| Internal trade | domestic or home trade concerned with buying and selling of goods and services within the boundary of the country |
| types of internal trade | 1)whole trade
2)retail trade |
| whole trade | purchased goods sold in bulk |
| retail trade | purchased goods sold in smaller quantity for final consumption |
| external trade | exchange of goods and services between persons operating in 2or more countries. |
| types of external trade | 1)import trade
2)export trade
3)entrepot trade |
| import trade | goods purchased from another country |
| export trade | sold to other countries |
| entrepot trade | when goods are imported for export to other countries |
| Auxiliaries to trade | 1)transport communication
2)banking and finance |
| Auxiliaries to trade | -insurance
-ware housing |
| Auxiliaries to trade | -advertising
-education |
| Purpose of business | -acquire resources
-Prouductivity |
| Purpose of bussiness | -Market standing
-co-ordinating and motivating workers |
| Purpose of business | -Profit earning
-responsible to society |
| Transformation process | an activity that takes input transforms them and produces outputs for customers |
| Transformation process includes | 1)input
2)output
3)transformation process |
| input includes | -land
-labor
-intellctual capital
-capital |
| land | location of the bussiness |
| labor | the amount of physical and mental efforts put in the creation of goods and services |
| capital | money invested in the business |
| intellectual capital | intelligence of the workforce |
| Transformation process | -Changing the characteristics of materials, information and customers.
-Changing the location of materials, information and customers.
-changing ownership of material |
| Changing the characteristics of materials, information and customers. | material: converting raw materials into finished products
information:accountants take receipts and vouchers and making sets of accounts
customers: beauty salon and cosmetic surgeons changing peoples appearance |
| changing the location of materials and information | ships and air transports peoples goods from 1 place to another
google helps to change location and information |
| change ownership of materials | whole sellers buy in bulk from number of producers selling it to retailers |
| output | form of goods and services or combination of both |
| good | all the tangible items made to be sold and can be produced in advance and store them |
| service | all the action and facilites given to consumers |
| creating value | value is created when outputs produced are worth more than inputs |
| adding value | increasing its created value |
| how can a manufacturing business add value? | 1) ensuring best price for raw materials
2)increasing benefit of the product in the eye of the customer
2) reducing mistake and wages |
| factors effecting business enviroment | -internal factor
-external factor |
| internal factors | -Production: production process, equipment used
-Personnel: staff pattern,customers |
| internal factors | -Finance: source
-marketing: promotion, pricing |
| External factors effecting business | -Political and legal factors: political parties can influence the business and new laws by the government.
-Economic factor: the amount of income in an economy can change the demand of a prooduct. |
| External factors affecting business | -social factors: attitiude and culture of people (education influences the business)
-Technological factors: the advancement of technology will affect the business |
| How business make up an important part of the economy? | -Provide goods and services
-Provides job oppurtunites
-Improves standard
-genertaes more income to the nationeconomy if doing well |
| why do business fail | -Lack of experience
-Poor dealing with customers
-Poor finance managment |
| Entrepreneur | is someone who is willing to take a risk to start a new project or a new business. |
| Enterpice | skill needed to make a new idea or work |
| serial entrepreneur | A Person who has an idea for new business and sets up many business |
| social entrepreneur | those entrepreneuer who do not have profit as there main objective |
| Qualities of entrepreneur | - very hard working
-willing to take risk
-very quick thinking |
| why become an entrepreneur | -will be your own boss
-will control the business |
| why become an entrepreneur | - can keep the profit
- experience good feelings |
| why government likes entrepreneur | - creating jobs for unemployed people
-increasing earnings of country
-pay taxes to the government |
| how can the government help entrepreneur | -giving legal protection to new ideas
- giving advice and useful information |
| entrepreneurial culture | -entrepreneurs that are highly valued and respected in that country
-environment encourages and helps them set new business |
| opportunity cost | when you decide one course of action you are sacrificing something else or another course of action. |
| resource scarcity | limited number or resources |
| choice | substitutes (choose best choice) |
| tripple bottom line ( business performance should be measured in 3 positions) | -Profit: reward of business
-planet: impact on planet
-People: treatment of people |
| business | an economic activity involving purchase, production and sale of goods and services undertaken with a motive of earning profit by satisfying human needs in society. |
| nature of business | 1.Business is an economic activity.
2. It includes production or procurement of goods and services.
3. It includes sale or exchange of goods and services with value. |
| nature of business | Dealings in goods and services on a regular basis.
Profit earning.
Uncertainty of return.
Element of risk. |
| Economic activities may be divided into three major categories | -Business
-Profession
-Employment |
| profession | it includes those activities which require special knowledge and skill in their occupation |
| examples of profession | -doctors
-lawyers |
| employment | it refers to the occupation in which people work for others and get remunerated in return. |
| business classification | -industry
-commerce |
| industry | economic activities connected with conversion of raw-material into finished products. |
| commerce | trade and aids to trade. |
| trade | buying and selling goods |
| aids to trade | support services of trade |
| types of industries | primary
secondary
tertiary |
| classification of trade | internal trade
external trade |
