Why Businesses Exist :: Business and Management Studies

Why Businesses ExistA argumentation gets started when somebody decide that they can earn aprofit by making a heavy or providing a service and selling it to tidy sum who are exiting to pay for it.All Businesses have the same Main ObjectiveAn objective is anything that the ancestry wants to achieve. The mostimportant objective is to make a profit in order to survive. If abusiness does not make a profit it will go bankrupt and have toclosedown.The Public SectorOwned by the Government Army, Police, Schools and Hospitals. Theseare benefits for everyone.The Private SectorOwned by Private Individuals. Of take in to the people who own them.Key TermsEntrepreneurship means being prepared to take risks and having theflair and skills needed to set up and run a business or otherorganization.Sole Owner is an individual who runs a business and is personallyresponsible for any losses incurred.A Limited Company is an organisation, which gives its owners orshareholders protection so that they can lose only the money that theyhave already put in.Innovation is the introduction of the new ideas. It may affectproducts or the way in which they are made.Developing Relationships is Architecture with customers, employees &businesses. Businesses, which look carefully at the way it works withcustomers, employees, and other businesses are more likely to besuccessful. Reputation A reputation of a company can be achieved throughdeveloping a particular image Low Prices Appealing to the exuberant Ensuring top qualityCompetitive Advantage Is a distinctive feature that makes a businesssuccessful. A business must carefully identify the people who will buythe product to gain an competitive advantage over others.A Market Is any location or process that brings buyers and sellers together.Price is the summate of money that is given in exchange for a product.Goods are anything you buy which are natural or manufactured for a products.Services involve purchase the skills o another person. make headway is the difference between the price and the cost of making a product available.RewardRevenue Cost = ProfitProfit is the difference between a firms revenues from its tradingactivities and its total costs. It is a reward for the risk and areturn on capital invested. in that location are 3 factors of production Land Capital LabourEntrepreneurs use these 3 factors to make a profit.Sole TradersCompanyLegal-----No sub judice formalities.A legal structure with a separate identity from those who run it.