SC3 – Concepts of Business

1. SC3 – Concepts of Business Lim SeiKee @ cK

2. Concepts of business • Business = Enterprise? • Business: describes the actions of someone who shows some initiative by taking a risk by setting up, investing in and running a business.  • Initiative? • Risk?

3. A person who takes the initiative is someone who “makes things happen”.  He or she tends to be decisive.  A business opportunity is identified and the person does something about it.  Showing initiative is about taking decisions and being bold – not everyone is like that!

4. Risk-taking is slightly different.  In business there is no such thing as a “sure fire bet”. All business investments carry an element of risk – which is the chance or probability that things will go wrong.  • The trick is to take calculated risks, and to ensure that the likely returns from taking a risk are enough to make the gamble worthwhile.

5. Concept of Business • The exchange of goods/services with money for mutual benefit/profit • An organization that provides goods and/or services to earn profits • All profit-seeking activities that are organized and directed to convert factors of production into goods and services or combination between goods and services for customers in the markets to achieve the business objectives

6. Needs and wants • Need- something you have to have Want -something you would like to have

7. Needs are things that we truly can't be without, such as: • Nutritious food • A place to live • A warm winter coat • A good pair of shoes • Transportation

8. Wants are things you'd like to have, but if you don't, you'll still survive (in fact, you'll be just fine). Like: • Designer jeans • Toys • Candy • Video games • A snowboard

9. Limited and unlimited resources • Scarcity and choice? • Opportunity cost?

10. Scarcity means that people want more than is available. Scarcity limits us both as individuals and as a society. As individuals, limited income (and time and ability) keep us from doing and having all that we might like. As a society, limited resources (such as manpower, machinery, and natural resources) fix a maximum on the amount of goods and services that can be produced.

11. Scarcity requires choice. People must choose which of their desires they will satisfy and which they will leave unsatisfied. When we, either as individuals or as a society, choose more of something, scarcity forces us to take less of something else. Economics is sometimes called the study of scarcity because economic activity would not exist if scarcity did not force people to make choices.

12. What about opportunity cost? A: Cost of losing a job? B: Cost of starting a business? C: Cost of employing staff? D: Cost of something given up? Do a research and let me know next week!