers Role: Marketing is responsible for promoting a business’s products or services to the right audience. It involves identifying customer needs and effectively communicating how the business can meet those needs. Key Functions: Market Research: Understands customer preferences, behaviors, and trends to tailor products/services. Promotion & Advertising: Uses channels like social media, word-of-mouth, or traditional ads to inform potential customers about offerings. Branding: Builds a recognizable brand image that resonates with the target market, creating a positive perception. Customer Engagement: Engages with customers through promotions, loyalty programs, and customer service to build relationships. Importance: Marketing creates awareness, attracts new customers, and helps retain existing ones, ensuring steady business growth. Without effective marketing, even the best products may go unnoticed. Key Business Functions Example: Marketing in a Small Business Even though a Pedagang Gorengan has limited resources, they still engage in marketing to attract and retain customers: Location as a Marketing Tool: Choosing a strategic spot (near schools, offices, or busy streets) to attract foot traffic. Word-of-Mouth: Relies heavily on satisfied customers to spread the word about the quality of their products, such as freshness or taste. Product Display: Arranging snacks in a visually appealing way to draw attention and encourage impulse buying. Customer Interaction: Builds relationships with regular customers through friendly service, offering discounts, or occasionally giving extra portions to maintain loyalty. Pricing Strategy: Keeps prices competitive and affordable to appeal to a wide range of customers. Even simple marketing strategies can significantly boost visibility and sales for small businesses. Key Business Functions Operations: Running Day-to-Day Activities Role: Operations ensure the smooth functioning of a business by overseeing the production of goods or delivery of services. It focuses on efficiency, quality, and cost-effectiveness. Key Functions: Production Management: Ensures goods are produced efficiently, with minimal waste and maximum output. Supply Chain & Inventory: Manages the sourcing of materials, maintaining stock levels to meet customer demand without overstocking. Quality Control: Ensures that the products or services meet the required standards and customer expectations. Logistics: Manages the movement of goods from suppliers to the business and from the business to customers. Customer Service: Ensures smooth service delivery, addressing customer needs promptly and effectively. Importance: Efficient operations are crucial for cost savings, quality, and timely delivery, directly affecting customer satisfaction and profitability. Without strong operational management, a business cannot function effectively. Key Business Functions Example: Operations in a Small Business Even in a small business like Pedagang Gorengan, daily operations are crucial to ensure smooth business activity: Product Preparation: Ensures gorengan (fried snacks) are freshly made each day, maintaining consistent quality and taste. Supply Management: Manages daily purchases of ingredients like oil, flour, and vegetables, ensuring the right amount is bought to avoid wastage or shortages. Cooking Process: Uses efficient cooking techniques to maximize production during peak hours, ensuring all orders are fulfilled quickly. Customer Service: Serves customers efficiently, keeping waiting times short, especially during busy periods, to retain and attract customers. Waste Management: Minimizes waste by managing leftover ingredients and ensuring proper disposal of used materials like cooking oil. Even small-scale operations must be well-organized to ensure efficiency, quality, and customer satisfaction, driving consistent sales and profits. Starting from a Garage: Apple, Google, and eFishery Apple: Founded by Steve Jobs and Steve Wozniak in a garage, they built their first computers with minimal resources. Today, Apple is a global tech leader, showcasing how small beginnings can lead to massive success. Google: Started by Larry Page and Sergey Brin in a garage while working on a research project. From a search engine project, Google has now become one of the largest tech companies in the world. eFishery: A local success story, eFishery started in a small warehouse, focusing on fish farming technology. Today, it is a recognized player in the aquaculture industry. Lessons from Successful Business Execution (Apple, Google, eFishery) Success in these companies wasn’t just about innovation but also about effectively managing the four key business functions: HR (Human Resources): They recruited the right talent early on, whether it was engineers, marketers, or operational staff, ensuring they had the right people to grow the business. Focused on building a strong team culture that encouraged creativity, collaboration, and innovation. Finance: Managed finances carefully in the early stages, using limited resources efficiently to fund operations, development, and marketing. They attracted investors who believed in their vision, ensuring financial growth as they scaled. Marketing: Each company effectively identified their target markets and communicated their value propositions. Apple emphasized design and user experience, Google focused on efficiency and simplicity, and eFishery catered to the fish farming industry with technology-driven solutions. They built strong brands that resonated with customers, creating loyal followings. Operations: All three businesses optimized their operations from day one. Apple streamlined production, Google developed scalable digital infrastructure, and eFishery refined its supply chain for delivering their technology to fish farmers. Focused on quality, efficiency, and customer satisfaction, ensuring smooth operations as they grew. Why Every Business Needs HR, Finance, Marketing, and Operations Regardless of the size or type of business, the four key functions are essential for success: HR (Human Resources): Ensures the business attracts, retains, and develops the right talent to achieve its goals. A strong team is the foundation of any successful business. Finance: Manages the business’s money—ensuring there’s enough cash flow, keeping expenses under control, and planning for future investments. Financial health is crucial for sustainability. Marketing: Helps the business reach its target customers, communicate the value of its products or services, and build brand loyalty. Without effective marketing, even great products can fail to gain traction. Operations: Focuses on the efficiency of the business, ensuring that goods or services are produced and delivered on time and at the right cost. Well-run operations improve customer satisfaction and profitability. Key Takeaway: Every business, from startups to large corporations, needs to manage these four functions effectively to grow, thrive, and compete in the marketplace. How to Apply These Functions in Your Own Business When starting or running a business, understanding how to manage the four key functions will help you succeed: HR (Human Resources): Hire people who align with your vision and company culture. Focus on training and motivating your team to perform at their best. Finance: Keep track of your income, expenses, and profit. Create a budget and stick to it, ensuring you have enough cash to grow. Marketing: Identify your target market and understand their needs. Develop a marketing plan that effectively promotes your products or services. Operations: Make sure your business runs efficiently every day, from managing inventory to delivering products on time. Continuously look for ways to improve processes and reduce costs. Key Takeaway: By understanding and applying these business functions effectively, you can build a strong foundation for your business, no matter the size or industry. Your Journey Begins Here Learning the Fundamentals: Throughout this course, you’ll explore how businesses operate, from small ventures to large corporations, and understand the core elements that make them successful. Applying the Knowledge: You'll not only learn theories but also apply these key business functions (HR, Finance, Marketing, Operations) to real-world examples and situations. Building Your Own Business Skills: Whether you aim to start your own business or work in an established company, mastering these business functions will give you the tools to succeed in any industry. Key Takeaway: This course will equip you with the knowledge and skills to understand, start, or improve a business. Your journey in the world of business starts now! Group Activity: Applying Business Functions Objective: In groups, apply what you’ve learned about the four business functions (HR, Finance, Marketing, Operations) to a small business idea. Task: Choose a Business Idea: A simple startup (e.g., a food stall, online shop, or service). HR: How would you hire and manage employees? Finance: How would you manage your budget and track profits? Marketing: How would you reach your target audience? Operations: How would you ensure smooth day-to-day activities? Presentation: Each group will briefly present their business idea and how they would manage each of these four key functions.