TOPIC: NATURE OF BUSINESS

I .Roles of business
● The nature of a business
-Business definition: an organisation that attempts to satisfy the needs and wants of
the community by providing goods and/or services, which help maintain and improve
our standard of living.

-Process of creating a product or service: inputs (resources)

↓
outputs
↓
finished products

-Creating and adding value: a business will add value to the inputs transforming
them into an output. The more value added, the more expensive a good or service will
be

-Producing goods and services:

+ Goods: items that can be seen or touched (tangible) e.g: a computer
+ Services: things done for you by others (intangible) e.,g: dental work

-Key roles of a business

FUNCTION DEFINITION COMMON FACTORS EXAMPLE

Profit Amount of revenue -Production costs -Apple

gained by a business -Wages -ANZ
which exceeds operating -Insurance
cost -Rent
-Marketing
Employment Owner of a business will -Employment -Woolworths
employ other people with a -Legislation -Google
paid agreement to perform -Economic -McDonalds
various activities
Income Amount of money -Cost of -Apple
received by a person for products/services -IKEA
providing their labour or -Employees
services for a business
from a return on its
investment or sale of
 goods/service
Choice A large number of competitors -Consumer’s demands -EBay
offering similar goods and -Price -Amazon
services
Innovation The process of improving the -Technology -Apple
features of a product -Resources -Samsung
-Consumer’s trends -Tesla
Entrepreneurship The willingness -Level of risks -PayPal
and risks to develop, organise and -Competition -Snapchat
manage a business along -Skills level -Facebook
with all the risks in order
to make a profit
Wealth creation Generation of money for -Management -Amazon
Australian economy by -Investment -ANZ
production of goods and -Tax rate
services from individual
businesses
Quality of life The products/services provided -Social expectations -Unilever
by businesses which improve -Economic levels -Coles
standard of living of the society