What is Business Activity?

• A business is an organisation that provides goods/services.
• Some businesses produce products for customers - these are called?

  Consumer Goods.
• Products that are made by a business for another business are called?

  Producer Goods.
• Examples of consumer goods:

  • Smartphone
  • Magazine
  • Handbag
• Examples of consumer services:

  • Health care
  • Banking
  • Air Travel
• Examples of Producer goods:

  • Delivery van
  • Office furniture
  • Tools
• Examples of producer services:

  • Market research
  • Insurance
  • Web Design
• organisation → group, such as a club or business, that has formed for a particular purpose.
• Goods → physical products, such as mobile phones etc.
• Services → non-physical products, such as banking or a haircut.
• Businesses have to satisfy people’s wants and needs.
• wants → people’s desires for goods and services.
• needs → basic requirement for survival.
• private sector → business organisations owned by individuals or groups of individuals.
• Public sector → business organisation owned by central or local government.
• Any individual or group that has taken an interest in the operation of a business is called a stakeholder.
• stakeholder → an individual with an interest in the operation of a business.
• Owners

  Often called entrepreneurs, they are responsible for setting up and running the business.
• Customers

  Customers buy the goods and services that businesses sell, most customers are called consumers.
• Employees

  Employees work for the business. They depend on a business for their salary. However, they have other needs. They will require training so that they can do their work properly.
• Managers

  Managers help run a business, they are often employed to lead teams, solve problems and settle disputes and motivate workers.
• Suppliers

  Businesses that provide raw materials, parts, commercial services and utilities. Relations between a business and their supplier must be good because they rely on eachother.
• Financiers

  Financiers lend money to a business, they may be banks etc. These stakeholders have a financial interest in the business and will be
• Local Community

  Most businesses are likely to have an impact on the local community. They may employ people, if a business does well then the community will benefit, more jobs, more overtime and higher pay. Businesses will also be criticised for if the business has a noisy factory.
• Government

  The government has an interest in all businesses. They provide employment, generate wealth, and pay taxes. Taxes from businesses and their emplyees are used to finance government spending.
• entrepreneur → person who takes risks and sets up businesses, an individual who organises the other factors of production and risks their own money in a business venture.
• All businesses operate in a changing environment , this means that they may be affected by the external factors that are likely to change over time.