Learn: The Purpose and Nature of Businesses

Welcome!Today we'll explore the purpose and nature of businesses. This will help you understand why businesses exist and what they aim to achieve. Let's get started!

What is a Business?A business is an organisation that produces goods or provides services to meet the needs and wants of customers. Goods are physical items like clothes, while services are activities like haircuts.

Why Do Businesses Exist?Businesses exist to fulfil opportunities, meet customer needs, and generate profits. They help solve problems or improve people's lives through the goods and services they offer.

Types of BusinessesThere are different types of businesses, such as sole traders (run by one person), partnerships (owned by two or more people), limited companies (Ltd and Plc), and not-for-profit organisations. Each type has different structures and purposes.

Business Aims and ObjectivesBusinesses set aims (long-term goals) and objectives (short-term targets) to guide their activities. Common aims include making a profit, surviving, growing, increasing market share, and satisfying customers.

StakeholdersStakeholders are groups or individuals interested in a business, such as owners, employees, customers, suppliers, and the community. Different stakeholders have different aims, which can sometimes lead to conflicts.

Location FactorsBusinesses choose locations based on factors like access to markets, availability of labour, proximity to raw materials, level of competition, and cost. These factors influence how successful a business can be.

Business PlansA business plan sets out how a business will achieve its aims and objectives. It includes sections like market research, financial forecasts, and operational plans. While helpful for securing funding, it can be time-consuming to create.

Review Time!Great work! You've learned about the purpose and nature of businesses. Now let's test your understanding with a few questions.