Learn: What a Business Is and Why Businesses Exist

Welcome!Today we'll explore what businesses are and why they exist. You'll learn their purpose, how they operate, and their importance in society. Let's get started!

What is a Business?A business is an organisation that provides goods (physical items) or services (tasks or activities) to customers. Businesses exist to meet people's needs and wants, create opportunities, and generate profit.

Why Do Businesses Exist?Businesses exist for several reasons: to produce goods and services, to fulfil gaps in the market, and to meet customer demands. They also create jobs, drive innovation, and contribute to the economy by generating income and taxes.

Needs vs WantsNeeds are essential items for survival, like food and shelter. Wants, however, are non-essential items that improve quality of life, like mobile phones or holidays. Businesses cater to both needs and wants.

Types of BusinessBusinesses can take different forms: sole traders (owned by one person), partnerships (owned by two or more people), limited companies (Ltds and Plcs), and not-for-profits (charities). Each has its own structure, liability, and way of operating.

Business ObjectivesBusinesses set objectives to guide their operations. Common aims include making profit, surviving in competitive markets, growing, increasing customer satisfaction, and acting ethically.

StakeholdersStakeholders are groups or individuals interested in a business. Examples include owners, employees, customers, suppliers, and the local community. They have different aims, which can sometimes conflict.

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