Understanding Business Chapter 1

Definitions 1. 2. 3. 4. 5. 6. 7. 8. 9.
Business: Any activity that seeks to provide goods and services to others while operating at a profit. Profit: The amount of money a business earns above and beyond what it spends for salaries and other expenses. Entrepreneur: A person who risks time and money to start and manage a business. Revenue: The total amount of money a business takes in during a given period by selling goods and services. Loss: When a business's expenses are more than its revenues. Risk: The chance an entrepreneur takes of losing time and money on a business that may not prove profitable. Standard of Living: The amount of goods and services people can buy with the money they have. Quality of Life: The general well-being of a society... that leads to satisfaction and joy.

Stakeholder: All the people who stand to gain or lose by the policies and activities of a business. 10. Outsourcing: Assigning various functions to outside organizations.

11. Nonprofit Organization: An organization whose goals do not include making a personal
profit. 12. Factors of Production: Resources used to create wealth: land, labor, capital, entrepreneurship, and knowledge (most important). 13. Business environment: Economic/legal environ, technological environ, competitive environ, social environ, and global business environ. 14. Technology: Everything that makes business processes more efficient and productive.

15. Productivity: Amount of output you generate given the amount of input. 16. E-Commerce: Buying and selling of goods and services over the Internet. 17. Database: An electronic storage file where information is kept (about consumers). 18. Identity Theft: Obtainment of private information and using it for illegal purposes. 19. Empowerment: Giving frontline workers the authority to respond quickly to customer
requests. 20. Demography: Statistical study of human population.

21. Goods/Services: Tangible/Intangible products.