Business Basics
What is a Business?
A business is any organisation that makes goods or provides services.
Goods are physical products such as burgers or cars.
Services are non-physical items such as hairdressing.
Customer needs are the wants and desires of buyers.
Businesses buy raw materials from suppliers and sell to the customer. The person who uses this product is the consumer.
Businesses sell to customers in markets. A market is any place where buyers and sellers meet to trade products - this can be a high street shop or a website.
Competitors are businesses who provide a similar product or service so share the same customers.
A business always adds extra money to the product after all costs have been taken into account this forms the profit.
The three types of industry are:
Goods are physical products such as burgers or cars.
Services are non-physical items such as hairdressing.
Customer needs are the wants and desires of buyers.
Businesses buy raw materials from suppliers and sell to the customer. The person who uses this product is the consumer.
Businesses sell to customers in markets. A market is any place where buyers and sellers meet to trade products - this can be a high street shop or a website.
Competitors are businesses who provide a similar product or service so share the same customers.
A business always adds extra money to the product after all costs have been taken into account this forms the profit.
The three types of industry are:
- Primary production: this involves acquiring raw materials. For example, metals and coal have to be mined, oil drilled from the ground, rubber tapped from trees, foodstuffs farmed and fish trawled. This is sometimes known as extractive production.
- Secondary production: this is the manufacturing and assembly process. It involves converting raw materials into components, for example, making plastics from oil. It also involves assembling the product, eg building houses, bridges and roads.
- Tertiary production: this refers to the commercial services that support the production and distribution process, eg insurance, transport, advertising, warehousing and other services such as teaching and health care.