Business Activity

Learning Goals
• Define ‘Business’ and ‘a business’.
• Describe the ‘Factors of Production’.
• Explain business as a process which adds value.
• Define ‘adding value’ and give examples of how
value is added
• Define ‘Profit’.
• Outline the stages and purpose of business
Activity.
 What is ‘Business’?

‘Business’ is the process of using resources

make, and / or sell, products for the purpose of
making profit.
 Resources
• Resources are what
we use to make
products.

• What is the product

being made here?

• What resources are

needed?
 The Factors of Production
(The Four Main Types of Resources)

• LAND
 The Factors of Production
(The Four Main Types of Resources)

• LABOUR
 The Factors of Production
(The Four Main Types of Resources)

• CAPITAL
 The Factors of Production
(The Four Main Types of Resources)

• ENTERPRISE
 The Factors of Production
(The Four Main Types of Resources)
• LAND – Anything that comes from the land, or
sea.
• LABOUR – Work

• CAPITAL – Any durable thing used to make

products.
• ENTERPRISE – The willingness and ability to
start and own businesses.
 Business as a Process

INPUTS OUTPUTS

Land PROCESS
Products –
Labour BUSINESS
Physical
Capital Goods

Enterprise Services
Added Value
 Classifications of Products
• Physical Goods
(tangible) –
– Durables goods
intended to last a long
time.
– Non-Durables
(Consumer goods)

• Services (intangibles)
 Added Value
• ‘Added Value’ is the 7.1 grams of
extra value added by gold is worth
the process of business. $295.96

Change it
Therefore; into a Gold
ADDED VALUE = SELLING Zodiac ring
PRICE – RAW MATERIAL for Men and
COST the selling
price is $387

Therefore ADDED VALUE = 387- 296 = $91

 Sources of Added Value
• Physical changes to the
Product
• Brand Name – Like
Nescafe.
• High Quality Service –
Free delivery, a
guarantee.
• A Unique Selling Point
(USP).
 Levels of Business Activity
• Primary – Taking things from the earth. E.g. Fishing,
Mining, Farming.
 Levels of Business Activity
• Secondary – Manufacturing, Making things.
 Classifications of Products
• Physical Goods
(tangible) –
– Durables goods
intended to last a long
time.
– Non-Durables
(Consumer goods)

• Services (intangibles)
 Levels of Business Activity
• Tertiary – Services.
Value is added at each Level!