intro to business management

• Business


  An organization that provides goods and services satisfying the needs and wants in a profitable or non-profitable way
• Input-Output Model


  Explains how businesses work:

  Inputs (factors of production: land, labor, capital, entrepreneurship) -> Processes (adding value through manufacturing or services) -> Outputs (goods or services)
• Factors of Production


  • Land
  • Labor
  • Capital
  • Entrepreneurship
• Capital-intensive production


  Production that relies heavily on machinery
• Labor-intensive production


  Production that relies heavily on labor
• Producer goods/services


  Goods/services sold to businesses (B2B)
• Consumer goods/services


  Goods/services sold to individuals (B2C)
• Business Functions


  • Human Resource Management
  • Finance and Accounts
  • Marketing
  • Operations Management
• All business functions are equally important and should work together towards the same goal
• Economic Sector


  A category of businesses within an economy involved in similar activities
• Economic Sectors


  • Primary (extracting raw materials)
  • Secondary (manufacturing)
  • Tertiary (services)
  • Quaternary (knowledge-based services)
• Chain of Production


  The route a product takes from raw materials to finished consumer goods
• Tertiary sector activity


  Selling consumer goods in retail stores
• Chain of production


  Raw materials transformed into finished consumer goods on supermarket shelves
• Primary sector


  Businesses that harvest crops
• Secondary sector


  Businesses that transform crops into products like bread
• Tertiary sector


  Businesses that sell products to consumers
• Economies go through stages of development over time, called Clark's sector model
• De-industrialization


  Period when the importance of the secondary sector decreases
• As people get wealthier, the tertiary and quaternary sectors tend to increase in importance
• Quaternary sector


  Sector involving IT, data, and knowledge
• Measuring sector importance


  By employment numbers or contribution to GDP
• Types of economies


  • Low income/less developed (primary sector dominates)
  • Middle income/developing (secondary sector dominates)
  • High income/developed (tertiary and quaternary sectors dominate)
• Characteristics of different economy types: less developed have low-skilled workforce and low incomes, developing have low labor costs, developed have high labor costs
• Entrepreneur


  Person with the skill set to combine factors of production and start a business
• Intrapreneur


  Person similar to an entrepreneur but works within a company
• Reasons to start a business

  • Financial rewards
  • Innovation/doing something new
  • Work-life balance
  • Identifying market gaps
  • Independence
  • Sense of responsibility
  • Commercializing personal interests
• Process of starting a business

  1. Have a business idea

  2. Write a business plan

  3. Choose a business identity

  4. Seek finance

  5. Start trading
• Business plan


  Document outlining potential business development, including idea, vision/mission, goals, and plans for the 4 business functions
• Business plans often include sustainability and corporate social responsibility
• Pitching


  Presenting the business plan to potential investors or shareholders
• Challenges for startups


  • Lack of finance
  • Lack of business management skills
  • Recruitment issues
  • Lack of expertise
  • Intense competition