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what is business

A detailed overview of what makes up "business" in today's society.
by

Sydnee Adams

on 15 April 2010

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Transcript of what is business

Double click anywhere & add an idea Economics is the study of how people choose to use their scarce resources to meet their competing desires. Resources include money, property, and time. A resource is considered scarce when people cannot obtain as much of it as they would choose if the resource were free. Scarcity forces people to make choices about how best to use their resources.
For example a factory owner chooses whether to expand production by hiring more workers or purchasing more machinery. Entrepreneurship is the act of being an entrepreneur , which is a French word meaning "one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods. This may result in new organizations or may be part of revitalizing mature organizations in response to a perceived opportunity.

The most obvious form of entrepreneurship is that of starting new businesses; however, in recent years, the term has been extended to include social and political forms of entrepreneurial activity. When entrepreneurship is describing activities within a firm or large organization it is referred to as intra-preneurship and may include corporate venturing, when large entities spin-off organizations.


Business Planning:
“A company’s managers should begin by asking themselves if their company is ready for tomorrow today?” This was a quote made by the CEO of Coca-Cola when making a speech before his executive board in their January 2010 board meeting. This was to inform his workers that, when running a business, you must always plan for the future. You must consider just about every possible situation and use that as the foundation of your business plan.
Marketing is the process by which sellers and buyers find each other and by which goods and services move from producers to consumers.
It is responsible for the large variety of products, that are available to consumers in most countries around the world.
Marketing may account for approximately half the cost of a product or service.
Marketing activities include: market research, product development, distribution, pricing, and promotion.
Market research is the study of the probable users of a product or service. (potential customers are known as a market)
Surveys are effect to determine what customers need and want.
Some companies or firms observe what customers buy to learn about their habits.
Government statistics about population and income can indicate the size of a market and its purchasing power.
Since the ‘90’s, businesses have used the internet to sell nearly every type of product.
Marketing over the internet generates more detailed information about customer interest and buying behavior than ever before.
Some believe that internet marketing is unreliable and that it puts customer’s privacy at risk.

Product Development includes the design, creation, and modification of production and services, usually based on market research.
Firms continually introduce new products, modify existing ones, and drop unprofitable products to meet the demands of the public.


Distribution is the movement of goods and services from the producers to the consumers.
Manufacturers create systems, or channels, of distribution to keep good moving,
The participants of a channel include wholesalers and retailers.
Wholesalers sell large quantities of goods to retailers.
Retailers sell goods in smaller quantities to consumers.
Wholesalers may sell to a number of different retailers.
Marketing channels may involve other companies that produce such services as financing, transportation, and storage.
The internet has created electronic alternatives to some of the traditional physical channels of distribution.
Many internet marketers and/or wholesalers sell directly to the public, lessening the need for local retailing.


If an item’s price is too high, it will not sell. If an item’s price is too low, the producers will not earn a profit. The pricing function must balance these extremes.
When setting the price of an item, many manufacturers start with its unit production cost, the expense of making one unit of the item. They then add a percentage of this cost, called a markup, to provide a profit for themselves.
Every other firm in the channel of distribution also adds a markup to cover expenses and to provide a profit.
The final selling price is the unit production cost plus the total of all the markups.
Other manufacturers try to determine what an item’s price should be through market research.

Promotion includes advertising, coupons, direct mailing, in-store displays, web pages, telemarketing calls and personal sales efforts.
Companies engage in a wide range of promotional activities designed to inform customers about products and services and to persuade them to buy.
Accounting is a system of gathering, summarizing, and communicating financial information for a business firm, government, and other organization.
Also known as accountancy, it enables decision makers to interpret financial information and use the results in planning of the future.
Business people often refer to accounting as the “language of business” because they accounting data in communicating a firm’s activities.
Charities, churches, colleges, government agencies, and other nonprofit organizations also use accounting to keep track of their finances.
Accounting is very close to a record keeping process known as bookkeeping

Fields of Accounting:
Financial
Management
Tax
Auditing
Management Consulting Services
Financial Accounting-involves the preparation of a business's financial statements, mainly for users outside the business. These reports are used by owners and potential owners of a business and by people who have loaned a company money. Some government agencies that regulate business and the stock market require companies to submit financial statements to them.

Management Accounting-helps managers plan and control a company's operations. Accountants prepare budgets to express management's goals in financial terms. After a budget has been adopted, performance reports compare actual results with the budget. Cost accountants help management keep track of how much it costs a company to make the product, or provide the service, it sells.

Tax Accounting-consists of preparing tax returns for organizations or individuals and determining the taxes involved in proposed business transactions. Tax accountants suggest ways to save money on taxes. They must have a thorough knowledge of the tax laws that affect their clients or employers. They also must know the details of court rulings in a wide variety of tax cases.

Auditing-involves the examination of an organization's financial statements and records. Auditors from outside the organization ensure that the organization's financial statements present information fairly and that they follow generally accepted accounting principles. People use such statements in deciding which companies to invest in and lend money to.

Management Consulting Services-consist of a variety of activities that many accountants perform. These services include the design and installation of computerized financial information systems, assistance in setting up employee pension plans, and the planning of an individual's personal finances.
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