Business Cheat sheet
Unit 1:
1.1 What is a Business:
An organization that produces/sells goods/services to satisfy the needs, wants, demands of consumers
Profit or non-profit:
A business that produces or sells goods/services to satisfy the needs/wants, of consumers for the purpose of making
Not-for-profit organizations
an organization that does not seek to make a profit from the operations of its business
Demand and supply
the quantity of goods or services that consumers are willing and able to buy at a particular Price
Law of Demand
Usually consumers will increase the demand of a good or service as price decreases
Demand ↑ as the price↓ (ie. inverse relationship)
Factors That Affect Demand
1. Change in consumer income
2. Change in consumers’ tastes
3. Changes in what we expect in the future
4. Change in population
5. Price or related goods (substitutes or complimentary goods)
Supply:
the quantity of goods or service that businesses/producers are willing and able to provide at a particular price.
law of Supply
Usually businesses/producers will increase the quantity of goods they supply as price increases
supply↑ as the price ↑ (Ie. direct relationship)
Factor the Affect Supply
1.Change in the number of products
2.Price of related goods (ex. if gas prices increase, people may buy more energy efficient cars)
3.Change in technology
4.Change in cost of production (ie. price of resources)
5.Taxes and subsidies
1.2 Types of business
Sole Proprietorship
A sole proprietorship is a business owned by one person.
he owner has unlimited liability, if the business does poorly the owner is responsible for covering all the losses, and any unpaid loans.
Partnership
a business with two or more partners who share the responsibilities and profits/losses. Sharing between partners does NOT have to be equal. If one partner contributes more money (“capital”) to help start the business, that person should be entitled to receive a portion of the profits/losses
Franchise:
In a franchise business, the original owner called the Franchiser, licenses the rights and permissions to another person , called the Franchisee.
Corporation
An organization that is owned by individual shareholders. Each owner must purchase some amount of “shares” using their own money.
Cooperative (Co-op):
A business owned by the people, or members, who buy the products or use the services that the business offers.
1.3 Business success
profit
A business makes a profit by selling its goods and services for more than the expenses required to produce and sell them
profit = revenue – expenses
Expenses:
VARIABLE EXPENSES
Expenses that Change depending on the number of items produced
FIXED EXPENSES
Expenses that do not change regardless of how many items produced
SOCIAL RESPONSIBILITY
Corporate Social responsibility (CSR) is a concept where organizations integrate social_and environmental concerns in their business operations and interactions with their stakeholders
1.3…
EMPLOYEE SATISFACTION
It is very expensive to train employees and businesses have a better chance of success if their employees are happyWays business can ensure that employees are satisfied include:
-Good salaries
-Medical benefits
-Employee discounts
-Excellent vacation packages
CUSTOMER SATISFACTION
In today’s competitive business environment, it’s increasing important to keep your customers satisfied. If not, what’s to stop them from switching to your competition. Nowadays companies are doing more than ever to increase customers satisfaction so they can build and sustain customer loyalty.
BUSINESS & PROFIT
As mentioned earlier, for-profit businesses will often measure profit as the number one measure of success. In a competitive marketplace businesses who want to make a profit must decide on.
FACTORS AFFECTING BUSINESS SUCCESS
Business success is never a matter of luck or accident. Success depends on several things. Some of the following are common characteristics that lead to business success.
1.4 Ethics and CSR
VALUES
the rules by which we make decisions about RIGHT and WRONG , should and shouldn’t, GOOD and BAD
MORALS
refer to an individual’s own PRINCIPLES regarding RIGHT and WRONG.
ETHICS
refer to right and wrong conduct/behavior of an individual or group in a particular situation
dictate what practical behaviors are allowed
BUSINESS ETHICS:
Are the MORALS principles that act as GUIDELINES for the way a business CONDUCTS itself and its transactions.
A Code of Ethics
Some companies write a CODE OF ETHICS, a DOCUMENT that explains specifically how EMPLOYEES should respond in certain situations.
Canadian LAWS address ACCEPTABLE business behaviors. However, businesses can still behave UNETHICALLY without breaking these laws.
Ie. What is ILLEGAL is unethical but not all UNETHICAL behavior is illegal
Fraud
Is a crime of LYING or PRETENDING. Some businesses MISLEAD consumers and TRICK them to buy their products or services.
IDENTITY THEIF – using another person’s personal information without their permission
MONEY LAUNDERIN – hiding the origins of money obtained illegally by passing through
banking transactions and legitimate businesses
EMAIL/WEBSITE SCAMS- “phishing” is using a disguised email/website to trick recipient the email is something they want/need
Accounting Scandal
occurs when accountants or senior executives ALTER accounting records for PERSONAL benefit.
Insider trading
is buying or selling SHARES of a company based on CONFIDENTIALinformation. This type of trading is illegal.
Anti-Discrimination and Harassment
DISCRIMINATION – is denying a qualified individual an interview, job, or promotion based on his or her religion, gender, sexual orientation, or physical disabilities.
GENDER DISCRIMINATION is treating an employee differently based on their sex (male or female).
Fair Trade
Trading between companies in DEVELOPED countries and PRODUCERS in developing countries.