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Business Chapter 2
Terms in this set (51)
Businesses that create products used by individuals and other businesses. Includes extractors, and manufacturers
Businesses that take resources from nature
Businesses that get supplies from other producers and convert them into their own product.
Businesses involved in selling the goods and services of producers to consumers and other businesses. Includes retailers and wholesalers
A business that sell products directly to consumers at a place of business.
Intermediary business that sells the products a manufacturer or extractor to a retailer. They also store and transport products
Examples of Producers
Oil refineries, coal and copper mines, farmers, lumber mills
Examples of Intermediaries
Trucking companies, railroads, storage centers, advertising centers, sales offices, and data processing centers.
Businesses that perform activities that are consumed by customers. They provide a service.
Examples of Services Businesses
Doctors, lawyers, accountants, painters, baby sitters, landscapers, dentists, and pet sitters.
Steps all businesses follow to become successful.
1) Generate Ideas
2) Raise Capital
3) Buy Goods and services
4) Employ and train personnel
5) Market Goods and Services
6) Maintain Business Records
BA: Generate Ideas
A business starts with a new idea for a product or service.
BA: Raise Capital
Businesses need to get financial resources so they can get a building and equipment, hire and train employees, obtain licenses, and get other items needed for day to day operations.
BA: Buy Goods and Services
Businesses must buy items to sell in their stores, or items to make their product with, and equipment. They may also need to buy advertising space.
BA: Employ and train Personnel
The most important resource for a business is people.
BA: Market Goods and Services
Without marketing people won't know about your product or feel like they should buy it, resulting in a loss of profit on the companies end.
BA: Maintain Business Records
Without financial records owners have no way of knowing what shape their company is in, or if they need to change something.
A business owned and operate by one person. Most businesses are this. The owner keeps all the profit but is responsible for all debts.
A business owned and managed by two or more people who are in an agreement. More knowledge about different things and more money to invest into the company. They have unlimited liability
A business owned by a number of people and operated under written permission from the state. Difficult to start and face more more rules and regulations. Owned by stockholders. Advantages: More money can be raised as more people purchase stocks, and limited liability. Dis: Double taxes
A written contract granting permission to a business person to sell someone else's product or service. The franchisee must do everything the way the contract is written out. They can be operated as any of the three main business ways.
A business owned by the members it serves and managed in their interests. Two types : Consumers' cooperative and Producers' cooperative. Very similar to a Corporation.
Consumers buy goods and services together at lower prices than each person could buy individually. They share the profits
Usually a farm organization. Gives the producers greater bargaining power in selling their products and allows them to be more competitive in the marketplace.
Corporations that are created for social, political, charitable educational and etc. type things. Don't receive corporation taxes. Only money they get that they use for themselves is to keep the business going.
Nonprofit corporation that can operate like a city but is not governed under a charter granted by the state. No stock is issued and revenues are from taxes rather than profit.
An agreement between two or more companies to share a business project. Shares profit and control.
No double taxes.
Limited Liability Company
Combines the best features of corporation and partnership. It protects your personal assets if the business fails.
Manage a Successful Business
Plan, organize, staff, lead, and control.
The process of thinking, gathering, and analyzing information and making decisions about the business. Some mangers spend too much time on day to day operations and not enough time on this.
The process of determining what work has to be done and who is to do it.
Includes the many activities involved in finding. selecting, hiring, training and evaluating employees
Directing employees in their work so they perform their tasks correctly and in a timely manner
managers pr supervisors compare what has been accomplished with what was planned. Directly related to planning
The plan that a company develops to show how it will use marketing to achieve its goals
A group of individuals or businesses that has similar products needs
Involves a blend of four elements: product, distribution, price, and promotion.
Businesses that consider the needs of customers when developing products and services.
Channel of Distribution
The path that a product travels as it goes from producer to consumer. Two basic channels: direct and indirect
Brings the product to the consumer directly from the producer.
Consists of one or more businesses that come between the producer and the consumer. 1 business: Retailer. 2 businesses: Wholesaler and then retailer
7FM: Product/Service Managment
Marketers assist with the design, development , maintenance, improvement, and acquisition of products and services that meet consumer needs. Information and test results related to a new product or service are gathered and utilized.
Involves giving careful consideration to such things as shipping, handling, and storing products and getting them to their location on time.
Communicating with potential customers to learn what they need and want. Direct sales is when a salesperson meets face to face with a customer. Indirect is when it is sold without people talking, like online or over the phone.
7FM: marketing-Information Management
Getting important information about the target market and customer needs. Helps make better decisions
7FM: Financial Analyis
A business may offer financing options for its customers and assist them in handling payments. Also making sure a business is within the budget and that they an continue to operate.
Setting a fair price that isn't too high or too low, covers the costs and makes a profit, and is competitive to hurt other businesses with similar products or services.
Putting the business out there so people know about it and why they should go to it. Advertising and other methods to compete with competitors.
The amount that is added to the cost of producing a product or service.
Selling Price: Add cost and markup
Markup rate: Markup divided by cost
Markup: Selling price - Cost
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