What is Business?

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What is Business?
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Business

• A business is 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
• Business also can be described by its type of
  ownership, the goods produced or services
  offered, the types of jobs provided, or the
  functions it performs in a community

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Entrepreneurs

• People who take calculates risks and start a
  business to solve a problem or take an advantage
  of an opportunity are called entrepreneurs
• Recognize that unsatisfied needs and wants of
  consumers is an opportunity for a business
  opportunity
• People need businesses for employment
  opportunities businesses need people to shop
  with the money they make from employment

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Needs

• Needs would be defined as goods or services that
  are required.
• This would include the needs for food, clothing,
  shelter, health care.

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Wants

• Wants are goods or services that are not
  necessary for survival yet we desire or wish to
  own or take advantage of them.
• For example, a people need clothes but may not
  need designer clothes.
• People do not need toys, entertainment, or cars.
• People need food but do not have to have steak or
  dessert.

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Wants

• An important part of the economics is the
  distribution of resources or goods so that
  people's needs are met.
• This is especially true in times of scarcity when
  there are not enough resources, goods or
  services.
• Many times advertisers try to appeal to consumers
  in such a way that the consumers feel they need
  certain goods or services when in fact they only
  want them.

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Goods

• Most goods have a monetary value (dollars and
  cents)
• Value of goods change over time
• All goods are tangible, meaning these goods are
  produce and can be seen and touched

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Services

• Services also have a monetary value because
  people are willing to pay for them
• Example Round of Golf, Dentist visit
• Services are intangible because they do not
  result in a product you can touch
• Services can be free such as the work performed
  by volunteers from not-for-profit organizations

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Essential and Luxery Goods and Services

• Essential goods (food, clothing, shelter) and
  essential services (heat, water, and electricity)
  are needed for survival
• Luxury goods (swimming pools, home entertainment
  centres) and luxury services (limo service, spa
  visit) are not necessary for survival

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Maslows Hierarchy of Needs
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Maslows Hierarchy of Needs

• The basis of Maslow's theory is that human beings
  are motivated by unsatisfied needs.
• Certain lower needs must be satisfied before
  higher needs can be satisfied.
• As long as we are motivated to satisfy these
  cravings, we are moving towards growth, toward
  self-actualization.

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Maslows Hierarchy of Needs

• Physiological Needs
• Needs required to sustain life, such as
• Air
• Water
• Food
• Sleep

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Maslows Hierarchy of Needs

• According to Maslow's theory, if these
  fundamental needs are not satisfied then one will
  surely be motivated to satisfy them.
• Higher needs such as social needs and esteem are
  not recognized until one satisfies the needs
  basic to existence.

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Maslows Hierarchy of Needs

• Safety Needs
• Once physiological needs are met, one's attention
  turns to safety and security in order to be free
  from the threat of physical and emotional harm.
• Such needs might be fulfilled by
• Living in a safe area
• Medical insurance
• Job security
• Financial reserves
• If a person feels threatened, needs further up
  the pyramid will not receive attention until that
  need has been resolved.

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Maslows Hierarchy of Needs

• Social Needs
• Once a person has met the lower level
  physiological and safety needs, higher level
  needs awaken.
• The first level of higher level needs are social
  needs.
• Social needs are those related to interaction
  with others and may include
• Friendship
• Belonging to a group
• Giving and receiving love

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Maslows Hierarchy of Needs

• Esteem Needs
• Once a person feels a sense of "belonging", the
  need to feel important arises.
• Esteem needs may be classified as internal or
  external.
• Internal esteem needs are those related to
  self-esteem such as self respect and achievement.

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Maslows Hierarchy of Needs

• Esteem Needs
• External esteem needs are those such as social
  status and recognition.
• Some esteem needs are
• Self-respect
• Achievement
• Attention
• Recognition
• Reputation

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Maslows Hierarchy of Needs

• Esteem Needs
• Maslow later refined his model to include a level
  between esteem needs and self-actualization
• the need for knowledge and aesthetics

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Maslows Hierarchy of Needs

• Self-Actualization Needs
• Self-actualization is the summit of Maslow's
  hierarchy of needs.
• It is the quest of reaching one's full potential
  as a person.
• Unlike lower level needs, this need is never
  fully satisfied as one grows psychologically
  there are always new opportunities to continue to
  grow.

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Maslows Hierarchy of Needs

• Self-Actualization Needs
• Self-actualized people tend to have needs such
  as
• Truth
• Justice
• Wisdom
• Meaning

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Maslows Hierarchy of Needs

• Self-Actualization Needs
• Self-actualized persons have frequent occurrences
  of peak experiences, which are energized moments
  of profound happiness and harmony.
• According to Maslow, only a small percentage of
  the population reaches the level of
  self-actualization.

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Economic Resources

• Products and services dont just appear
• Goods must be manufactured from basic components
  services require skills and effort
• Economic resources (factors of production) are
  the means which goods and services are made
  available to consumers

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Economic Resources

• Natural resources are those raw materials that
  come from the earth, water, and air such as oil,
  fish, and agricultural products
• Natural resources are renewable and
  non-renewable
• Human resources (also referred to as labour) are
  the people who work to create goods and services
  (farmers, factory workers, teachers, web
  designers)
• Capital resources include money, buildings,
  equipment, tools, trucks, and factories and
  usually last for a long period of time and often
  require a substantial investment on the part of
  the business.

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Producers and Consumers

• Producers are those that manufacture the product,
  while those that repair computers provide a
  service.
• Consumers are the people who buy products and
  services. The more people that can be found to
  buy products equals greater profits for companies
• People can be both producers and consumers of the
  same product