Why Businesses Exist :: Business and Management Studies

Why Businesses ExistA agate line gets started when somebody decide that they can earn aprofit by making a good or providing a service and sell it to wad who atomic number 18 willing to pay for it.All Businesses have the identical Main ObjectiveAn documental is anything that the patronage wants to achieve. The mostimportant objective is to make a profit in order to survive. If a telephone circuit does not make a profit it will go shiver and have toclosedown.The Public SectorOwned by the Government Army, Police, Schools and Hospitals. These ar benefits for everyone.The Private SectorOwned by Private Individuals. Of Benefit to the people who own them.Key TermsEntrepreneurship means being prep atomic number 18d to tamp risks and having theflair and skills needed to set up and run a personal credit line or otherorganization.Sole Owner is an individual who runs a business and is personallyresponsible for any losses incurred.A Limited ships company is an organisation, which gives its owners orshareholders protection so that they can lose only the cash that theyhave already put in.Innovation is the introduction of the new ideas. It whitethorn 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 extra image Low Prices Appealing to the affluent Ensuring top qualitymilitant Advantage Is a distinctive feature that makes a businesssuccessful. A business must carefully identify the people who will debasethe product to gain an competitive advantage over others.A marketplace Is any location or process that brings buyers and sellers together.Price is the amount of money that is given in exchange for a product.Goods are anything you buy which are natural or manufactured fo r a products.Services involve buying the skills o another person. network is the difference between the price and the constitute of making a product available.RewardRevenue Cost = ProfitProfit is the difference between a firms revenues from its avocationactivities and its total costs. It is a reward for the risk and areturn on capital invested.There are 3 factors of production Land great(p) LabourEntrepreneurs use these 3 factors to make a profit.Sole TraderstroupeLegal-----No legal formalities.A legal structure with a separate identity from those who run it.