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What businesses do
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Business is all around you: the shop on the corner, the app on your phone, the bus you catch. This starter sets out the basic ideas the whole course builds on.
Goods and services
A business is an organisation that provides goods or services to customers.
Goods are physical products you can touch: a phone, a sandwich, a bike.
Services are things done for you: a haircut, a bus journey, a bank account.
Goods are physical products you can touch: a phone, a sandwich, a bike.
Services are things done for you: a haircut, a bus journey, a bank account.
Inputs to outputs
Businesses take inputs and turn them into outputs that customers want.
A bakery uses flour, ovens, staff and the owner's ideas (inputs) to make bread (output).
If customers value the output more than it cost to make, the business can make a profit.
A bakery uses flour, ovens, staff and the owner's ideas (inputs) to make bread (output).
If customers value the output more than it cost to make, the business can make a profit.
Why businesses exist
Most businesses aim to make a profit for their owners.
Some are not-for-profit: charities and social enterprises put a cause first, such as helping people or the environment, and reinvest any surplus.
Every business has customers (who buy), suppliers (who sell it materials) and owners.
Some are not-for-profit: charities and social enterprises put a cause first, such as helping people or the environment, and reinvest any surplus.
Every business has customers (who buy), suppliers (who sell it materials) and owners.
A window cleaner buys ladders and buckets, then cleans 20 houses a week. Does the business sell a good or a service, and who are its suppliers?
- The customer does not receive a physical product to keep: the windows are cleaned for them.
- Suppliers are the businesses that sell the ladders and buckets.
Answer: A service; its suppliers are the businesses selling ladders, buckets and cleaning materials
Businesses provide goods (physical) or services (done for you). They turn inputs into outputs customers value. Most aim for profit; charities and social enterprises put a cause first.
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