Unit 1 - Business Fundamentals Introduction to Business Terminology
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. • A business has two purposes: • 1. To make MONEY • 2. To provide goods and services to satisfy consumer wants and needs • “I feel that luck is preparation meeting opportunity” • ~ Oprah Winfrey
Profit or Non-profit? • For Profit Organizations: • produces or sell goods and services to satisfy the needs, wants, and demands of consumers for the purpose of a making MONEY
For-profit Business • By supplying goods and services, a business can make a profit • Profit is the income left after all costs and expenses are paid. • Expenses are the payments involved in running a business and the assets that get “used up” operating it. • Cost is the money required to produce or provide the goods and services. Revenue – Expenses = Profit (or Loss)
Goods and Services • Goods: items of monetary value that have been produced • Television, Shoes • Services:tasks performed by businesses for consumers • Lawn Mowing, Spa Businesses can sell both goods and services. • Goods are TANGIBLE • can touch them • Services are INTANGIBLE • can’t touch them
Goods or Services? • Businesses that sell goods • Businesses that provide services • Businesses that do both
WHAT IS NOT-FOR-PROFIT? Not-for-profit Organization: uses any surplus funds to improve the services offered to its members. These businesses do not distribute profits to members.