Why Businesses Exist
- Created by: BethMariiee
- Created on: 05-05-16 11:30
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- Why Businesses Exist
- Businesses Supply Goods or Services
- Businesses sell products to customers who are willing to pay for them.
- Products can be goods or services
- Goods are physical items like books or furniture
- Services are actions performed by other people to aid the customer, e.g. hairdressers and plumbers
- Products can be goods or services
- Products can be a necessity or a luxury
- Necessities are goods or services that you need like gas and electricity
- Luxury goods or services are things you want but don't need like holidays and jewelery
- Businesses sell products to customers who are willing to pay for them.
- Advantages to Owning a Business
- People set up businesses to make a profit.
- Profit is where the business makes more money than it spends
- Starting a business is risky, but many people take the risk because of the possibility of big financial rewards
- People usually set up their own business if they expect to make more than they could working for another company
- People may set up their own business so that they can be their own boss and make their own decisions
- Setting up your own business gives you the opportunity to do a job you're really interested in
- People set up businesses to make a profit.
- Most Businesses Need to Make a Profit
- Businesses have to make a profit of break even to survive
- This is especially true in the private sector.
- If a business doesn't make enough money to survive it could go bankrupt and have to close down
- This is especially true in the private sector.
- In the public sector, it's not as clear-cut.
- Organisations like the army, police, hospitals and state schools aren't there to make money - they provide a service to the community
- Non-profit businesses, e.g. charities, have social or ethical aims, rather than financial ones
- Businesses have to make a profit of break even to survive
- Businesses can have Other Aims
- As well as making profit, businesses may have other aims.
- To offer the highest quality goods and services possible
- To give excellent customer service
- To have a great image and reputation
- To develop new products ahead of competitors
- To offer a diverse range of goods or services
- To become fully sustainable or minimise environmental impact
- To invest in the local community or social projects
- Businesses set specific objectives to help them meet their aims
- As well as making profit, businesses may have other aims.
- Businesses Supply Goods or Services
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