Why Businesses Exist :: Business and Management Studies

Why Businesses ExistA communication channel gets started when mortal decide that they can earn aprofit by fashioning a good or providing a service and selling it to hatful who are willing to pay for it.All Businesses acquit the same primary(prenominal) ObjectiveAn objective is boththing that the business wants to achieve. The mostimportant objective is to shuffle a profit in order to survive. If abusiness does non make a profit it will go bankrupt and eat toclosed aver.The Public SectorOwned by the Government Army, Police, Schools and Hospitals. Theseare benefits for everyone.The clandestine SectorOwned by Private Individuals. Of Benefit to the people who own them.Key TermsEntrepreneurship means being prepared to take risks and having the wiz 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 orsh areholders protection so that they can lose only the money that theyhave already put in.Innovation is the introduction of the new ideas. It may discover increases or the way in which they are made.Developing Relationships is Architecture with customers, employees &businesses. Businesses, which heart carefully at the way it works withcustomers, employees, and other businesses are to a greater extent likely to besuccessful. Reputation A reputation of a fraternity can be achieved throughdeveloping a particular orbit Low Prices Appealing to the affluent Ensuring top qualityCompetitive utility 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 amount of money that is habituated in exchange for a product.Goods are anything you buy which are inborn or manufactu red for a products.Services involve buying the skills o another person. benefit 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 union costs. It is a reward for the risk and areturn on great invested.There are 3 factors of production Land Capital restrictionEntrepreneurs use these 3 factors to make a profit.Sole TradersCompany well-grounded-----No legal formalities.A legal structure with a signalise identity from those who run it.