Learn: What a Business Is and Why Businesses Exist

Welcome!Today we'll dive into the world of businesses and understand why they exist. By the end of this lesson, you'll have a clear idea of the purpose of businesses and their importance in everyday life.

What is a Business?A business is an organisation that produces goods or provides services. It exists to meet the needs and wants of people, such as food, clothing, or entertainment.

Why Do Businesses Exist?Businesses exist to solve problems, meet demands, and take advantage of opportunities. For example, a bakery exists to provide bread and cakes to people who need them.They also help drive the economy by creating jobs, generating profits, and providing innovative solutions to everyday challenges.

Entrepreneurship and Business CreationEntrepreneurship is when someone starts a business to solve problems or take risks for profit. Entrepreneurs often have traits like being creative, organised, and risk-taking.For example, someone might start a food delivery app to meet the growing demand for convenience.

Types of BusinessesThere are several types of businesses:Sole trader: One person owns and runs the business, with full control and unlimited liability.Partnership: Two or more people share ownership and responsibility, with shared profits and unlimited liability.Private limited company (Ltd): Owned by shareholders and run by directors. Liability is limited to investments.Public limited company (Plc): Shares are sold to the public, offering limited liability but less control for individual owners.

Business Aims and ObjectivesAll businesses have aims (long-term goals) and objectives (short-term targets). Common aims include making a profit, surviving in the market, increasing market share, satisfying customers, and operating ethically.

Stakeholders in a BusinessStakeholders are groups or individuals affected by a business. Key stakeholders include owners (profit), employees (job security, fair pay), customers (quality products and services), and suppliers (reliable payments).

Review Time!Well done! You've learned about the purpose of businesses, entrepreneurship, types of businesses, and stakeholders. Let's test your understanding with some final questions.