Mesut Yavas | Non-profit of not-for-profit organisatie

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Non-Profit or Not-for-Profit Organization
Non-profit of not-for-profit organisatie

• Mesut Yavas

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Economics Fundamental

• Needs, Wants, and Business

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What is a Business?

• An organization that produces or sells goods
  or services to satisfy the needs, wants, and
  demands of consumers for the purpose of
  making a profit.
• Examples

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Goods or Services

• Goods
• Tangible/physical item sold by the
  business.
• (i.e. Plasma TV from Best Buy)
• Services
• Expertise or service provided to the
  customer.
• (i.e. haircut, physician annual check
  up, legal advice, income tax return
  service)
• Goods and Services
• Restaurant (food and service)

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Needs, Wants, and Demands

• Needs
• Things you must have in order to stay alive
• (i.e. warmth in winter, clean water and air,
  food, shelter and medical care.)
• Wants
• The extras
• You dont need them to survive, but they make
  life more pleasant and comfortable
• (i.e. that 62 inch plasma TV)

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Business Terminology

• Consumers
• A general a term to describe anyone who
  purchases something from any business.
• The people who purchase the computers and
  those who have their computer repaired at a
  local repair shop.
• Customers
• The term used by a business to describe those
  consumers who shop at its business.

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Business Terminology

• Producers
• businesses that make goods or provide
  services.
• For example
• A computer manufacturer is a producer of goods
• A computer-repair shop is a provider of a service.

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Business Terminology

• Profit
• The money(income/revenue) that is left after
  all costs and expenses of running the business
  are paid.
• Revenue/income
• The money the business collects from customers
  when it makes a sale. (Price of shoes to the
  customer is 100, not including taxes)
• Expenses
• The expenditures that are involved in running
  the business on a daily basis, such as wages
  and hydro as well as those things that get
  used up such as paper and computer toner.

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Business Terminology

• Costs
• Amount of money required for each stage of
  production. For example the need to purchase
  other items such as
• 1. the cost of the goods a company is selling
  (inventory)
• 2. the cost of the raw materials to used to
  manufacture the good being sold (cotton or
  steel)

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• REVENUE EXPENSES Profit or (Loss)
• Revenue (Price of 1 pair of shoes)
  100
• Less Cost of Shoes 50
• Less Other daily expenses 35
• Profit 15

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What does a Company do when it makes a profit?

• Improve its goods and services and reinvest the
  money back into the business
• Hire more people or give raises or bonuses

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Business TerminologySolvency

• Means having the ability to pay your debts
  and meet your financial obligations.
• A company may not make a profit but be still
  have enough money in the bank to pay of its
  debts and stay in business.
• Insolvency when a company does not have the
  ability to pay off its debt obligations.

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What Impacts Consumer Needs and Wants?

• Personality and personal interests
• Individual abilities
• Individual priorities and values
• Individuals stage of life
• Family responsibilities
• Trends and fads (may be impacted by technology,
  media, businesses, the environment)

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Consumer Trends and Fads

• Trends
• A general direction or change in society that
  lasts a long time 3 years or more
• Fads
• Changes that lead to temporary or short-term
  adjustment - 6 months to a year)

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Consumer Trends

• The 1970s began the trend of more women entering
  the workforce.
• How did this impact changing consumer needs and
  wants?
• demand for convenience food, extended shopping
  and banking hours, convenient house-hold
  appliances, hotels including hair dryers and
  ironing boards.

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Television Trends
Reality TV
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Automobile Trends
MINIVAN (90s)
SUV (2000S)
HYBRID 2010S ??
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Fashion Trends
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Trend Examples

• Trends in Television
• Reality TV, Crime TV shows, Homeshopping network
• Trends in Automobiles
• Mini vans and SUVs
• Fashion Trends
• Jeans

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Toy Fads
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Fashion Fads
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Fad Examples

• Toy Fads
• Pokemon, Cabbage Patch Kids, Furbies, Pogs,
  Skooters, Yoyos, Hula Hoops
• Fashion Fads
• tie dye, fluorescent clothes, knee warmers

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Needs and WantsMaslows Hierarchy of Needs and
Personal Motivation
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Maslows Hierarchy of Needs

• Physiological
• Physical survival needs water, food, sleep,
  warmth, exercise, etc.
• Safety/Security
• Physical safety, economic security, freedom from
  threats
• Social(Belonging)
• Acceptance, be part of a group, indentification
  with a successful team
• Ego (Esteem)
• Important projects, recognition and respect from
  others, prestige and status
• Self-Actualization
• Challenging projects, opportunities for
  innovation and creativity, learning and creating
  at a high level

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Where do Consumers and Producers Meet?

• The Market
• A market exits wherever consumers (buyers) and
  producers (sellers) come together to do business.
• Three Major Groups of Markets
• Consumer Market
• Business-to-Business or Industrial Market
• Stock Market (TBD later in the course)

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Consumer Market

• Made up of all individuals or households who want
  goods and services for personal consumption or
  use.

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Business-to-Business or Industrial Market

• All the individuals and organizations that
  produce, sell, rent, or supply goods and services
  to other businesses.
• For example, cash registers sold to the grocery
  store, delivery vans sold to the flower shop, gas
  to the gas stations, etc.

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Types of Business

• Most business fall into one of the four
  categories
• 1. The Merchandising Business
• 2. The Service Business
• 3. The manufacturing or Producing
  Business
• 4. The Non-Profit Organization

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The Merchandising Business

• Buys goods and resells them at a higher price
  for a profit.
• Examples

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The Service Business

• sells a service to the public
• it does not sell a product as its main
  activity
• usually provides skills or expertise and the
  customer is involved in the delivery of the
  service

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Note

• Sometimes a service company will sell products
  (i.e. hairdresser selling shampoo), but it is a
  sideline and not the main business.
• Sometimes a merchandising business will offer
  services (i.e. computer repair or hemming
  clothes), but it is also just a sideline and not
  the main business.

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The Manufacturing Business

• Buys raw materials, converts them into a product
  and sells these products to earn a profit.
• Consider a construction company, a paper mill, or
  steel plant.

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The Producing Business

• Closely related to manufacturing
• Examples include farms who may produce milk,
  grain, etc. Other examples include oil
  extraction, mining, forestry, hunting, and fishing

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Non-Profit or Not-for-Profit Organization

• An organization that does not seek
  to make a profit, but instead raises
  money/funds for a specific goal.
  (churches, charities, recreational sports
  clubs)
• Examples include Canadian Cancer Foundation,
  Amnesty International, Junior Achievement etc.

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Channels of Distribution

• A business can be classified by how it delivers
  its goods to consumers
• Telephone marketing
• Catalogues
• E-commerce

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Large or Small Business

• Small or medium-sized business (SMB) is a
  business that employs fewer than 500 people.
• Over 1 million SMBs in Canada
• Employ more than 60 of all Canadians
• Local, national, international in scope

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Thank You