understanding business (BS N5)

• Business organisation

  An organisation that makes, buys or sells goods or provides a service
• Small businesses

  • Family-owned enterprises that cater to the immediate community
  • Play a vital role in providing essential goods and services to their local customers and contributing to the community's economy
• Multinational companies

  • Operate across multiple countries and have a global presence
  • Often employ thousands of people and have a significant impact on the global economy
• Larger businesses


  Often have different departments that handle specific functions of the business, including finance, marketing, operations, and human resources
• Smaller businesses

  The owner or a small team still needs to handle various functions to ensure the success of the business, including managing finances, marketing, operations, and taking care of employees
• Types of business

  • Sole traders
  • Partnerships
  • Companies
• Profit

  Allows businesses to grow, invest in new opportunities, and provide a return to their owners or shareholders
• Businesses with different goals

  • Charities
  • Social enterprises
  • Not-for-profit organisations
• Public sector organisations

  • Government departments
  • Schools
  • Hospitals
• Goods

  Physical, tangible items that you can see and touch, typically produced and then sold to customers
• Services

  Intangible goods, actions or tasks performed by individuals or businesses to meet the needs of customers
• Factors of production

  • Land
  • Labour
  • Capital
  • Enterprise
• Some businesses may be more dependent on one of the factors of production compared with the others
• Wealth creation

  The process by which value is added to a product at each stage of its production
• Wealth creation process

  1. Raw materials

  2. Construction

  3. Finishing and furnishing

  4. Market value
• Sectors of industry

  • Primary sector
  • Secondary sector
  • Tertiary sector
• Sectors of the economy

  • Private sector
  • Public sector
  • Third sector
• Needs

  Essential requirements for survival and well-being
• Wants

  Desires and preferences that go beyond our basic needs
• Consumer

  An individual or a group of individuals who purchase or use goods and services to fulfil their needs and wants
• Consumer satisfaction

  A measure of how well a product or service meets a consumer's needs or wants and contributes to their overall happiness and contentment
• Types of customer service

  • In-person
  • Phone-based
  • Email
  • Live chat
  • Social media
  • FAQs
  • Technical support
  • After-sales support
• Benefits of good customer service

  • Ensures customer satisfaction and increases customer loyalty
  • Leads to positive word-of-mouth referrals and new customers
  • Helps keep existing customers engaged and prevents them from switching to competitors
  • Builds a positive reputation and strong brand image
  • Contributes to employee satisfaction and morale
• Risks of poor customer service

  • Leads to negative experiences, dissatisfaction, frustration, and loss of trust in the business
  • Drives customers away, resulting in decreased customer loyalty and customers switching to competitors
  • Damages the business's reputation and brand image
• If customers have a positive experience with customer service

  They are more likely to share their experiences with others, leading to positive word-of-mouth referrals and new customers
• By addressing customer needs, resolving issues promptly, and providing a positive experience

  Businesses can keep their existing customers engaged and prevent them from switching to competitors
• Providing good customer service

  Can help build a positive reputation in the market
• Providing good customer service

  Helps differentiate a product from its competitors and creates a strong brand image associated with quality service
• Good customer service practices

  Contribute to employee satisfaction and morale
• When employees feel empowered to assist customers and witness positive outcomes

  It enhances their job satisfaction and motivation
• Poor customer service


  Can lead to negative experiences for customers
• Negative experiences for customers

  Can result in dissatisfaction, frustration, and disappointment, leading to a loss of trust in the business
• Lack of assistance, unaddressed concerns, and unresponsive support

  Can drive customers away, resulting in decreased customer loyalty and customers switching to competitors
• Dissatisfied customers

  Are more likely to share their dissatisfaction with others
• Negative word-of-mouth

  Can damage the business's reputation, leading to a loss of potential customers
• Negative impact of poor customer service on customer satisfaction, loyalty, and retention


  Can ultimately lead to declining sales and revenue for the business
• As customers leave and potential customers are deterred

  The business may experience a significant financial impact, with profits likely to be reduced and the business may even make losses
• Consistently poor customer service

  Can damage a business's brand image and credibility
• Customers may perceive the business as untrustworthy, unreliable, or uncaring

  Leading to a tarnished reputation in the market
• Tarnished reputation in the market

  May make it more challenging and expensive for the business to attract new customers