Nature of Business Topic Notes

iThe Nature Of Business: TOPIC 1 Business | The organized effort of individuals to produce and sell goods for a profit that satisfies individuals needs and wants | Product | Is a good or service that can be bought or sold | Goods | Are items that can be seen and touched. | Services | Are things done for you by others | Finished product | Is something that is ready for customers to buy and use | Production | Are activities that are undertaken by the business. They combine resorsed to create products that satisfy the customers needs and wants | Revenue | Is the money the business receives as payment for its products | Operating expenses | Are all the costs of a running business except the costs of the goods sold. | Profit | Is what remains after all the business expences have been deducted from sales revenue | Risk | Referse to the possibility of loss | Income | Money received by a person for providing his/her labour e.c.t. | Wage | Is money received by workers usually on a weekly basis, for services they provide to the business | Salary | Is a FIXED amount od money paid on a regular basis to a permanent employee of a business | Shareholders | Are people who are PART owners of a company because they own a number of shares | Dividends | Is part of a business’s profit that is among shareholders | Innovation | Is an IMPROVEMENT on something already established | Invention | NEW DEVELOPMENT of something | Choice | The act of selecting among alternatives | Entrepreneur | Is someone who starts, operates and assumes the risk of a business venture in the hope of making a profit | Quality of life | Refers to the overall wellbeing of an indervidual, and is a combination of both material and non-material benefits | Market share | Refers to the business’s share of the total industry sales for a particular product | Transnational (multinational) corporation | Is a company that has branches in many different countries | Micro business